Dm B4 Intelligence Fdr- Memos- Correspondence- Discussion Papers Re Intelligence Reform 327

MASSACHUSETTS INSTITUTE OF TECHNOLOGY DEPARTMENT OF CHEMISTRY ROOM 6-208 CAMBRIDGE, MASSACHUSETTS 02139

JOHN M. DEUTCH

TEL (617)253-1479 FAX (617)258-5700

E-Mail: [email protected]

INSTITUTE PROFESSOR

Senator John Warner, Chairman Committee on Armed Services

Senator Carl Levin, Committee on Armed Service

Senate Susan Collins, Chairman Committee on Governmental Affairs

Senator Joseph Lieberman Committee on Governmental Affairs

Senator Pat Roberts, Chairman Senate Select Committee on Intelligence

Senator John D. Rockefeller, IV Senate Select Committee on Intelligence

Senators:

August 14, 2004

The Senate Select Committee's Report on the U.S. Intelligence Community Prewar Intelligence Assessments on Iraq and the 9-11 Commission Report present a convincing record of Intelligence Community (1C) deficiencies and provide a compelling case that major change is required. However, successful intelligence depends above all on dedicated and capable individuals who are trained and motivated to work cooperatively. These individuals in the 1C must be enabled by a sound organizational structure with clearly aligned responsibilities and authorities. Currently, the Director of Central Intelligence (DCI) does not have the authority necessary to perform critical intelligence functions that support efforts to combat terrorism, combat the spread of weapons of mass destruction, and military operations. In considering changes to the structure of the 1C, the central question that Congress must decide is how much executive authority to give to the new National Intelligence Director (NID). My experience as DCI and Deputy Secretary of Defense leads me to suggest that the best balance is to increase the authority of the NID for planning and budgeting but to leave authority for execution of the NID approved programs with executive department and agency heads. In this regard, some of the recommendations of the 9-11 Commission go too far and others not far enough. I propose five modifications of the 9-11 Commission recommendations that I believe will better serve the security interest of the United States. 1. The NID should be directly responsible to the President and confirmed by the Senate. The individual should serve at the President's pleasure and should not have a fixed term. The NID should not be located in the Executive Office of the President because the 1C is Page 1

only one actor in the interagency process. The President should rely on the National Security Council and National Security Advisor as the single mechanism in the Executive Office of the President for managing the interagency process. 2. The NID must have responsibility for planning, programming, and budgeting an 1C community-wide, multi year program. This means giving the NID budgetary and planning responsibility for all of the National Foreign Intelligence Program (NFIP) and Joint Military Intelligence Program (JMIP) and some of the activities in the Tactical Intelligence and Related Activities (TIARA) program. The Secretary of Defense should rely on the NID for the intelligence planning and budgeting required for intelligence support to military operations. Only if the NID is given this expanded budgetary authority should the position of NID be separated from the Director of CIA. If the NID is not given budgetary authority, the position will be irrelevant. 3. The NID should have shared, not sole authority, with the head of the executive department to recommend to the president appointment of individuals to head 1C agencies. I believe it a mistake to require that positions of deputy NID for foreign intelligence, defense intelligence, and homeland intelligence be created or be 'double hatted.' These positions should be staff functions for the NID and cannot have line authority over the component agencies. Because of the requirements for battlefield intelligence, the Secretary of Defense must have day-to-day responsibility over the NSA (for example, to provide communications security) and the NGA (for example, geospatial imagery to support tactical targeting). In today's world, a future Secretary of Defense might well decide not to have an Undersecretary for Intelligence but rather an Undersecretary for Command, Control, Communications and Intelligence that is more oriented to support of military operations. The National Reconnaissance Office (NRO) should be managed by the Secretary of Defense as part of the DOD space acquisition system, executing a program plan put together by the NDI. 4. The proposed National Counterterrorism Center (NCTC) with joint intelligence and operations makes sense. But the extension of the 'center' concept to other activities cannot be made with confidence. The analogy of joint command in the Department of Defense is imperfect, because all defense activities are under the executive authority of the Secretary of Defense. The proliferation of centers performing collection and analysis begs the question about the functions performed under such an arrangement in the component 1C agencies, especially NSA and DIA. 5. The 9-11 Commission report does not adequately define the relationship of the NID to the FBI. I believe the NID should have planning and budgeting authority over all intelligence activities of the FBI. This is the only way to have an integrated intelligence collection and analysis effort against the terrorist threat. Dissemination of information with national security implications should under the direction of the NID. I regret that the 9-11 Commission did not give favorable consideration to separating domestic intelligence from the FBI and placing domestic intelligence in a new entity reporting to the NID in similar alignment to the CIA and foreign intelligence. This would have permitted the Attorney General to focus on assuring that the rights of U.S. Page 2

citizens are respected and that the 1C obeys U.S. laws. The Attorney General now is in the undesirable position of having a conflict between collecting domestic intelligence and defending civil rights. There are many complex issues involved in implementing the recommendations of the 9-11 Commission. Moreover, organizing the government to meet the terrorist threat is only one of the serious security challenges we face. There are also the problems posed by North Korea, the Taiwan Strait, Iran, and combating the spread of weapons of mass destruction. All require intelligence analysis to support policy and action. It is unwise to decide on a major reorganization of the national security structure in the months immediately before a presidential election, based on the recommendations of a group chartered for the particular purpose of examining the causes of the 9-11 tragedy. The 1947 National Security Act, its 1949 and 1958 amendments and the 1986 Goldwater Nichols Act were not adopted during a presidential election year and I suggest the Congress, as well as the Bush administration or a Kerry administration, deserve to give intelligence community organization further deliberate thought.

Sincerely yours,

John Deutch Cc:

Senator Ted Kennedy Senator Arlen Specter Chairman Porter Goss Congresswoman Jane Harman

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"National Intelligence Reforms" A Critique The discussion paper proposes, in my view, a structure for the intelligence community far more complicated and stovepiped than is the present system. It will be fiercely opposed by almost every element of the community and will have almost no chance of acceptance. In addition, it is difficult to understand why it will not make inter-departmental communications more complicated and stovepiped than they are today. Perhaps unconsciously, the diagram itself shows fourteen stovepipes with a mixture of operational and staff responsibilities. Now to specifics. The CIA is totally eviscerated. 1) The CIA director, who now reports to the president, would now report to the executive officer, who reports to the DNI, who reports to the president. 2) The CIA's operational functions are to be divided among seven or eight directors general who are not responsible to him, as he retains only analytical functions. 3) The CIA director loses substantial control over the personnel he does retain to the NIA Chief of Intelligence Personnel and to the NIA executive officer. 4) The CIA loses control over his own budget. The FBI is cut in half. 1) Its present law enforcement functions are, of course, outside of the diagram. 2) While the plan calls the domestic intelligence function the "FBI National Security Intelligence Service", it is in fact an MI5. Its head is appointed by the DNI (with the concurrence of the AG or the FBI, depending on which page you read) and reports to the DNI. That office also controls budget and personnel. No matter what it's called, it's not part of the FBI. The Defense Department loses effective operational control over NSA, NGA and NRO. In addition, it loses budget authority and perhaps even assignment and promotion authority over the uniformed personnel in those agencies. Even the president is restricted in his appointing authority.

This is not a system with any chance of acceptance; it is not a system that should be accepted, as it would be highly disruptive in the short term and more bureaucratically complex in the long term. Several of its supporting suggestions, however, have real merit. A single point of oversight over all IT systems and the creation of standard IT protocols would be a major achievement. An organized method of collection of openly available information is a good idea, though why it requires a separate organization I don't fully understand. And a far more transparent budget is a good idea. A Modest Proposal We do know that in the almost three years since 9/11, a number of changes and reforms in the intelligence community have been implemented, some modest, some dramatic. They focus the actual, historic system we inherit, not a blank slate. To the extent possible and appropriate, we should try to build on what we already have. We should encourage the already dramatic reforms in the FBI, insuring that intelligence career tracks are at least as inviting as those in law enforcement, and perhaps asking Congress to ensure an adequate intelligence budget. As the administration has alredy encouraged intelligence sharing by the creation of TTIC, apparently with some success, let's build on that success. Now TTSC is a co-operative, relatively low-level bureaucracy, dependent on co-operation. Perhaps it should be a statutory agency, with a director nominated by the president and confirmed by the Senate. Perhaps it can be granted authority to mandate sharing and co-operation. Perhaps it can be authorized to direct collection in certain areas it deems appropriate across all present elements of the intelligence community. Perhaps it can have certain other authorities. We need to get this right and get it accepted. Slade

COMMISSION SENSITIVE May 28, 2004

National Intelligence Reforms An Imperative for Change The attacks on the United States on September 11, 2001, exposed severe shortcomings in our intelligence capabilities. We did not have effective access in countries where we have no official presence and we were unable to penetrate hard targets like terrorist organizations operating abroad or cells established in the United States. Our investigations have confirmed grave dysfunctions in our national security intelligence establishment. They are of two kinds, structural and cultural. The structural problems are the simplest to understand and their remedies straightforward. The government agencies charged with foreign and domestic intelligence are the creatures of a different age with laws, regulations, and organization fashioned for external wars and internal threats of the last century where strict separation of foreign and domestic activities was desired. That legacy of nation-state focus, legislated walls and compartmentalized information cannot deal with transnational threats that operate seamlessly at home and abroad with speed and agility. Our most senior intelligence officials do not have authorities, access and accountability to do what is expected of them. Nor do they have the power to make the great organizational changes necessary to correct these problems. The Commission therefore recommends specific sweeping organizational changes. Focusing on the Mission 1. Organize the national intelligence agencies - CIA, NSA, NGA, NRO, and the FBI's counterterrorism/counterintelligence elements (hereinafter the National Security Intelligence Service) - into a new structure where responsibility, authority and accountability for the collection, analysis, and dissemination of intelligence are aligned under a Director of National Intelligence (DNI). •

The DNI would lead the national intelligence agencies and be the President's senior intelligence advisor. NSA, NGA, and NRO would remain within the Department of Defense for administrative and logistical purposes.

•

The Secretary of Defense would have responsibility for the Defense Intelligence Agency (DIA), the intelligence entities of the military services, the Joint Military Intelligence Program, and all tactical intelligence. DIA would continue to coordinate on national estimates on behalf of the Secretary.

•

The intelligence entities within the Departments of State, Treasury, Energy, and Homeland Security would remain within their respective departments and be responsible to their respective cabinet secretaries; they would continue to coordinate on national estimates and receive full access to intelligence collection data.

•

Establish within the Federal Bureau of Investigation a National Security Intelligence Service (NSIS) responsible for the intelligence missions of the Bureau, in particular counterterrorism and counterintelligence. The Department of Justice and the FBI would be responsible for NSIS, which would be funded through a national intelligence appropriation and its Director would be selected by the DNI with the concurrence of the Director of the FBI. COMMISSION SENSITIVE

COMMISSION SENSITIVE May 28, 2004 2. The President would appoint, and the Senate confirm, a Director of National Intelligence, separate from the head of the CIA, to lead this new structure with a small executive staff. The DNI would recommend to the President nominees to be appointed as the directors of the national agencies, with the concurrence of the relevant cabinet Secretaries, and the directors of the national mission areas. He/She shall be held accountable for integrating the national intelligence agencies into a fully integrated, global intelligence network. The DNI would also: •

Establish intelligence priorities, formulate collection and analytic strategies and establish intelligence policies; formulate a consolidated budget and execute an appropriation for national intelligence; oversee the management of the national intelligence agencies and approve national intelligence estimates.

•

Build workforce cohesion and expertise by appointing one official responsible for rationalizing the multiple personnel systems across the national intelligence agencies and to create incentives for working across agencies on national security missions, such as transnational terrorism.

•

Fix information sharing among agencies by assigning authority to one official to set security standards and establish information technology protocols; and hold that official responsible for changing the security culture from one of restricting information because of a "need to know" to one that creates incentives for the "need to share."

•

Strengthen financial controls and accountability of the national intelligence agencies - CIA, NSA, NGA, NRO and the FBI's counterterrorism/ counter-intelligence elements - by establishing one appropriation for national intelligence and appointing a Chief Financial Officer for national intelligence.

3. The DNI should organize the national intelligence agencies around missions, not collection capabilities much as the Goldwater-Nichols legislation organized the Defense Department around missions in 1986; a senior official analogous to a "combatant commander" would direct, for the DNI, the work of these mission areas (e.g., transnational terrorism, weapons of mass destruction proliferation, China, Russia, etc.). These missions would be expected to change over time as the national security interests of the nation change as determined by the President. 4. Strengthen human source intelligence overseas be establishing a new clandestine service of agents that operate entirely under non-official cover which can facilitate greater access to terrorists and terrorist organizations as well as penetrate the activities of other transnational actors more effectively than has been accomplished through traditional official cover arrangements. This new service would be responsible to the DNI; the 1,000 agent service should be fully operational within 36 months. 5. Strengthen competitive strategic analysis by ensuring: 1) the independence of departmental intelligence entities; and 2) giving full access to collection by these entities (those within the Departments of State, Treasury, Defense, Energy and Homeland Security). Establish an independent Executive Research Service to support the National Security Council with analysis of openly available information on national security topics and by facilitating the use of outside experts to advise the government. More important than organizational reform is dealing with the second category of dysfunction<-t—~N we have broadly defined as cultural; process over output; bureaucratic careerism; groupthink; a / law enforcement rather than preventive mindset; deep aversion to covert operations; andfganaC / abusive litigation. These problems cannot be solved by organizational changes howeverbold. I COMMISSION SENSITIVE

COMMISSION SENSITIVE May 28, 2004 They can be changed only by appointing, confirming and supporting proven leaders of talent and experience to the top positions of the intelligence establishment. It is they who must sweep away the irrational security, classification and career path obstacles to create a new, agile innovative^_ career environment in which excellence not mediocrity will flourish. -^"""^ Immediate Action Required To implement its recommendations, the Commission urges the President to immediately establish, through Executive Order, an eighteen-month Intelligence Transition Task Force to develop legislation and implement the reforms. The Task Force should include staff selected from the law enforcement and intelligence communities. The Task Force should report to the President through an advisory board consisting of the White House Chief of Staff, the National Security Advisor, and the Chairman of the President's Foreign Intelligence Advisory Board. The Task Force would be responsible for the following: 1) Drafting legislation and^r an Executive Order to implement the reforms through the FY 2005 Intelligence Authorization Act; 2) Develop a detailed strategy and timeline for implementing the reforms within 12 months of passage of the legislation; and 3) Report regularly to the President to resolve any conflicts.

COMMISSION SENSITIVE

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Dan Marcus From:

Slade Gorton

Sent:

Friday, May 28, 2004 2:35 PM

To:

Kevin Scheid; John Lehman; Jamie Gorelick; Richard Ben-Veniste

Cc:

Front Office

Subject: RE: Draft Intelligence Reforms -- Please Comment With respect, I see no differences between this proposal and its predecessor. It is "sweeping", as sweeping as was the creation of the Homeland Security Department and will be accompanied by as much confusion and disruption as is evident in HSD. It has the merit of clearer lines of authority and the obstacle that it will be uniformly opposed by almost all existing agencies. It is disingenuous to say that the new NSIS remains within the FBI. The DNI controls its budget, its personnel and its mission. Its only connection with the FBI is its name and that the latter's director must concur in the appointment of its director. It will lose all cross-fertilization with the FBI's law enforcement functions and thus the invaluable FBI contacts with thousands of local law enforcement agencies. It is an MIS, whatever you may call it, reporting not to a Cabinet secretary, as in the UK, but to the DNI. This may be what we want, but if so, we should be willing to call it by its proper name. The heart of this proposal with respect to structure is found in paragraph 3. As I see it, this describes what the CIA does now. These "mission directors" will either report to the DNI or to a deputy who is for all practical purposes the CIA director. I see no separate CIA. In fact, you could simply empower the CIA director with all of the authority you give to the DNI; operations would be supervised by the "mission directors" in paragraph 3. The authority and range of control you give to the DNI in paragraph 2, priorities, planning, oversight, personnel, technology and information sharing will not be accomplished with "a small executive staff." It will require a large and compartmentalized staff. I question that one personnel system is needed or even desirable for such disparate kinds of operatives as those who now work for the NSA, the NGA, the NRO and the CIA. And even these recommendations don't integrate the intelligence work of State, Treasury, Defense (what's left of it), Energy and Homeland Security. You'll still require a TTIC for that. I continue to believe that we can get almost al, if not all, of the benefits you seek, without the opposition and disruption, by making TTIC a statutory agency with a director appointed by the president and given the statutory authority to require the production of all intelligence from all agencies and the duty to distribute it appropriately. The director should also have the right to direct the collection of intelligence and the duty to report to the president any failure to comply. If we feel the necessity for a more centralized budget process, let the final form of the intelligence budget go through, and be submitted by, the NSC. I fully agree that culture is even more important than structure. Paragraph 4 is a vital recommendation, but where we will find these agents is left unstated. And one presumes that all presidents now seek leaders of proven talent. The more profound question is how you find, promote and reward permanent staff with skills and imagination and keep them from becoming risk-averse over long careers. And finally, no, no, no to a presidential task force. 18 months after we disband, its recommendations will be just one more message to the Congress to be chewed over by partisans. We are a unique commission. We should make our recommendations- whatever they are- directly to the President and the Congress with a sense of urgency and a request for immediate action. Slade

From: Kevin Scheid [mailto:[email protected]] Sent: Friday, May 28, 2004 10:04 AM To: John Lehman; Jamie Gorelick; Gorton, Slade (SEA); Richard Ben-Veniste Cc: Poysky, JoAnn (SEA); Jutta Freyer Price Subject: Draft Intelligence Reforms - Please Comment

Commissioners:

5/28/2004

Page 2 of2

Attached is a revised set of proposed intelligence reforms that attempts to address concerns that several of you had expressed with the previous proposal. It was developed from the briefing you received several months ago on the implications of the 9-11 attacks for US intelligence. It also takes into account many of the reforms currently underway at the FBI and the CIA. At its core, this package of reforms tries to do the following: Put.gne_eereonjn charge Of pU||jng our national intelligence capabilities together as an agile global network of human and technical collectors and all-source analysts. This reverses the trend of the past decade of these capabilities being pulled apart making it more difficult to share information, plan strategies and work transnational threats across foreign and domestic lines. The DCI no longer has the influence his predecessors had over the large collection agencies (NSA, NGA, NRO) and is left to advise the President largely with only human sources. Intelligence is most effective when HUMINT, SIGINT, IMINT, Open Sources and all-source analysts work together as one enterprise. Preserve the intelligence capabilities of the Department of Defense to execute war plans, maintain surveillance operations, and have access to intelligence data in support of the combatant commanders. It also seeks to address Secretary Rumsfeld's primary concern with the DNl concept, what he characterized as a resulting lack of competitive analysis if you put all the intelligence agencies under one person. These reforms would preserve and strengthen competitive analysis. Build on the efforts of the DCI to strengthen the clandestine service, but to do so with more expediency and with capabilities that can have greater success against non-state targets like terrorists - undeclared, non-official cover officers. And Build on the work of the Director of the FBI to establish an effective intelligence capability with in the Bureau that has clout, expertise, a career service and links to the foreign intelligence agencies.

Please provide me with your comments and I will try adjusting the draft accordingly by next Wednesday. Once the four of you are in agreement on the draft I will circulate it among the other commission members for review and comment. Please advise.

Kevin Scheid

5/28/2004

National Intelligence Reforms Background: The attacks on the United States on September 11, 2001 exposed severe shortcomings in our intelligence capabilities. We did not have effective access in countries where we have no official presence; we were unable to penetrate hard targets like terrorist organizations operating abroad or cells established in the United States. Our investigations have confirmed grave dysfunctions in our national security intelligence establishment. They are of two kinds, structural and cultural. The structural problems are the simplest to understand and their remedies straightforward. The government agencies charged with foreign and domestic intelligence are the creatures of a different age with laws, regulations and organization fashioned for external wars and internal threats of the last century where strict separation of foreign and domestic activities was desired. That legacy of nation-state focus, legislated walls and compartmentalized information cannot deal with the kinds of transnational threats operating seamlessly at home and abroad with speed and agility. Our most senior intelligence officials do not have authorities, access and accountability to do what is expected of them. Nor do they have the power to make the great organizational changes necessary to correct these problems. The Commission therefore recommends specific sweeping organizational changes. More important than organizational reform is dealing with the second category of dysfunction we have broadly defined as cultural; process over output; bureaucratic careerism; groupthink; a law enforcement rather than preventive mindset; deep aversion to covert operations; fear of abusive litigation. These problems cannot be solved by organizational changes however bold. They can be changed only by appointing, confirming and supporting proven leaders of talent and experience to the top positions of the intelligence establishment. It is they who must sweep away the irrational security, classification and career path obstacles to create a new, agile innovative career environment in which excellence not mediocrity will flourish. To accomplish such change these leaders must have new community wide authorities over personnel policies, certain budgets and appropriations, and security classifications and clearances. Some of these changes can be done by executive order, many will require legislation, and to succeed all will require major changes in Congressional oversight. We are making specific recommendations for congressional oversight reform. To implement its recommendations, the Commission believes the President should establish, through Executive Order, a six-month Intelligence Transition Task Force to: 1) help develop legislation to implement the reforms; 2) develop a strategy for implementing the reforms; and 3) report to the board on the status of the implementation. This Task Force would report to a board consisting of the White House Chief of Staff, the

National Security Advisor and the Chairman of the President's Foreign Intelligence Advisory Board. The Task Force should include selected commissioners from the 9/11 and Iraq commissions and a staff selected from the law enforcement and intelligence communities. The Commission recommends the following: 1) Establish a National Intelligence Authority (NLA), which would be headed by a Director of National Intelligence (DNI). Confirmed by the Senate, with Cabinet rank (Executive Level One), without a cabinet department. The United States Intelligence Community as it is currently organized would be disbanded. a) The National Intelligence Authority would include the existing and planned capabilities of: the CIA; the FBI National Security Intelligence Service, the national imagery capabilities of the NGA; the national signals intelligence capabilities of the NSA; the national imagery, signals, and communications acquisition programs and infrastructures of the NRO; the advanced science and technology capabilities of the CIA, NSA, and NRO; other specialized national collection activities; and the all-source analytic capabilities of the CIA and the FBI. b) The mission of the DNI is to oversee and direct the global network of human and technical systems and organizations to collect, analyze and disseminate national intelligence to the President and the members of the National Security Council, whether the information originates within the United States or abroad. He/she is to have the powers and authorities necessary to bring about such changes as may be required to accomplish that mission. c) The DNI would have the authority to nominate to the President the Director of CIA, the Directors of NSA, NGA and NRO with concurrence of the SECDEF, and Director of FBI's National Security Intelligence Service (NSIS) with concurrence of the Attorney General. d) An executive office for executing his/her responsibilities would support the DNI with such functions as: personnel management, security policy, information technology policy, budget and financial control, an inspector general, institutionalized lessons learned reviews, and support to customers, particularly the Department of Defense and the Department of Homeland Security. e) Establish the position of Chief of National Intelligence which would be the senior career intelligence professional (Executive Level Two) who would support the DNI in his role as the President's senior intelligence executive and who would be responsible for conveying intelligence to the President, the NSC and the DSC. i) The National Intelligence Authority would be organized by national security missions established by the President. Each mission area (e.g., global terrorism, WMD proliferation, counterintelligence, China, Russia, emerging threats, etc.) would be led by a Director General of National Intelligence. The Director Generals would report to the Chief of National Intelligence. The Director Generals would be the government's highest-ranking intelligence

official (Executive Level Three) responsible for their mission area and responsible for both analysis and operations. ii) The national intelligence agencies - CIA, NSA, NGA, NRO, NSIS, and other national capabilities - would be responsible for training, equipping, and manning the national intelligence mission areas and supporting the Director Generals of National Intelligence. The heads of these agencies would report to the Director of National Intelligence (Figure One). 2) Integrate Domestic Intelligence while ensuring civil liberties by creating within FBI an independent National Security Intelligence Service (NSIS) with complete access to all investigative intelligence and without law enforcement culture. Director of NSIS to be selected by DNI, with concurrence of FBI. 3) Establish an NIA Chief of Intelligence Personnel to establish NIA-wide standards of recruitment, training, certification and promotion to provide flexible assignments and career paths across intelligence agencies and areas; to ensure the regular infusion throughout the ranks of agents, analysts, and managers of thinkers from diverse disciplines and professions with and without the government; to establish reserve programs similar to the uniformed services, and generally to foster innovation and creativity and stifle bureaucratic careerism. 4) Strengthening competitive analysis to ensure the President and senior national security officials receive accurate, timely, complete and well-vetted intelligence products; as well as the complete vetting of government views and improved analytic quality control measures. Strengthen all-source, strategic intelligence analysis capabilities within the CIA/DI on transnational topics through: required overseas tours by analysts, additional training in transnational issues, significant financial incentives for skills development, as well as financial incentives to recruit linguists, additional analysts with area or scientific expertise. a) Strengthen and keep independent, departmental intelligence elements like the Defense Intelligence Agency, the military service intelligence units and the State Department's Bureau of Intelligence and Research. Strengthen their capability through the setting of priorities, overseas tours, training in transnational issues, and language training. b) Establish an Executive Research Service (300 positions) separate from the National Intelligence Authority and the policy departments. It would direct the collection, translation, analysis and production of national security-related research solely on the basis of openly available information. It would be responsible to the National Security Council. It would contract out research and build research relationships with academia and research organizations. 5) Fixing the information sharing problems among the intelligence and law enforcement communities that have come to light from the investigation of the September 11 attacks: a) A new approach of managing and sharing "meta-data" should be established to combine information about intelligence reporting, open sources and law enforcement cases into one database. This meta-data would provide "pointers" to

the content generated by, and protected within, the intelligence collection agencies including the FBI. This meta-data file would be available to all analysts for research. [This approach is similar what was recommended by the Scowcroft Review and the Markle Foundation Task Force on Creating a Trusted Information Network for Homeland Security] b) Establish the position of NIA Chief Information Officer, independent of any intelligence agency, reporting to the DNI, for oversight of all major IT systems and the establishment of standard IT protocols across intelligence and law enforcement agencies to facilitate seamless, real time information integration. c) The NIA/CIO would execute a strategy to phase out legacy systems, acquire compatible replacement systems, make recommendations to the DNI on information security and approve all major information technology acquisitions in the NIA. 6) Establish an NIA Chief of Security responsible for developing a common set of security rules, guidelines and programs across the National Intelligence Authority to allow for improved information sharing, the breakdown of unnecessary compartmentation, the increased protection of vital sources and methods and a streamlining of the background investigation process for new hires. 7) Strengthen human source intelligence both overseas and domestically through a phased national strategy to migrate case officers out of official cover status and out of US embassies abroad; and the expansion of the FBI's NSIS as a domestic collection arm of the Bureau. This transformation of our HUMINT capabilities, both domestically and abroad, should be a national priority with a "fully operational capability" achieved within three years. CIA should accelerate its current efforts to reduce the nation's dependence on foreign liaison services, "walkins," and expand unilateral collection in all regions, whether the US has a presence there or not. 8) Strengthen DNI financial controls over the National Intelligence Authority by establishing an appropriation for national intelligence and developing the associated financial systems for managing that appropriation. a) Declassify the aggregate budget amount for national intelligence. Details of the appropriations act would be classified and reported in a consolidated classified annex to the President's Budget prepared at the direction of the DNI. b) Establish a "National Intelligence Appropriations Act" that would include funding for: 1) the Intelligence Community Management Account, 2) the Central Intelligence Agency, 3) the National Security Agency, 4) the National GeospatialIntelligence Agency, 5) the National Reconnaissance Office, 6) the FBI's National Security Intelligence Service, and 7) other national intelligence capabilities not identified above. c) The National Intelligence Appropriations Act would be made to the Director of National Intelligence, who would be held accountable for executing those funds and their oversight. To meet this responsibility, the DNI would appoint a Chief Financial Officer (CFO) for the National Intelligence Authority.

d) The CFO would allocate resources to the national intelligence agencies in accordance with OMB apportionment guidelines, the DNI's direction, and the authorization and appropriations acts.

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April 13, 2004 The Honorable Susan M. Collins United States Senate Washington, D.C. 20510 The Honorable Carl Levin United States .Senate Washington, D.C. 205 10 Dear Senator Collins and Senator Levin: Thank you for your letter regarding the division of responsibility among certain counterterroiism elements of the United States Government (USG). We have provided you and your staff with information describing the mission, responsibilities, and relationships of the Terrorist Threat Integration Center (TTIC), the Department of Homeland Security's Information Analysis and Infrastructure Protection Directorate (LAIP), and other government elements with terrorism analysis responsibilities. Based on your questions, this letter focuses on counterterrorism analysis within the Federal government Primary Responsibility for Terrorism Information Analysis TTIC has the primary responsibility in the USG for terrorism analysis (except information relating solely to purely domestic terrorism) and is responsible for the day-to-day terrorism analysis provided to the President and other senior policymakers. We presume that all terrorism information has a link to international terrorism unless determined otherwise. Where information has been determined to have no such link to international terrorism, the FBI has primary responsibility with regard to the analysis of such information. This FBI responsibility, like TTTC's, is independent of where the information was collected. IAIP has the primary responsibility for matching the assessment of the risk posed by identified threats and terrorist capabilities to our Nation's vulnerabilities. IAIP is also responsible for providing the full-range of intelligence support — briefings, analytic products, including competitive analysis, "red teaming," and tailored analysis responding to specific inquiries - to the DHS Secretary, other DMS leadership, and the rest of DHS. DHS also has significant responsibilities with regard to "purely domestic" terrorism threats, particularly in support of its critical infrastructure protection, Customs, immigration, and other statutory responsibilities. USG counterterrorism elements retain such terrorism analytic responsibility and capability as necessary to support their own counterterrorism mission, and to carry out specific functions assigned to them by statute or Presidential directive.

THU 15:47 FAX 14=14

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Terrorist Threat Integration Center (TTIC) TTIC has no operational authority. However, TTIC has the authority to task collection and analysis from Intelligence Community agencies, the FBI, and DHS through tasking mechanisms we will create. The analytic work conducted at TTIC creates products that inform each of TTIC's partner elements, as we]] as other Federal departments and agencies as appropriate. These products are produced collaboratively by all of these elements, principally through their assignees physically located at the TTIC facility, but also working closely with their headquarters elements. The DCI Counterterrorism Center (CTC) The Director of Central Intelligence Counterterrorism Center (CTC) conducts worldwide operations and collection activities to detect, disrupt, and preempt actions of al-Qa'ida and other terrorist groups. CTC continues to conduct analysis to support its mission. CTC may conduct other analysis at the direction of the DCI or at the request of the Director of TTIC. The DCI, in consultation with the other leaders of the Intelligence Community and no later than June 1,2004, will determine what additional analytic resources will be transferred to TTIC. DHS Directorate of Information Analysis and Infrastructure Protection (IAIP) Whereas TTIC's terrorism analytic mission is global in nature, lAIF's mission is singularly focused on the protection of the American homeland against terrorist attack. This is unique among all intelligence, law enforcement, and military entities whose missions both extend worldwide and to subject-matter areas and purposes well beyond counterterrorism. This focus allows IAIP to concentrate its energy on protecting against threats to homeland targets, while working closely with other USG components that have overseas-focused, or both oversees- and domestic-focused, missions, to ensure unity of purpose and effort against terrorism worldwide. IAIP brings several unique capabilities to the US Government The Directorate maps terrorist threats to the homeland against our assessed vulnerabilities in order to drive our efforts to protect against terrorist attacks. Furthermore, through its combination of intelligence analysis and infrastructure assessment, IAIP is able to independently analyze information from multiple Intelligence Community sources, as well as from its fellow DHS entities. Lastly, IAIP is able to provide key information to the American citizenry, accompanied by suggested protective measures. lAIP's singular focus on the homeland allows it to carry out ail missions assigned to it by the Homeland Security Act, including the following: •

Facilitating the creation of requirements, on behalf of the Secretary of Homeland Security and DHS leadership, to other DHS components, and to the larger intelligence, law . enforcement, and homeland security communities, in order to integrate homeland security information from all sources with vulnerability and risk assessments for critical infrastructure prepared by IAIP;

•

Providing the full-range of intelligence support -- briefings, analytic products, including competitive analysis, "red teaming," and tailored analysis responding to specific inquiries, and other support - to the DHS leadership and the rest of DHS;

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•

Working with the FBI and others to ensure that homeland security-related intelligence information is shared with others who need it, in the Federal, state, and local governments, as well as in the private sector;

•

Serving as the manager for collection, processing, integration, analysis, and dissemination for DHS' information collection and operational components (Coast Guard, Secret Service, Transportation Security Administration, Immigration and Customs Enforcement, Customs and Border Protection), turning the voluminous potentially threat-related information collected every day at our borders, ports, and airports, into usable and. in many cases, actionable intelligence; and

•

Supporting the DHS Secretary's responsibility to administer the Homeland Security Advisory.System, including independently analyzing information supporting decisions to raise or lower the national warning level.

FBI

The FBI's Countarterrorism Division (CTD) has three core responsibilities: I) managing counterterrorism operations on the territory of the United States to detect, disrupt, and preempt terrorist activities; 2) conducting analysis to support its own operations; and 3) producing and disseminating to all Federal counterterrorism elements and, as appropriate, State and local law enforcement officials, intelligence reports resulting from these operations. FBI analysis within CTD exploit all available intelligence and information to drive FBI terrorism operations (hat will lead to the identification and disruption of terrorist activities. FBI also has the responsibility for analyzing law enforcement and investigative information that has been determined to have no connection to international terrorismIt is important to identify the role of me new FBI's Office of Intelligence as it relates to the division of responsibility among certain USG counterterrorism elements. The FBI Office of Intelligence, which provides CTD's imbedded analytic capability, also performs the analytic work necessary to inform the FBI's collection tasking. This analytic product is designed purely to guide the work of the FBI in responding to collection requirements. In addition, the Office of Intelligence provides the full range of intelligence support to FBI components. Finally, working with IAIP, TTIC, and other USG counterterrorism elements, CTD and the FBI Office of Intelligence ensure that all terrorism information collected by FBI, both abroad and within the United States, is shared with, and integrated into the work of, other USG counterterrorism elements in accordance with law, Presidential policy and direction, and written agreements such as those referenced herein. Conclusion Regardless of the particular analytic roles of any USG counterterrorism element under our control, we have committed all such elements, consistent with the President's policies, to share terrorism information (as defined by the Memorandum of Understanding on Information Sharing, dated March 4,2003) with one another to ensure a seamless integration of such

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information. Nothing in this explanatory letter is intended to modify the definitions or obligations of this MOU or other relevant directives or agreements. • The President and Congress have not directed, and. as a matter of effective government and • common sense, should not direct, that all USQ functions related to terrorism, including defense, intelligence, domestic law enforcement, diplomatic, economic, and a host of others be carried out by a single department or agency. In order both to ensure that no vital piece of intelligence is missed and to ensure that all departments and agencies, as well as our national leadership, receive the best possible analytic support, it is necessary to treat the analysis of terrorism-related information as a shared responsibility. We look forward to continuing to work with your Committee as we strive to enhance our ability to protect our Nation from terrorists seeking to harm us. If you have any questions about this matter, then please have your staff contact Phil Lago with the Director of Central Intelligence at 703-482-6590, or Eleni Kalisch with the Director of the Federal Bureau of Investigation at 202324-5051, or Ken Hill with the Secretary of Homeland Security at 202-282-8222, or Cymhia Bower with the Director of the Terrorist Threat Integration Center at 703-482-3354. Sincerely,

Thomas f. Ridge Secretary, Department of Homeland Security

•rgeJ. Tenet

Director of Central Intelligence

Robert S. Ml Director. Federal Bureau of Investigation

S

y/JohnO. Br

( ^/

Director, Terrorist Threat Integration Center

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