October 8, 2002 Committee Hearing: Eleanor Hill, Louis Freeh, Warren Rudman, and others

Joint House And Senate Select Intelligence Committee
October 8, 2002

SPEAKER:
U.S. SENATOR BOB GRAHAM (D-FL), CHAIRMAN

LOCATION: WASHINGTON, D.C.

WITNESSES:

ELEANOR HILL, STAFF DIRECTOR, JOINT INQUIRY STAFF
LOUIS FREEH, FORMER DIRECTOR, FBI (1993-2001)
WARREN RUDMAN, FORMER SENATOR (R-NH, 1980-1992)
PAUL PILLAR, NATIONAL INTELLIGENCE OFFICER, NEAR EAST AND SOUTH ASIA
MARY JO WHITE, FORMER U.S. ATTORNEY, SOUTHERN, DISTRICT OF NEW YORK (1993-2002)
KIE FALLIS, COUNTERTERRORISM ANALYST FORMALLY, ASSIGNED TO THE DEFENSE INTELLIGENCE AGENCY

BODY:

HOUSE AND SENATE INTELLIGENCE COMMITTEES HOLD JOINT HEARING
ON INVESTIGATION OF SEPTEMBER 11 INTELLIGENCE FAILURES

OCTOBER 8, 2002

SPEAKERS:

U.S. SENATOR BOB GRAHAM (D-FL), CHAIRMAN
U.S. SENATOR CARL LEVIN (D-MI)
U.S. SENATOR JOHN D. ROCKEFELLER IV (D-WV)
U.S. SENATOR DIANE FEINSTEIN (D-CA)
U.S. SENATOR RON WYDEN (D-OR)
U.S. SENATOR RICHARD DURBIN (D-IL)
U.S. SENATOR EVAN BAYH (D-IN)
U.S. SENATOR JOHN EDWARDS (D-NC)
U.S. SENATOR BARBARA MIKULSKI (D-MD)

U.S. SENATOR RICHARD C. SHELBY (R-AL), RANKING MEMBER
U.S. SENATOR JON KYL (R-AZ)
U.S. SENATOR JAMES M. INHOFE (R-OK)
U.S. SENATOR ORRIN G. HATCH (R-UT)
U.S. SENATOR PAT ROBERTS (R-KS)
U.S. SENATOR MIKE DEWINE (R-OH)
U.S. SENATOR FRED THOMPSON (R-TN)
U.S. SENATOR RICHARD LUGAR (R-IN)

U.S. REPRESENTATIVE PORTER J. GOSS (R-FL), CHAIRMAN
U.S. REPRESENTATIVE DOUG BEREUTER (R-NE)
U.S. REPRESENTATIVE MICHAEL N. CASTLE (R-DE)
U.S. REPRESENTATIVE SHERWOOD L. BOEHLERT (R-NY)
U.S. REPRESENTATIVE JIM GIBBONS (R-NV)
U.S. REPRESENTATIVE RAY LAHOOD (R-IL)
U.S. REPRESENTATIVE RANDY "DUKE" CUNNINGHAM (R-CA)
U.S. REPRESENTATIVE PETER HOEKSTRA (R-MI)
U.S. REPRESENTATIVE RICHARD BURR (R-NC)
U.S. REPRESENTATIVE SAXBY CHAMBLISS (R-GA)
U.S. REPRESENTATIVE TERRY EVERETT (R-AL)

U.S. REPRESENTATIVE NANCY PELOSI (D-CA), RANKING MEMBER
U.S. REPRESENTATIVE SANFORD BISHOP, JR. (D-GA)
U.S. REPRESENTATIVE JANE HARMAN (D-CA)
U.S. REPRESENTATIVE GARY CONDIT (D-CA)
U.S. REPRESENTATIVE TIM ROEMER (D-IN)
U.S. REPRESENTATIVE SILVESTRE REYES (D-TX)
U.S. REPRESENTATIVE LEONARD BOSWELL (D-IA)
U.S. REPRESENTATIVE COLLIN PETERSON (D-MN)
U.S. REPRESENTATIVE BUD CRAMER (D-AL)

*

GOSS: I call to order the joint inquiry of the House Permanent Select Committee on Intelligence and the Senate Select Committee on Intelligence. Welcome to this hearing of the House Permanent Select Committee on Intelligence and the Senate Select Committee on Intelligence. This is the eighth public hearing by our committees as they conduct their joint inquiry into the intelligence community's performance regarding the September 11, 2001 attacks. The committees have held 11 closed hearings.

Our objective today is to provide a broader context for understanding the events of September 11. And to that end, today's hearing will focus on lessons that the intelligence community learned or should have learned from the terrorist attacks against the United States that preceded September 11, 2001.

Although the September 11 attacks were unprecedented in magnitude and devastation, terrorism is not a new problem for the United States. We are seeking to learn what steps were taken in response to past attacks and what problems hindered a more effective response to terrorism.

Today's hearing will be in two parts. First, we will hear from Eleanor Hill, the staff director, who will present a staff statement that reviews the intelligence community's response to past attacks. We will then hear from a panel of distinguished witnesses -- our former Senate colleague Warren Rudman, Judge Louis Freeh, Mary Jo White and Dr. Paul Pillar, whom I will introduce more fully after Ms. Hill's presentation.

I will now ask my colleagues, Chairman Graham, Ranking Member Pelosi and Vice Chairman Shelby should they have any introductory remarks today.

Chairman Graham?

GRAHAM: Thank you, Mr. Chairman. I do have an opening statement.

I would like to take a moment to discuss what I hope will be a primary focus of today's discussion -- what I believe to be one of the major challenges facing our national security infrastructure, including the intelligence community -- and that is what steps should be taken to increase domestic security against terrorist operatives who are inside our country, having been recruited, trained and placed to await instructions to strike.

I, for one, am deeply concerned that at a recent hearing of the Senate Select Committee on Intelligence, at which we have representatives from the FBI, the CIA and other agencies, there was an alarming lack of information on this subject. The committee was unable to secure satisfactory answers to questions such as the number a of foreign terrorists who are in our homeland, their training and capabilities, their support systems -- both financial and strategic, including their possible support from foreign governments -- and the command and control systems that might be in place behind them. By that, I mean their linkages to their organizations headquarters generally in the Middle East or Central Asia.

All those questions or central to our government's ability to disrupt and deter terrorist plots. And yet, the intelligence community seems to be unable to give satisfactory answers. For example, when asked how many so-called sleepers of one prominent terrorist organization are operating within United States, we were given two widely different estimates. One number from the CIA was described as an "intelligence estimate." The other, from the FBI, was said to be based on active law enforcement cases. There was a chasm between them -- in an unacceptable chasm, in my opinion.

I am especially concerned because we are entering a period during which our president's policies in the Middle East are creating heightened tensions and heightened anti-American sentiment.

Last Thursday's hearing of the Joint Inquiry Committee -- there were various suggestions for the creation of a separate agency, within the intelligence community, to conduct domestic surveillance. There were parallels drawn to the domestic intelligence structure in Great Britain and other foreign countries.

I would like to hear from today's witnesses what approach they would recommend in this critical period, both near term and long-term solutions. Should we look towards devoting additional attention and resources to this problem within our existing intelligence infrastructure? Or should we be creating a new entity for this purpose?

Our ultimate concern and our ultimate goal is to assure the greatest possible security for the American people.

Thank you, Mr. Chairman.

GOSS: Thank you, Mr. Chairman.

Ranking Member Pelosi -- welcome.

PELOSI: Thank you, Mr. Chairman.

I will not have an opening statement except to associate myself with the welcome that you and our distinguished Chairman Graham presented to the witnesses. We look forward to their testimony today.

I wish to associate myself with your and Mr. Graham's opening remarks, especially the list of concerns put forth by Senator Graham. I have concerns about -- except to the point of the separate entity, I have serious concerns about that. And while it is true that our ultimate goal is to provide the maximum security for the American people, I know and tears and ranking members share the view that we must do so while protecting our civil liberties.

So, with that, I welcome our distinguished witnesses and look forward to their comments.

Thank you, Mr. Chairman.

GOSS: Thank you, Ms. Pelosi.

Vice Chairman Shelby?

SHELBY: Mr. Chairman, I don't have an opening statement other -- and I'll be brief, but I do want to commend you and Senator Graham for having these open hearings. I believe, although we cannot talk about everything in an open hearing -- there are a lot of things we shouldn't talk about and will never discuss -- there's a lot of information that will be brought out that the American people need to know about.

And I want to commend our staff director, Mrs. Hill, for bringing a story together. And this is a story -- a story that is a big challenge to our intelligence community and to us, as Americans, as far as security is concerned.

And without these open hearings, I think a lot of Americans would not have any idea what was going on or what we were trying to do to make our intelligence community work together better to make them stronger were the security ever nation.

Thank you, Mr. Chairman.

GOSS: Thank you, Senator Shelby.

At this time, ask Ms. Hill to proceed with her prepared statement.

The floor is yours, Ms. Hill.

HILL: Thank you, Mr. Chairman.

I have a longer -- actually, I have two longer versions of this statement, for the record. One is a classified version, which I would ask be made part of the sealed record. And the other is...

GOSS: Without objection.

HILL: ... an unclassified version, but longer than the summary that I will read...

GOSS: Without objection...

HILL: ... here, this morning.

GOSS: ... in both cases.

HILL: Mr. Chairman, members of the two committees, good morning.

The purpose of today's hearing is to review past terrorist attacks -- both successful and unsuccessful -- by Al Qaida and by other groups against the United States. This review focuses not only on the attacks themselves, but also on how the intelligence community changed its posture in response and on broader themes that demand close scrutiny by the committees.

This review of past attacks and issues is not as deep or as thorough as our inquiry into the events of September 11. Instead, it represents a more general assessment of how well the community has adapted to the post-Cold War world, using counterterrorism as a vehicle.

In conjunction with our work regarding the September 11 attacks, the staff has reviewed documents related to past terrorist attacks and interviewed a broad range of individuals involved in counterterrorism throughout the last decade.

The documents include formal and informal lessons-learned studies undertaken by different components of the community and the U.S. military; briefings and reports prepared by individuals working the threat at the time; and journalistic and scholarly accounts of the attacks.

Interviews included officials at the Central Intelligence Agency, the Federal Bureau of Investigation, the National Security Agency, the Department of Defense, the National Security Council, the Department of State, outside experts and other individuals who possess first-hand knowledge of the community's performance or who can offer broader insights into the challenge of counterterrorism.

One particularly helpful report was the Senate Select Committee on Intelligence's recently completed study of the attack on the USS Cole and the community's performance regarding that attack.

This staff statement is intended to provide the two committees with lines of inquiry that we believe are worth pursuing with the panelists who will appear before you today. It has four elements. First, we review briefly several major terrorist attacks or plots against the United States at home and abroad. Second, we note several characteristics of the terrorism challenge that became increasingly apparent in the 1990s. Third, we identify a number of important steps taken by U.S. intelligence and other agencies to combat terrorism more effectively -- steps that almost certainly saved many lives. Fourth and finally, we describe in detail several problems or issues apparent from past attacks, noting how these hindered the overall U.S. response to terrorism.

Several of these issues transcend the intelligence community and involve policy issues. Others were recognized early on by the community, but were not fully resolved.

The staff has reviewed five past terrorist attacks or attempts against the United States as part of its inquiry into September 11. They are the 1993 bombing of the World Trade Center that killed six people and wounded another 1,000; the 1996 attack on the U.S. military at Khobar Towers, in Saudi Arabia that killed 19 Americans and wounded 500; the 1998 attacks on U.S. Embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania -- the attacks, which occurred less than 10 minutes apart, destroyed the facilities and killed 12 Americans and over 200 Kenyans and Tanzanians -- more than 4,000 were injured -- many permanently blinded; the planned attacks in 1999 and 2000, around the millennium celebrations; and the 2000 attack on USS Cole, which killed 17 sailors and wounded 39 more. And each of those are gone into in far greater detail in our staff statement. But for purposes of the oral summary, I will not repeat those details.

The joint inquiry staff review these five incidents suggests several important characteristics of the emerging terrorist threat. Some were obvious to all, at the time. And others only became clear in retrospect. But all require changes in U.S. counterterrorism efforts and, more broadly, within the intelligence community.

The characteristics include the emergence of a new breed of terrorists, practicing a new form of terrorism, different from the state-sponsored, limited-casualty terrorism of the 1960s, the 1970s and the 1980s -- the new terrorists were not directly sponsored by a state and sought to kill thousands or more in their attacks; the presence of International terrorists who operated in America and were willing to conduct attacks inside America. The relative immunity from international terrorism that America had, for many years, enjoyed was gone. Terrorists would conduct attacks on U.S. soil and organize and raise funds in the United States for attacks overseas.

HILL: An adversary, Al Qaida, that is unusual in its dedication, its size, its organizational structure and its mission -- throughout the 1990s, Al Qaida became more skilled and attracted more adherence, making it, in essence, a small army by the end of the decade.

The existence of a sanctuary in Afghanistan that allowed Al Qaida to organize, to train, to proselytize, to recruit, to raise funds and to grow into a worldwide menace -- and, finally, the exploitation of permissive environments, such as Yemen, where governments were not willing or able to crack down on radical extremist activity. Unlike Afghanistan, the regimes in these countries did not, necessarily, support Al Qaida, rather they lacked the will or the ability to stop its activities.

As these challenges emerged, the intelligence community and, at times, United States government, adopted several important measures that increased America's ability to fight terrorism in general and Al Qaida in particular. Many of these measures can only be described obliquely or cannot be mentioned at all, due to national security requirements a rightful concerns about revealing intelligence methods.

Several counterterrorism efforts do, however, deserve mention -- first, the early creation of a special unit to target Bin Laden.

Well before Bin Laden became a household name, or even well-known to counterterrorist specialists, the CTC created a unit dedicated to learn more about Bin Laden's activities. This unit quickly determined that Bin Laden was more than a terrorist financier. And it became the U.S. government's focal point for expertise on and operations against Bin Laden.

Later, after the 1998 Embassy attacks made the threat clearer, the FBI and the NSA increased their focus on Al Qaida and on Islamic extremism.

Second -- innovative legal strategies -- in the trial of Sheik Omar Abdel Rahman, the Department of Justice creatively resurrected the Civil War-era charge of "seditious conspiracy," enabling the U.S. government to prosecute and jail individuals planning terrorist attacks in America.

Aggressive renditions -- working with a wide array of foreign governments, the CIA helped deliver dozens of suspected terrorists to the United States or allied countries. These renditions often led to confessions and disrupted terrorist plots by shattering cells and removing key individuals.

Improved use of foreign liaison services -- as Al Qaida emerged, several CIA officials recognized that traditional U.S. intelligence techniques were of limited value in penetrating and countering the organization. They understood that foreign liaison could act as a tremendous force multiplier and tried to coordinate and streamline what had been an ad hoc process.

Strategic warning on the risk to U.S. interests overseas -- after the bombings of the U.S. embassies in Kenya and Tanzania in 1998, the CIA clearly and repeatedly provided warnings to senior U.S. policy makers -- warnings that reached a crescendo in the summer of 2001. Policymakers from both the Clinton and the Bush administrations have testified that the intelligence community repeatedly warned them that Al Qaida was both capable of and seeking to inflict mass casualties on America.

Expansion of the FBI overseas -- FBI Director Louis Freeh greatly expanded the number of legal attache offices and focused them more on countries in which terrorism was prevalent or which were important partners against terrorism. By September 11, there were 44 legal attache offices -- up from 16 in 1992. Given the increasing role the FBI and the Department of Justice were playing in counterterrorism, these offices helped ensure that domestic and overseas efforts were better coordinated.

Augmenting the Joint Terrorism Task Forces, or JTTFs -- the Joint Terrorism Task Force model was originally created to improve coordination between the FBI and the New York Police Department. The first World Trade Center attack led to the expansion of the JTTFs to other cities and led to the inclusion of CIA officers in several task forces.

Improved information sharing -- intelligence officials and policy makers took several measures to improve information sharing on terrorism among leading U.S. government agencies. The National Security Council revived the interagency process on terrorism and threat warning, resulting in regular senior policy maker meetings concerning terrorism.

The NSA and the CIA held regular videoconferences among analysts after the 1998 embassy bombings. Although many weaknesses remained, the FBI and the CIA took steps to increase collaboration, which had been extremely poor in the early 1990s, and established rotations in each other's counterterrorism units.

Despite these measures to better fight terrorism, the community response was limited by a number of factors, including interpretations of U.S. law and overall U.S. counterterrorism policy.

Among these factors were -- first, the continued terrorist sanctuary. Up until September 11, Al Qaida raised an army in Afghanistan. Despite the intelligence community's growing recognition that Afghanistan was churning out thousands of trained radicals, there was little effort to integrate all the instruments of national power -- diplomatic, intelligence, economic and military -- to address this problem. Both the Clinton and the Bush administrations took some steps to address the problem of Afghanistan.

Former National Security Adviser Berger has testified that after August 1998, quote, "The president authorized a series of overt and covert actions to get Bin Laden and his top lieutenants," close quote. None of these actions appear to have ultimately hindered terrorist training or Al Qaida's ability to operate from Afghanistan.

However, Berger also testified that there was little public or congressional support for an invasion of Afghanistan before September 11.

Deputy Secretary of State Armitage and Deputy Secretary of Defense Wolfowitz have testified that, by the time of the September 11 attacks, the Bush Administration was far along, but not finished, with a policy review that called for more aggressive policy against the Taliban and against Al Qaida in Afghanistan. They were not, however, actively using the military against terrorism before this time.

In addition, Al Qaida exploited the laxness of other countries' counterterrorism efforts, or the limits imposed by their legal systems.

As the National Commission on Terrorism -- the Bremer Commission -- reported in 1998, some countries use the rhetoric of counterterrorist cooperation, but are unwilling to shoulder their responsibilities in practice, such as restricting the travel of terrorists through their territory.

A law enforcement approach to terrorism -- in part because options such as military force were not promising or deemed feasible, the United States defaulted to countering terrorism primarily through arrests and trials.

The use of the law enforcement approach had several weaknesses, including allowing Al Qaida continued sanctuary in Afghanistan.

The reliance on law enforcement when individuals fled to a hostile country, such as Iran or the Taliban's Afghanistan, appears particularly ineffective, as the masterminds are often beyond the reach of justice.

During our interviews, one FBI agent scorned the idea of using the FBI to take the lead in countering Al Qaida, noting that all the FBI can do is arrest and prosecute. He noted that they cannot shut down training camps in hostile countries. In his view, and I quote, "It is like telling the FBI after Pearl Harbor, 'Go to Tokyo and arrest the emperor.'" In his opinion, a military solution was necessary because -- and again, I quote, "The Southern District that doesn't have any cruise missiles," close quote.

Although the investigations contributed greatly to America's understanding of Al Qaida, the emphasis on prosecutions, at times, led to the diversion of considerable resources away from intelligence gathering about future threats.

Limited FBI aggressiveness at home -- the FBI responded unevenly at home, with only some field offices devoting significant resources to Al Qaida. An overall assessment of the risk to America was not prepared, and much of the FBI's counterterrorism effort was concentrated abroad.

This situation reflected a huge gap in the U.S. government's counterterrorism structure -- a lack of focus on how an international terrorist group might target the United States, itself. No agency appears to have been responsible for regularly assessing the threat to the homeland.

In his testimony before the joint committees on September 19, Deputy Secretary of Defense Wolfowitz opined that an attack on United States had followed between cracks in the intelligence community's division of labor. He noted that, quote, "There is a problem of where responsibility is assigned."

The CIA and the NSA followed events overseas. And their employees saw their job as passing relevant threat information to be the FBI. The FBI, on the other hand, did not have the strategic analytic capability, independent of individual operations, to prepare comprehensive assessments of U.S. vulnerability and relied heavily on the CIA for much of its analysis.

Attention to terrorist activity in United States did, however, often increase after an attack when the links between the extremists in the United States and those overseas became better known. For example, former FBI Counterterrorism Chief Dale Watson said that he only knew of three Al Qaida suspects in the United States before the 1998 Africa embassy bombing. But some 200 FBI counterterrorism cases were opened after those bombings.

Lack of a coordinated intelligence community response -- the main intelligence agencies often did not collaborate. They, at times, did not work together to target terrorists and officers at one agency often, unknowingly, withheld information that was needed by another. Classification of data and legal restrictions magnified the problem.

Even the CTC -- the intelligence community's counterterrorism organization that was expressly designed to foster a community-wide response suffered from parochialism. Interviews at the NSA, the DIA and the FBI indicate that many officials there saw the CTC primarily as a CIA, rather than a community organization.

Beyond the CTC, the JTTFs did not always include CIA officers. Of the 35 JTTFs active on September 11, only six had CIA officers on them.

At NSA, officials contended that the responsibility for collecting information concerning foreign radicals in the United States was responsibility of the FBI. NSA maintained that this was true even when these individuals were communicating internationally. As a result, NSA did not use one sensitive collection technique that would have improved its chances of successful collection.

NSA adopted this strategy even though its mission included the collection and exploitation of foreign communications that have one communicant in the United States and such coverage would have been available under a FISA.

NSA does not appear to have developed a systematic plan to ensure that the FBI would routinely pursue collection in cases where NSA would not do so.

The net affect of these collaboration problems was gaps in the collection and analysis of information about individuals and groups operating both in the United States and abroad. The actions of those responsible for the attacks on September 11 demonstrate why effective integration of both domestic and foreign collection is critical in understanding fully the operations of international terrorists.

We know now that several hijackers communicated extensively abroad after arriving in the United States.

HILL: And at least two entered, left and returned to the United States. Effective tracking of their activities, which would have required coordination among the agencies, might have provided important additional information.

Difficulties in sharing law enforcement and intelligence information -- the walls that had developed to separate intelligence and law enforcement often hindered efforts program to investigate terrorist operations aggressively, as we saw in previous testimony about the CIA and FBI action regarding hijackers Kahlid al Mihdhar and Nawafal Hazmi.

In addition, misunderstanding, misperceptions and cultural differences led to other types of walls that often hindered the flow of information within the community and between the community and other parts of the U.S. government.

Finally, limited changes in intelligence priorities -- as certain threats, including terrorism, increased in the late 1990s, none of the lower level tier one national security priorities were downgraded so that resources, i.e., money and people, could be reallocated. As a result, to much of the intelligence community, everything was a priority. The U.S. wanted to know everything about everything all the time.

For example, NSA analysts acknowledged that they had far too many broad requirements -- some 1,500 formal ones -- that covered virtually every situation and every target. Within these 1,500 formal requirements, there were almost 20,000 essential elements of information that were mandated by customers. Analysts understood the gross priorities and worked the requirements that were practicable on any given day.

While counterterrorism became an increasingly important concern for senior intelligence community officials, collection and analytic efforts did not keep pace.

In closing, as this review suggests, the intelligence community made several impressive advances in fighting terrorism since the end of the Cold War. But many fundamentals steps were not taken. Individual components of the community scored impressive successes or strengthened their effort against terrorism, but important gaps remained. These included many problems outside the control or the responsibility of the intelligence community, such us the sanctuary terrorists enjoyed in Afghanistan and the legal limits on information sharing between intelligence and law enforcement officials.

However, another major contributing factor was that the community did not fully learn the lessons of past attacks. On September 11, 2001, Al Qaida was able to exploit the gaps in the U.S. counterterrorism structure to carry out its devastating attacks.

Mr. Chairman, that concludes my statement.

GOSS: Thank you very much, Ms. Hill. As usual, that's very comprehensive and I draw members' attention to even more comprehensive versions of it that are in your books. And there is a classified version, as well, which is worth reading.

HILL: Thank you, Mr. Chairman.

GOSS: Before introducing our witnesses, the committees have received statements for the record that will not be accompanied today by oral testimony. But I should note one of these statements was submitted by Dr. Bruce Hoffman of the Rand Corporation, who is an expert on terrorism, and the second was provided by Mr. Kie Fallis, a counterterrorism analyst formally assigned to the Defense Intelligence Agency.

I ask unanimous consent that Dr. Hoffman's and Mr. Fallis's statements be made part of the record of this hearing. Without objection, so ordered.

Members may submit questions for the record to follow up on matters appropriately addressed to Dr. Hoffman and Mr. Fallis.

I also ask unanimous consent that did the de-classified findings and recommendations from the Senate Select Committee on Intelligence's inquiry into intelligence collection reporting analysis and warning relevant to the bombing of the USS Cole be placed in the record. Without objection, so ordered.

I would now like to introduce the distinguished members of our panel today. First, Senator Warren Rudman served in the Senate for two terms from 1981 through 1992. Among other committee assignments, he chaired the Senate Select Committee on Ethics, was the vice chairman of the Senate Iran Contra Committee and was a member of the Senate Intelligence Committee. Since leaving the Senate, Senator Rudman has led commissions that have examined the U.S. intelligence community and emerging threats to the United States until December 2001 he served as the chairman of the president's and Foreign Intelligence Advisory Board.

Senator, welcome.

RUDMAN: Thank you.

GOSS: Judge Louis Freeh served as director of the FBI from September 1993 to June 2001. Prior to his service as FBI director, he had a distinguished career have been FBI agent, federal prosecutor, U.S. District Court Judge for the Southern District of New York.

Judge Freeh, welcome, sir.

Mary Jo White is the former U.S. attorney for the Southern District of New York. Her office prosecuted those responsible for the first attack on the World Trade Center, the plot against New York landmarks in 1993, the 1998 East Africa embassy bombings, as well as numerous other important cases of concern to this committee.

We welcome you, Ms. White. Thank you for joining us.

Dr. Paul Pillar is the National intelligence Officer for the Near East and South Asia. Dr. Pillar has served in senior positions at the Central Intelligence Agency, including as the deputy chief of the DCI's Counterterrorist Center. He is the author of "Terrorism in U.S. Foreign Policy." I would recommend that to anybody. As far as I am concerned, it is pretty close to the Bible and has served us well. Unfortunately, not enough people have read it, apparently.

Dr. Pillar, welcome.

Each of our committees has adopted a supplemental rule for this joint inquiry that all witnesses shall be sworn. I will ask the witnesses to rise at this time.

I think, Mr. Fallis and Dr. Hoffman -- I might as well ask you, if you don't mind, to rise and be sworn, as well -- and just in case there are questions.

Thank you. We're missing Dr. Hoffman, I guess.

Do you solemnly swear that the testimony that you will give before these committees will be the truth, the whole truth and nothing but the truth, so help you God?

FREEH: I do.

RUDMAN: I do.

WHITE: I do.

PILLAR: I do.

HOFFMAN: I do.

FALLIS: I do.

GOSS: Thank you very much.

The full statement of the witnesses will be placed in the record of these proceedings, as usual. And I will now call on Senator Rudman, then Judge Freeh, then Ms. White and then Dr. Pillar, in that order, the to give their opening spoken remarks.

Thank you. We welcome you all. We are truly glad you're here.

Senator Rudman, the floor is yours, sir.

RUDMAN: Mr. Chairman, I'm delighted to be here -- the committee I served on -- one of my favorite committees in my time in the Senate. And I'm honored to appear before you.

I expect that two of the things that I did in the last few years are of interest to you. And I'll try to draw from them in my testimony.

First, of course, chairing of PFIAB; second, chairing Hart- Rudman; and third, something that I want to talk about a bit this morning -- that Chairman Goss is very familiar with -- and that is the roles and other responsibilities of the intelligence community for the 21st century, which we prepared at the request of this Congress -- I think it's Public Law 971. I wish more people had read it. And I want to talk a little bit about it this morning.

I would highly recommend that every staff member read this before you write your final report, if you haven't already. And I would think that members might want to read some portions of it because it was a very distinguished group of Americans who spent a lot of time looking, in advance of 9/11, at precisely the things that you are looking at post-9/11. And I want to just give you a couple of excerpts from that.

And I will take five or six minutes. I do not have a prepared statement. But, rather, I thought I would respond to specific questions addressed to me by the leadership of the committee.

The first question that you asked was did -- our national study the security group -- Hart-Rudman -- warned in 2001 that the United States was not prepared to deal with terrorist attacks in the U.S. homeland. Please summarize why you felt that to be true at the time, what steps were taken, if any, in response to our report and why we believe the important steps were not taken and what measures remain to be taken.

Briefly, this commission was commissioned by the Congress and the previous administration. Its task was to prepare a report on U.S. national security -- 21st century -- to be limited to the incoming president in 2001. So no one knew who that would be at that time or what party that person would be on.

It was a totally bipartisan group. We spent a huge amount of time. We traveled all over the world. We met with friend and foe. We met with intelligence agencies -- those with whom we have good relations and those with whom we have poor relations. And we came to the overwhelming conclusion at the end of our study that we were facing an asymmetric threat to our entire national security structure.

And, to everyone's surprise, our lead recommendation dealt with homeland security and international terrorism. No one on that committee would have thought, at the time that we started, that that would have been our conclusion. We would have thought it might have been more in the area of DOD reorganization or intelligence reorganization or changing the State Department -- changing public diplomacy. It was not.

And you are all familiar with the report. I have discussed with many of you, personally. We said, in that report, quote, more or less, "Large numbers of Americans will die on American soil, victims of terrorism, in the coming century." It happened a bit sooner rather than later.

Why did we come to that conclusion? It was obvious from the excellent history that Eleanor Hill gave you a few minutes ago, it was an escalation of attacks against American interests. It was quite apparent that the homeland was not secure and that at a point in time, those terrorist -- be it Al Qaida or many other groups, some of which you are, I'm sure, studying -- others which you may not be -- that someone would launch an attack in this country.

We talked about weapons of mass destruction. We talked about weapons of mass disruption. And we laid it out in laborious detail because it was overwhelmingly apparent to all of us that that was going to happen.

We made a number of recommendations. In late January 2001, we presented it to the new administration, to the national security adviser -- the vice president through the national security adviser and the president -- secretary of state -- secretary of defense. It was very well received. People were very interested in it.

We brought it up here. We met with a number of you on this committee. To the credit of the Congress, a number of you immediately started moving towards a homeland security department, which has now, I understand, wound up in some controversy. But I expect eventually it will happen.

And we made a number of recommendations. The Congress reacted very quickly to them and started to act on them, particularly in the House -- Congressman Mac Thornberry -- here in the Senate, Senator Fred Thompson and Senator Joe Lieberman.

The administration's attitude was this is an excellent report. We are giving it to an internal task force of the NSC and we will start to go through it. I find no fault in that. This is a brand new administration. It had much on its plate. It was February-March time frame, of 2001. And my understanding is that they were in the process of working on the recommendations. Now, DOD, in fact, had done some of the things that we had recommended.

So I would say that, although people might criticize and say that the administration should have acted more forthrightly, my sense is for a new administration receiving a voluminous report, including an implementation plan, they probably did about all that any administration would have done, under the circumstances.

And let me also say that had every recommendation that we had put into that plan been adopted the day after we gave it to the White House, I seriously doubt that that would have been sufficient to prevent 9/11 for many reasons, including some of the reasons that your staff director has talked about here, today.

Your second question -- we said that military consumers often drove intelligence collection and that given limited resources, the community was neglecting important regions and trends. How did this affect the ability of United States to understand the growth of capabilities and locations such as Afghanistan and Yemen? Would placing more of the intelligence community under the authority of the director of Central Intelligence prevent similar problems in the future?

The answer to your question is generally yes. Up until September 11, the bulk of U.S. intelligence efforts had been focused on states. That has been the historic role of United States intelligence community.

And I might add that our intelligence community, as well as most foreign ones that I have studied, are extraordinarily good at looking at structure, at capability and intent. They don't have a very good track record, even working against states, for determining what and when. And I'm not sure that that will ever be totally solved, no matter how hard we try.

To try to come up with definition on people's intentions, whether they be states or they be shadowy terrorist organizations, is the toughest assignment given to any intelligence community. And, frankly, if you look at the record over the last 50 years, the record is not particularly good -- not here or anywhere else.

RUDMAN: Do I believe or did our commission believe that making the director of the CIA -- giving him a stronger role -- we do. But we are not the first ones to say that. This has been recommended for many years. I mean, you have a director of Central Intelligence who is also the director of the CIA -- 85 percent of that budget is controlled by DOD. From what I read in the papers lately, they would like to get even more control of it. And I leave that to you. You were elected to solve problems like that.

I don't know what the answer is. We have tried to recommend a number of reasonable solutions in this report, of which a number of members of Congress have done. Nothing has happened except I do believe there is a stronger community coordination effort since this report than there was before. But you've got a long way to go.

And, frankly, I think it's the court of the Congress as much as it is the administration.

We call for the president, through the NSC, to set strategic intelligence priorities and update them regularly. Was this done? Is it being done today?

Well, I can tell you that I am no longer chairman of the PFIAB, so I am no longer privy to those things. But my understanding is that, yes, there has been broad strategic intelligence directives -- PDDRs -- which have been adopted by this administration. I am sure they are available to this committee. And I would advocate that you check with them to get a more precise answer.

Three more questions you have asked -- how can the United States improve cooperation between intelligence agencies focused overseas -- the CIA, NSA, et cetera -- and those with domestic focus, such as the FBI? And how could they take full advantage of each other's capabilities? What gaps existed in their cooperation prior to September 11?

I believe that the joint terrorism centers, which these committees are very familiar with, have come a long way in cooperation. But we have got some very interesting issues here that have to do with law, civil rights, the rights of Americans.

I was saying to Louis Freeh before we testified this morning that you go back and read the history of the 1946-'47 National Intelligence Act at it was very clear that the FBI was responsible for domestic counterintelligence -- and I would expect counterterrorism. And the CIA was responsible overseas. And the CIA had better not come close to putting its nose anywhere near domestic issues. It was a wonderful alliance of strange bedfellows.

J. Edgar Hoover and the American Civil Liberties Union -- they both had their precise reasons for feeling that way. But the result has been that we have not had the cooperation between these agencies that we should have. I think there ought to be major changes in the law. I have felt that way for a long time.

Let me add, just in response to one of the questions posed in one of the opening statements, to create a new MI5-type organization in this country we do not believe, in our commission, would be the solution. You've got enormous domestic collection capability in the FBI, assuming it is focused in the right direction. That is a tough issue and one this committee and the Judiciary Committee will have to work with.

How effective do you believe that law enforcement tools are for fighting terrorism? Were they relied upon excessively before September 11?

The answer to that, I guess, is yes and no. Mary Jo White brought very successful prosecutions against a number of terrorist organizations in the Southern District of New York.

On the other hand, President Bush says we are now at war. Well, if we are at war, then law enforcement tools will be used, but in a more minor way. And military tools will be used more effectively to deal with the capability of terrorism.

So, I guess, the answer to that question is both in the affirmative and in the negative.

And, finally, any recommendations you may have for improving the intelligence community's performance in fighting terrorism?

I believe that the more jointness that you have between these agencies -- the more they work in joint counterterrorism centers -- the more their information databases become common -- a more there is constant daily -- hourly cooperation between them -- the more that the NSA is brought in, by statute if necessary, to subline (ph) the FBI with domestic counterterrorism information, then you'll do the improvement you need.

I do not believe we need new structures or new systems. We may need different kinds of people or we may -- different kinds of technology, but I don't think there is anything wrong with the systems. But I think there is a lot wrong with how they have been used over the last 10 years.

Finally, Mr. Chairman and members of the committee, I want to read to you from this report, which was submitted in 1996 to the Congress, at the Congress' direction. As I said, Chairman Goss served on this and a number of other people that you all know. It was a very distinguished group -- entitled "Commission on Roles and Capabilities of United States Intelligence Community."

There is a lot of great recommendations in it. There is one here that is particularly interesting and it's from the executive summary. And it is spelled out in detail, but I'm not going to do that. I'm just going to read you two paragraphs.

It is entitled "The Need for a Coordinated Response to Global Crime."

"Global criminal activity carried out by foreign groups -- terrorism, international drug trafficking, proliferation of weapons of mass destruction and international organized the crime is likely to pose increasing dangers to the American people in the years ahead, as perpetrators grow more sophisticated and take advantage of new technology.

Law enforcement agencies historically have taken the lead in responding to these threats. But where U.S. security is threatened, strategies which employ diplomatic, economic, military or intelligence measurers may be required instead of, or in collaboration with, law enforcement response.

In the commission's view, it is essential that there be overall direction and coordination of U.S. response to global crime."

I will tell you that nobody, evidently, read it.

Thank you, Mr. Chairman.

GOSS: Thank you very much, Senator Rudman, for, obviously, a very illuminating presentation to us.

We now go to Judge Freeh.

Welcome, sir. The floor is yours.

FREEH: Thank you, Mr. Chairman.

Chairman Graham, members of the committee, thank you very much for inviting me to testify here, today.

When I went back and recounted all of the appearances that I have made before the Congress -- the first one, actually, was in 1980, before Senator Rudman when I was a FBI agent. But other than that, I have appeared before these two committees more than all of the other committees to which the FBI director reports. And I think that is symbolic, one, of the attention that this committee and the bipartisan leadership, which I always have commended and commend today, has taken up the issues of national security and particularly counterterrorism.

Some of those hearings were requested by the committee, some were requested by myself. And this committee, over the years, has been outstanding in its support and its thinking ahead for the issues that we needed to deal with.

I would ask the committee's indulgence for -- what I will try to do in a summary fashion, but which I think is going to take some more time than I had planned.

First of all, I would like to begin by expressing my condolences to the victims of not just the horrific events of September 11, but all of the victims of terrorism. And in the 26 years that I have spent as a FBI Agent, Army officer, a prosecutor or judge, I have strived every day, as have my colleagues, to ensure that the people that we were required to protect were protected to the best of our ability.

And I would like to say here a few words about the men and women in law enforcement. And I know how much they are appreciated by this committee, but I know I speak this morning to a larger audience.

All of those who serve in law enforcement and public safety go to work every day committed to laying down their lives for the people that they protect. On September 11, dozens of law enforcement officers, firefighters -- other brave people willingly did so.

FBI Special Agent Lenny Hatton and retired FBI Special Agent John O'Neill unselfishly sacrificed their lives that day. John and Lenny represent the very finest of the FBI -- men and women of whom I am immensely proud of and whose courage, skill and sacrifices and dedication in combating crime and terrorism, both here in this country and on the ground in far away dangerous places, deserves the nation's praise and enduring respect. It was a great and unique privilege to serve with these extraordinary Americans. And we are sincerely thankful for Director Mueller's able leadership and for the FBI -- so dedicated to the people it serves.

I often had the occasion to work with John O'Neill. He was, as you know, the FBI's counter-terrorism chief who helped forge the historical relationship between the FBI and the CIA, about which I would like to say a few words.

John and I stood together on the deck of the USS Cole in Aden shortly after the October 2000 attack against our warship. As we stood there, we watched young FBI agents reverently remove the remains of those 17 sailors from the hull of the ship, which was about 110 degrees. We watched silently and reverently as this was done and observed what was, indeed, an act of war against the United States.

In June of 1996, John and I stood together in front of Khobar Towers in Saudi Arabia, as hundreds of FBI men and women, working in 120 degree temperatures, sifted through tons of debris, removing human remains and evidence, intent on doing that which law enforcement can do when there is an act of war committed against America.

In Dar es Salaam and Nairobi in August of 1998, again I watched hundreds of FBI men and women sifting through the shattered ruins of our embassies, recovering human remains and evidence, all of us determined to bring to justice those who had committed these acts of war against the United States.

In February 1993, I was sitting in my courtroom in Foley Square when the World Trade Center was attacked by foreign, Al Qaida-trained terrorists. I walked quickly from the courthouse. When I got to Chambers Street, I saw dozens and dozens of FBI agents streaming out of their building down the street towards the smoke-filled building.

My images and memories of these painful events are both horrific and heroic. The horror and suffering of the victims, balanced in a small but vital way, by the bravery and heroism of the rescuers.

It was amazing to me that this part of the scene was always the same. FBI men and women -- whether it was New York City, Dhahran, Aden, Nairobi, Dar es Salaam -- exhausted, many sick and dehydrated, working until they literally dropped, in some cases, down on their knees digging with their fingers, working in harms' way.

In Yemen and East Africa, to do that work, they had to be surrounded 24 hours by FAST teams of U.S. Marines to protect their lives. And all the time, working -- pursing justice under the Rule of Law.

Another thing that has been a constant was the FBI's concern and support for the survivors of these horrendous acts. Their testimony in these cases speaks eloquently about the superb professionalism and dedication of the FBI's counterterrorism men and women. They have cared for and spent hundreds of hours comforting, informing and caring for these survivors. On numerous occasions, I visited with the surviving families of the Americans killed in East Africa, on board the USS Cole -- at Khobar Towers. We never tried to be too busy elsewhere that we stop pursuing the killers of their loved ones.

One of the most moving events in my years of public service was in June of 2001, days before I left the FBI, when all 19 families of the Khobar Towers victims came to my office and thanked me and the FBI for not forgetting about them.

And, as I said, it was an honor to work with men like John O'Neill -- thousands of others -- people who you know well -- Dale Watson and Cofer Black -- dedicated Americans for whose bravery, skill and absolute integrity America will always be thankful.

I would also like to commend President Bush and the Congress for their immediate responses in kind to the acts of those who are responsible for the events of September 11. Even after my 26 years of public service, I was awestruck to see a united America exercise the will and might to carry out an all-exclusive, far-reaching and total war against terrorists who, from far away sanctuaries, have threatened and attacked America for decades.

I would like to take a few minutes this morning to provide a broad overview of the terrorism threat -- the FBI's role and history in fighting it.

I would also like to focus on both the successes and the limitations of that mission prior to September 11, important, I think, because the threats and needs for resources and authorities were the same on September 10 as they were on September 12.

I would also offer some ideas for strengthening and improving our national security without weakening the foundation upon which our country has been built -- governance under the Rule of Law.

Terrorism has been waged, against us and others, for centuries. It is inevitable and it's a sad fact that it is, that every act of terrorism cannot be prevented, even under the best of circumstances.

FREEH: If reality were otherwise, some government or regime, using unlimited resources and unrestrained power, would have come up with a 100 percent preventive formula.

Our enemies from time-to-time are equally capable of an attack against us, especially when they are anxious to die in the endeavor. No agency or country -- particularly in a democracy where the Rule of Law is respected -- can be expected to foil and prevent every planned attack. Such a standard will never be met. Nevertheless, our law enforcement, intelligence agencies, our political, economic, military and our diplomatic policies must strive to get as close to that 100 percent as humanly possible.

The intelligence community and the FBI, in my opinion, does not appear to have had sufficient information to prevent the September 11 attacks.

What has been stated recently to this committee, in closed session, I believe, and later released, was a statement by FBI Director Mueller. And I would like to repeat an excerpt of it. He testified before you as follows.

"The plans for the September 11 attacks were hatched and financed overseas over a several year period. Each of the hijackers, apparently purposely selected to avoid notice, came easily and lawfully from abroad.

While here, the hijackers effectively operated without suspicion, triggering nothing that alerted law enforcement and doing nothing that exposed them to domestic coverage. As far as we know, they contacted no known terrorist sympathizers in the United States. They committed no crimes, with the exception of minor traffic violations. They dressed and acted like Americans -- shopping and eating at places like Wal-Mart and Pizza Hut. They came into different cities, moved around a lot and did not hold jobs.

When three got speeding tickets in the days heading up to September 11, they remained calm and aroused no suspicion. One of the suicide hijackers, al-Hazmi, even reported an attempted street robbery on May 1, 2001, to Fairfax, Virginia, police -- he later declined to press charges.

None of the nineteen suicide hijackers are known to have had computers, laptops or storage media of any kind, although they are known to have used publicly accessible Internet connections at various locations.

They used 133 different pre-paid calling cards to call from various pay phones, cell phones and land lines.

The 19 suicide hijackers used U.S. checking accounts, accessed with debit cards, to conduct the majority of financial activity during the course of this conspiracy.

Meetings and communications between the hijackers were done without detection, apparent surveillance flights were taken, and nothing illegal was detected through airport security screening.

In short, the terrorists had managed very effectively to exploit loopholes and vulnerabilities in our system. To this day we have found no one in the United States, except the actual hijackers, who knew of the plot. And we have found nothing they did while in the United States that triggered a specific response about them," close quote.

We have read and heard much about the July 2001 memo by a Phoenix Special Agent, the Minnesota arrest and investigation of Moussaoui in August, and the information which the CIA obtained regarding two of the 19 hijackers, relating to a Kuala Lumpur meeting in 2000.

It is very important, in hindsight, to segregate this relevant information and put it into a dedicated timeline. However, the predictive value of these diverse facts at the time that they were being received must be evaluated. Analyzing intelligence information can be like trying to take a sip of water coming out of a fire hydrant. The several bits of information, clearly connected and predictive after the fact, need to be viewed in real time.

The reality is that these unquestionably important bits have been plucked from a sea of thousands and thousands of such bits at the time.

Additionally, as this committee well knows, the difference between strategic and tactical intelligence is critically important to keep in mind.

Although not privy to all the relevant information known to this Committee, I am aware of nothing that, to me, demonstrates that the FBI and the intelligence community had the type of information or tactical intelligence which could have prevented the horror of September 11.

In terms of the FBI's capability to identify, investigate and prevent 19 hijackers from carrying out their attacks, the facts so far on the public record do not support the conclusion that these tragic events could have been prevented by the FBI and intelligence community acting by themselves.

This is not to say things could have been done better or that more resources or authorities would not have helped. It is only to say I have not seen a reporting of facts that leads to that conclusion, with one important caveat. Because of the narrow focus of this inquiry, I leave aside any view of the larger, but very relevant, issues raised even this morning by Eleanor Hill, like foreign policy, military might, airline safety, national commitment.

Identification, investigation and arrest of dangerous terrorists and those who support them is prevention. I would like to try to dispel the notion that investigation is not part of prevention. And I think Mary Jo White will speak about that a little bit.

For instance, the FBI's criminal investigation of the 1993 World Trade Tower bombing led directly to the discovery and prosecution of a terrorist plot to blow up New York City tunnels, buildings and infrastructure, which would have killed thousands of innocent people. The FBI's investigation, at that time, led to evidence and witnesses whose cooperation directly prevented a major terrorist attack.

In my experience, the identification, pursuit and arrest of terrorists are the primary means of preventing terrorism in some cases. The FBI and CIA have jointly been doing this successfully for many years.

Our investigation and pursuit of Ramzi Yousef, after the World Trade Center bombing in 1993, led to the Philippines and helped to prevent his plot to blow up 11 United States airliners in the Western Pacific. His arrest in Pakistan by FBI Agents certainly prevented him from carrying out further acts of terrorism against America. Bringing Yousef and the East Africa embassy bombers back to the United States and convicting them in New York City without a doubt prevented them from carrying out more terrorism against America.

As these committees have known for several years, the FBI and the CIA have carried out joint operations around the world to disrupt, exploit and recover evidence on Al Qaida operatives who have targeted the United States. These operations, in part designed to obtain admissible evidence, also had the critical objectives of destroying the operational capability of terrorist organizations, collecting valuable intelligence and being able to support our military, should such a response be unleashed.

Law enforcement's ability to act against entrenched terrorists in overseas sanctuaries is very limited. And I will repeat here, in theme, another point made by your counsel this morning.

The FBI and CIA can devise and implement a very effective counterterrorism strategy, both inside the United States and overseas. However, often a greater involvement of national resources is required. For instance, General Noriega was investigated and indicted by the Department of Justice in 1988, operating out of what he thought was a safe, foreign haven. Noriega and his military-like organization were sending tons of deadly drugs into the United States, causing the deaths and devastation of countless Americans.

The FBI and DEA built a case and executed the arrest warrant on Noriega in Panama, only because our military can and did do what law enforcement and intelligence cannot do.

Osama bin Laden was indicted in 1998, actually prior to Al Qaida's bombings of our embassies in East Africa. Like Noriega, Osama bin Laden remained secure and operational in his foreign, safe haven. Once the collective will to go in and get him was summoned, it happened with striking speed.

The Pan Am 103 bombing is another such example of an FBI case where the Libyan intelligence service was the target of our investigation. I certainly don't equate Noriega and Osama bin Laden, in terms of their destructiveness and evil. However, the comparison makes an obvious, but often overlooked, point that our response to terrorism must be expansive, unmistakable and unwavering across all levels of the United States Government. I particularly want to commend George Tenet, and the courageous men and women of the CIA, for fighting bravely on the front lines of this war for many years. Under Mr. Tenet's sound leadership, dedication and vision, the CIA has achieved great successes in rolling-up major terrorist plots in Albania, Jordan, South East Asia and many other places.

Importantly, the CIA and FBI have been fully cooperating and jointly carrying out America's counter-terrorism war for many years. And I will make this point again and again this morning. The coordination between the FBI and the CIA in counterterrorism, in my eight years of experience, has been exemplary.

They formed -- the FBI and the CIA -- the first joint dedicated Al Qaida-Osama bin Laden cell to study it a year prior to the August 1998 East African embassy bombings.

But the fact is that working at their best and highest levels of efficiency and cooperation, the FBI and CIA together will still fall short of war -- a total war against terrorism.

As these committees well know, total war -- as we have recently done it -- requires bold leadership, supported by the will of Congress and the American people. Its success is ultimately dependent upon the united and unrelenting efforts of foreign policy, military assets, vast resources, legal authorities and international alliances and cooperation.

I realize that your committees' efforts have publicly focused, for the most part, on the intelligence community and the FBI. And I'm confident that the upcoming commission, should there be one, will more fully examine these broader issues with a global view. It should be obvious, for instance, that the FBI, with about 3.5 percent of the country's counterterrorism budget, and the CIA, with their share comprise but pieces of a mosaic of a total government commitment needed to fight the war on terrorism.

For instance, U.S. airlines and aviation have long been known as a major target for terrorist attacks.

I have cited in my statement a 1996 GAO report which concluded, quote, "nearly every major aspect of the system, ranging from the screening of passengers; checked and carry-on baggage; mail and cargo; as well as access to secured areas within airports and aircraft, has weaknesses that terrorists could exploit," close quote.

In the aftermath of the tragedy of TWA Flight 800 in New York City, the White House Commission on Aviation Safety and Security was formed. I, along with New York City Police Department Commissioner Ray Kelly, Bill Coleman, Franklin Raines, Jim Hall, and other distinguished Americans, served as commissioners, appointed by President Clinton. The chairman of the commission was Vice President Al Gore, who did an excellent job leading the effort and making much needed recommendations.

Known as the "Gore Commission," the panel made its final report and recommendations on February 12, 1997. For example, in Recommendation 3.19, entitled "Complement Technology with Automated Passenger Profiling," this contemplated the development of a passenger profiling system wherein law enforcement and intelligence information on known or suspected terrorists would be used in passenger profiling.

The critical issue of terrorism directed against our aviation security was well known for many years prior to September 11. As this committee knows, the FBI conveyed repeated warnings to the FAA and the airline industry regarding terrorism right up to September 11, 2001.

Efforts by the government and the airline industry to implement these and other recommendations deserve intensive and careful study, and, most likely, massive resources.

This is not to criticize the FAA, which does a difficult job very well. Rather, the point is that while the CIA and the FBI should be intensely examined regarding September 11, they should not be examined in a vacuum. The Executive and the Congress -- the various government agencies with primary responsibility for public safety and national security, foreign policy, technologies, as well as the private sector and the international community are all components in whether or not terrorism is addressed with the vigor it deserves.

You have asked me to talk about resource allocation and whether sufficient resources were allocated to and within the FBI for fighting terrorism. The short answer is that the allocations were insufficient to maintain the critical growth and priority of the FBI's counterterrorism program. The Gore Commission agreed when it recommended, quote, "we significantly increased the number of FBI agents assigned to counterterrorism investigations, to improve intelligence and to crisis response."

In 1993, the FBI had under 600 special agents and 500 support positions funded for its entire counterterrorism program -- domestic and international. By 1999, that allocation had increased to around 1,300 agents and a like amount of support positions.

While at first blush that may sound like a lot, the FBI had requested significantly more counterterrorism resources during this period. And I note, for the record, that this committee supported those recommendations, as best it could.

This was done because I had made the prevention, disruption and defeat of terrorism one of the FBI's highest priorities. We knew that many areas, like analysis and technology, needed huge influxes of new resources.

FREEH: Let me read from our May 8, 1998, Strategic Plan, quote, "The FBI has identified three general, functional areas that describe the threats which it must address to realize the goal of enhanced national and individual security. Tier one -- National and Economic Security -- foreign intelligence, terrorist and criminal activities that directly threaten the national or economic security of the United States."

Quote, "These offenses fall almost exclusively within the jurisdiction of the FBI. Issues arising in this area are of such importance to U.S. national interests that they must receive priority attention.

To succeed, we must develop and implement a proactive, nationally directed program.

Strategic Goal: Prevent, disrupt, and defeat terrorist operations before they occur.

Terrorism, is both international and domestic, poses arguably the most complex and difficult threat of any of the threats for which the FBI has a major responsibility. New perpetrators - loosely organized groups and ad hoc coalitions of foreigners motivated by perceived injustices, along with domestic groups and disgruntled American citizens have attacked United States interests at home and abroad.

The dilemma, of course, is that the new perpetrators, targets, and weapons exist in almost unlimited numbers, while the law enforcement resources arrayed against them are finite."

In my report to the American people on the FBI in 1998, entitled, quote, "Ensuring Public Safety and National Security Under the Rule of Law", I wrote, quote, "One of my major priorities has been to seek increased funding for the FBI's counterterrorism programs. The Congress has shown great foresight in strengthening this vital work.

For example, the counterterrorism budget for fiscal year 1996 was $97 million. The fiscal year 1999 budget contains $301 million for counterterrorism efforts."

Quote, "Some terrorism now comes from abroad. Some terrorism is homegrown. But whatever its origin, terrorism is deadly and the FBI has no higher priority than to combat terrorism -- to prevent it where possible. Our goal is to prevent, detect and deter."

Foreign terrorists in United States -- and a lot of this goes to the point of whether we were focused on domestic threats from terrorists -- terrorism, quote, "can be carried out by U.S. citizens or by persons from other countries. At one time, with these crimes erupting in much of the world, many Americans felt we were immune from terrorism with foreign links." All of that ended in 1993.

The type of terrorism which had previously occurred far from our shores was brought home in a shocking manner when, in February, a massive explosion occurred in the parking garage at the World Trade Center complex in New York City.

The 1998-2000 period was critical and unprecedented regarding both the changes in and the demands on the FBI's counterterrorism program and its domestic and international responsibilities. As examples, we indicted Osama bin Laden in June of 1998 and again in November 1998.

We put Bin Laden and Al Qaida on the FBI's Top Ten list, in April of 1999, making them our number one counterterrorism priority. Also in 1999, we set up a dedicated Osama bin Laden Unit at FBI Headquarters.

We stood up for overseas deployment five rapid deployment teams to respond to terrorist threats against America around the world. With help from Congress, we began to position ourselves around the globe in places that matter in the fight against terrorism. Without those FBI legats, the post-September 11 advances could never had been made with such speed and surety.

We doubled and tripled the number of joint terrorism task forces around the United States so we could multiply our forces and coordinate intelligence and counterterrorism operations with the FBI's federal, state and local law enforcement partners. Thirty-four of these JTTF's were in operation by 2001.

The FBI was also given national responsibility for coordinating the protection of the nation's critical infrastructure. As a result, we created the National Infrastructure Protection Center at FBI headquarters, which had critical responsibilities regarding terrorist threats and cyberattacks.

We were also tasked to set up the National Domestic Preparedness Office to counter terrorist threats and to enhance homeland security.

We began making preparations for the 2000 Olympics, the millennium, United Nations and NATO meetings in New York City, World Cup, IMF-World Bank events, presidential conventions and other major events which absorbed vast numbers of FBI counterterrorism resources.

At the same time, we were conducting major terrorism investigations leading up to the successful prosecution in New York City of the Al Qaida members who attacked our embassies in Africa.

We stood up the massive Strategic Information Operations Center at FBI headquarters, whose main purpose was to give us the capability to work several major and simultaneous terrorist matters at the same time.

We established the FBI's Counterterrorism Center at FBI headquarters, which was coordinated with the CIA's center by communications, information exchange, and personnel staffing.

GOSS: Judge Freeh, may I interrupt you, sir, for a moment?

FREEH: Certainly.

GOSS: Members have been notified by bells that we have a vote in the House. I understand there is a 15-minute vote, followed by two fives. The 15-minute vote has about -- probably eight -- nine minutes left on it. And we will be excusing ourselves to run over and make those votes.

But I understand that we will continue on and Chairman Graham will be taking over.

Excuse me for the interruption, sir.

FREEH: Thank you, Mr. Chairman.

GRAHAM: Thank you, Mr. Freeh -- continue, please.

FREEH: We instituted MAX CAP O5 in July 2000 to enable each of our FBI's 56 field offices and their special agents in charge to improve our counterterrorism efforts, analyze threats and develop capabilities and strategies throughout the United States. Regional SAC conferences were held during the summer of 2000 to roll out the MAX CAP O5 strategy.

We set up a national threat warning system in order to disseminate terrorism-related information to state and local authorities around the country. We organized and carried out a significant number of national, regional and local practical exercises to help the country prepare for terrorist attacks.

The attorney general and I conducted regular meetings with the national security advisor and the secretary of state dedicated to terrorism issues, cases and threats.

I met with dozens of presidents, prime ministers, kings, emirs, law enforcement, intelligence and security chiefs around the world. The primary reason for these contacts was to pursue and enhance our counterterrorism program by forging an international network of cooperation.

We proposed and briefly received from Congress the authority to hire critical scientists, linguists and computer specialists without the salary restrictions of Title 5.

The Department of Justice and the FBI prepared hundreds of FISA court applications in counterterrorism matters. I regularly met and discussed counterterrorism issues, intelligence and force protection issues with the attorney general, the national security advisor, United States Attorneys, the secretaries of defense and state, our ambassadors and the Joint Chiefs of Staff.

Perhaps, most significantly, as to the issue of our focus on the terrorist threat, in November 1999, I created a new FBI counterterrorism division. Nobody in the Executive or the Congress suggested that this step be taken. I took it because I firmly believed that it was necessary to expand and enhance the FBI's counterterrorism capability.

Dale Watson was elevated to run this new division and develop new strategies. At the same time, I proposed the creation of a new investigative services division to support the new counterterrorism division, as well as the criminal and national security divisions. My purpose in doing so was to put together all of the FBI's analytical and support assets in order to better prevent terrorism and enhance our intelligence bases with the resources that we had available.

Nine months later, this reorganization was approved and the FBI, for the first time, consolidated its counterterrorism program assets with the support of a greater analytical engine.

In February 2001, we held a National Counterterrorism Conference to roll out details of the MAX CAP 05 strategy.

The 2000, 2001 and 2002 pre-September 11 budgets fell far short of the counterterrorism resources we knew were necessary to do the best job. This is not meant as a criticism, but a reminder for the record that total war against terrorists was not the same priority before September 11 as it is today.

Here are the numbers -- for fiscal years 2000, 2001 and 2002, FBI counterterrorism budgets, I asked for a total of 1,895 special agents, analysts, linguists and others. The final, enacted allocation we received was 76 people, over those three years.

In fiscal year 2000, I requested 864 additional counterterrorism people, at a cost of $380.8 million. I received 5 people, funded for $7.4 million. Thus, at the most critical time, the available resources for counterterrorism did not address the known critical needs.

By contrast, in response to the FBI's fiscal year 2002 emergency supplemental request for additional counterterrorism-related resources, Congress enacted 823 positions and $745 million in new funding, all things which we needed prior to September 11.

A final note on FBI resources to carry out its critical mission, including waging war against terrorists. To win a war it takes soldiers. Front line troops, as you know, each require several more soldiers to support them. I don't know if your staff has advised you, but even after September 11, the FBI has less FBI agents today -- 11,516 special agents -- than it had in 1999, when the number was 11,681. By way of comparison, in 1992, before I became director, the FBI had 10,479. That's only 1,037 less than today -- an average, annual growth of about 103 special agents per year over the last decade.

We also must keep in mind that these 11,516 special agents have responsibility for other immensely important and resource-consuming programs, including new jobs regularly imposed by Congress without any additional resources.

With less FBI agents than the Chicago Police Department has sworn officers, the immensely important responsibilities of the FBI are not proportionally represented in its most basic resource -- soldiers. Again, this is not by way of criticism. I do not think that at the time the national priority existed for the resources that are needed for this critical need. And I hope that they do now.

I would urge you to significantly increase the personnel of the FBI and to favorably consider pending legislation that would more fairly compensate them for the life-saving work they do every day.

Further, it is critical that we fully support, and demonstrate that support, for our FBI agents and CIA officers. One example how we could do this better can be found in a recommendation by the National Commission on Terrorism. It noted, quote, "The risk of personal liability arising from actions taken in an official capacity discourages law enforcement and intelligence personnel from taking bold actions to combat terrorism.

FBI special agents and CIA officers are buying personal liability insurance, which provides for private representation in some suits. By recent statute, federal agencies must reimburse up to one half of the cost of personal liability insurance for law enforcement officers and managers or supervisors."

We need to support the brave men and women whom we ask to take great risks for us every day.

The FBI was focused both on preventing domestic and foreign terrorist attacks. And I take exception to the finding that we were not sufficiently paying attention to terrorism at home.

As I stated earlier, and as reflected in the Strategic Report and the Five-Year Report, the 1993 bombing of the World Trade Center by foreign terrorists clearly demonstrated the effort to target America and Americans. Osama bin Laden's 1998 fatwah, calling for the deaths of Americans anywhere, left no doubt that terrorist attacks within the United States were as likely as those in Saudi Arabia, East Africa, Yemen and elsewhere.

More convincingly, the failed efforts by Ressam, and his New York City-based co-conspirators, to carry out a major terrorist attack within the United States at the end of 1999 made the FBI focus intently on protecting homeland security. Indeed, the FBI investigation of the USS Cole attack and CIA efforts overseas led to our conclusion that the millennium attacks by Ressam on the West Coast were planned to coincide with other Al Qaida sponsored attacks in Jordan and in Yemen.

The Jordanian attack was prevented by the CIA, acting together with the Jordanian Intelligence Service. The Al Qaida suicide bombers of the USS Cole had previously planned to attack another United States warship -- the USS Sullivans -- which was docked at the same fuel pod the USS Cole used in October 2000. The earlier attack was postponed because the bomb-laden attack boat sunk when it was launched.

So before the end of 1999, the FBI and the intelligence community clearly understood the foreign-based Al Qaida threat regarding targets within the United States. Congress and the Executive were fully briefed as to this threat analysis, particularly the leadership and membership of these committees in hearings, briefings, stoofree (ph) calls late at night and over the weekend were continuously apprised of this threat.

FREEH: In several appearances before this committee, I used a chart to depict the locations around the United States where radical fundamentalists cells were active.

The FBI fought unsuccessfully to continue fingerprinting and photographing visiting nationals from key state sponsors of terrorism states because of our concern that intelligence agents were being sent here to support these radical elements within America.

The notion that the FBI, other law enforcement agencies, the Department of Justice and the intelligence community were not focused on homeland threats is not accurate and belied by many factors. For example, as we prepared for and conducted the several, major trials of Al Qaida members -- Osama bin Laden, remember, was charged as a defendant in those indictments in New York City during 1999 to 2000 -- extraordinary security steps were taken to prevent an Al Qaida attack. If any of you saw Foley Square, the federal courthouse and the area around City Hall, 26 Federal Plaza and the New York Police Department during this time, it was totally fortified.

The closed streets, cement trucks, barricades, checkpoints and hundreds of heavily armed officers and agents were not set up to prevent the Al Qaida subjects from escaping from the courthouse. These unprecedented security measures -- enhanced after September 11 -- were designed to stop Al Qaida attacking the court, which found their own members guilty of blowing up our embassies in Africa.

Similarly, Pennsylvania Avenue was ordered closed by the national security advisor and the White House after the United States Secret Service director and I made a presentation which showed that a terrorist vehicle bomb could destroy the West Wing.

Prior to September 11, an incredible number of innovative and costly measures were regularly implemented by the FBI and the law enforcement community around the country -- at special events, conventions, inaugurations, public gatherings -- to prevent, among other threats, foreign based terrorists like Ressam and Yousef from attacking targets here.

The radical fundamentalist threat posed a clear and present danger here, and everyone knew it and understood it to be the same. At the same time, the FBI was critically focused and active regarding the terrorist threat to Americans overseas. Much of that activity I have recounted above.

Beginning in 1993, shortly after I became director, I determined that to protect America at home, the FBI needed to significantly increase its international role and liaison with our foreign law enforcement and security counterparts. I determined that to have an effective counterterrorism program that protected Americans in their homes and offices, the FBI had to have its agents in Cairo, Islamabad, Tel Aviv, Ankara, Riyadh and other critical locations around the world.

We opened FBI legat offices in those countries to strengthen our counterterrorism program. The critical alliances and partnerships with the law enforcement and security services in those countries has paid enormous benefits and has protected this nation and our people from acts of terrorism.

We later were able to open FBI legat offices in Amman, Almaty, New Delhi. When I left the FBI in June of '01, I had pending requests to establish FBI offices in 13 additional countries, having already more than doubled the FBI presence overseas.

I was pleased recently to learn that my prior requests to open offices in Tunis, Kuala Lumpur, Tbilisi, Sana and Abu Dhabi had been approved. The FBI must have this foreign presence and capability to have an effective counterterrorism policy.

When I left the FBI, I had proposed that we establish an FBI training facility in Central Asia, as we had done in Budapest in 1996, and had begun in Dubai, to enhance our ability to establish liaison and critical points of contacts in those important regions.

Many FBI personnel and I spent an enormous amount of time traveling overseas in order to establish an international counterterrorism capability. Because of that, in 1998, I was able to negotiate the return of two Al Qaida bombers from Kenya so they could be tried and convicted for the embassy bombings.

In 2000, I met with President Musharraf in Pakistan and negotiated the availability of a critical witness in one of our major terrorist prosecutions. I briefed him on the indictment against Bin Laden regarding the 1998 embassy bombings and asked for his assistance in capturing him in Afghanistan. FBI Agents and a prosecutor from the United States Attorney's Office from the Southern District later returned to Pakistan to continue those efforts.

In 1996, I met with Presidents Nazarbayev and Karimov of Kazakhstan and Uzbekistan, respectively, and discussed radical fundamentalist terrorism directed against the United States from Afghanistan and Iran. I asked for their help in fighting these threats to America.

I traveled extensively, as did scores of FBI men and women, throughout the Mideast, Central Asia, Africa, the Persian Gulf and South America with a very primary objective of strengthening our counterterrorism program so we could protect Americans at home.

Dozens of special agents went to places like the Triborder Area in South America, South East Asia, Africa, Greece, Georgia, Russia and many other places to carry out our counterterrorism mission.

For example, these relationships have paid enormous benefits. When we were examining the forensic evidence from the USS Cole case, we discovered that the explosive used was possibly manufactured in Russia. Because the FBI had been working in Russia since 1994, I was able to call the FSB director and ask for assistance. His response was immediate. Russian explosive agents and experts provided the FBI with all the necessary forensic and expert information requested, helping the case immensely.

The 1996 Khobar bombing investigation demonstrates the FBI's success and limitations in combating foreign-based terrorists who wage war against the United States. The FBI's 1996 Khobar bombing investigation is a prime example of the FBI's success in combating terrorism because of solid relationships with our foreign partners. It also points to the limitations in dealing with these acts strictly as criminal cases.

After that devastating terrorist attack on June 25, 1996, which killed 19 United States Airmen and wounded hundreds more, the FBI was instructed to mount a full-scale criminal investigation. We immediately dispatched several hundred FBI personnel to Dhahran, Saudi Arabia. And, supported by the armed forces, established a crime scene, interviewed available witnesses, obtained evidence and set out leads and a plan.

Working in close cooperation with the White House, State Department, the CIA and Department of Defense, I made a series of trips to Saudi Arabia in order to further the FBI's investigation. Because the FBI's prior contacts with the Saudi police service, the Mabaheth, and Interior Ministry had been carried on from offices as far away as Rome and Cairo, the FBI lacked any effective liaison or relationship with its counterpart agencies in Riyadh.

Fortunately, the FBI was able to forge an effective working relationship with the Saudi police and Interior Ministry. After several trips and meetings with the Saudi leadership and particularly, Prince Nayef, the Interior Minister, the FBI was granted permission to expand its presence and joint operational capability within the Kingdom. I was particularly fortunate to gain the trust and cooperation of Prince Bandar bin Sultan, the Saudi Ambassador to the United States, who was critical in achieving the FBI's investigative objectives in the Khobar case.

Due to Prince Bandar's forthcoming support and personal efforts, the FBI was able to establish an FBI office in Riyadh. Our Arabic- speaking special agent, who became the first FBI agent to be assigned to Saudi Arabia, quickly made critical liaison and relationships of trust -- were established between the FBI and the Mabaheth.

Evidence and access to important witnesses were obtained, and excellent investigative support was furnished to various teams of FBI Agents who worked in Saudi Arabia to pursue the case. In one instance, Canadian authorities, acting on Saudi information, arrested a Khobar subject who was brought to the United States and thereafter sent by the attorney general to Saudi Arabia for prosecution.

The cooperation the FBI received as a result of Princes Bandar and Nayef's personal intervention and support was unprecedented and invaluable. From time-to-time a roadblock or legal obstacle would occur, which was expected given the marked differences between our legal and procedural systems. Despite these challenges, the problems were always solved by the personal intervention of Prince Bandar and his consistent support for the FBI.

The case almost faltered on the issue of the FBI's critical request for direct access to six Saudi nationals who were being detained in the Kingdom and who had admitted participation in the Khobar bombing. One of these subjects, who had been returned to Saudi Arabia from another country, had key information which would later implicate senior Iranian government officials as responsible for the planning, funding and execution of this attack.

We needed direct access to these subjects because their admissions and testimony were critical to support our prosecution. Yet no FBI agent had ever been given such unprecedented access to a detained Saudi national, which access could potentially taint their prosecution under Islamic law -- for the same reasons the FBI would have been very reluctant to allow Saudi police officers to come to the United States and interview a subject under like conditions.

Moreover, by making these witnesses directly available to the FBI, the Saudis understood that they would be helping to provide evidence that senior officials of the government of Iran were responsible for the Khobar attack.

Despite these extremely sensitive and complex issues, the Saudis put their own interests aside to aid the FBI and the United States. Supported by Prince Bandar, Prince Nayef and the police and Crown Prince Abdullah, they decided to grant the FBI request to interview the detainees. Ambassador Wyche Fowler closely worked with me in this endeavor and we finally succeeded.

Teams of FBI investigators were then able to have access to these critical detainees and full debriefings were conducted in Saudi Arabia. As a direct result of these and later direct interviews, the Department of Justice was able to return a criminal indictment in June 2001, charging 13 defendants with the murders of our 19 servicemen. The indictment was returned just days before the statute of limitations would have run on some of the criminal charges.

This case could not have been made without the critical support and active assistance of Saudi Arabia and the State Department, through Ambassador Fowler.

The direct evidence obtained strongly indicated that the 1996 bombings were sanctioned, funded and directed by senior officials of the government of Iran. The Ministry of Intelligence and Security and Iranian Revolutionary Guard Corps were shown to be culpable for carrying out the operation. The bombers were trained by Iranians in the Bakka Valley.

Unfortunately, the indicted subjects who are not in custody remain fugitives, some of whom are believed to be in Iran.

Khobar represented a national security threat far beyond the capability or authority of the FBI or Department of Justice to address. Neither the FBI director nor the attorney general could or should decide America's response to such a grave threat.

While on the one hand, Khobar demonstrated the capability of the FBI, acting in cooperation with its foreign counterparts overseas, to work successfully under extremely complex conditions to pursue criminal cases, it also demonstrated that an act of war against the United States -- whether committed by a terrorist organization or by a foreign state -- can receive only a limited response by the FBI making a criminal case.

Mr. Watson recounted a meeting that he and I had with you, Senator Shelby, and Senator Bob Kerry. We came up to brief you on the Khobar attack and how the FBI case was proceeding. And I remember very much as we discuss this -- you and Senator Kerry commended the FBI for working on this matter, but you also commented that the FBI was somewhat out of its depth combating an act of war much graver than merely a horrific crime.

I never lost sight of that fact, and its truth is even more apparent after September 11. The FBI always viewed these investigations as secondary to any national security action and severely limited in their overall impact on a far away enemy such as Al Qaida.

I always stressed that the FBI investigations were completely secondary to the needs of our national security.

The National Commission on Terrorism made this point convincingly by using the pursuit of the Pan Am 103 case -- investigated by the FBI -- as an example of the more aggressive, national strategy needed against this scale of terrorism.

I quote from the commission's finding -- "Law enforcement is designed to put individuals behind bars, but is not a particularly useful tool for addressing actions by states. The Pan Am 103 case demonstrates the advantages and limitations of the law enforcement approach to achieve national security objectives.

The effort to seek extradition of the two intelligence operatives implicated most directly in the bombing gained international support for economic sanctions that a more political approach may have failed to achieve. The sanctions and the resulting isolation of Libya may have contributed to the reduction of Libya's terrorist activities.

On the other hand, prosecuting and punishing two low-level operatives for an act almost certainly directed by Qadafi is a hollow victory, particularly if the trial results in his implicit exoneration," close quote.

The commission concluded that, quote, "Iran remains the most active supporter of terrorism. The IRGC and MOIS have continued to be involved in the planning and execution of terrorist attacks."

FREEH: "They also provide funding, training, weapons, logistical resources and guidance to a variety of terrorist groups, including Lebanese Hezbollah, Hamas, PIJ and PFLP-GC," close quote.

The Commission noted that, quote, "In October 1999, President Clinton officially requested cooperation from Iran in the investigation of the Khobar bombing. Thus far, Iran has not responded. International pressure in the Pan Am 103 case ultimately succeeded in getting some degree of cooperation from Libya. The United States Government has not sought similar multilateral action in bringing pressure on Iran to cooperate in the Khobar Towers bombing investigation," close quote.

We must always recognize the limitations inherent in a law enforcement response. As we see at this very moment in history, others, to include Congress, must decide if our national will dictates a fuller response.

I'm going to skip the section on pages 89 to 102. I know, without objection, with respect to our information technology issues -- and say briefly there that we were far behind in our ability to acquire and have funded the information technology required by a competent law enforcement and counter-intelligence -- counterterrorism agency.

There is a long history there. I have set it out for you. I take some responsibility for the delay. The good news is that when I left the FBI, we were on track to the full funding of the Trilogy Program, which this committee is well aware of and which will put us back in the race with respect to IT.

In addition to IT, other critical technology assistance is required for the FBI to continue an effective war against terrorism. In 1994, as a result of the FBI's own initiative, Congress passed the Communications Assistance to Law Enforcement Act -- CALEA. This critical statute was vital to ensuring that law enforcement could maintain the technical ability to conduct court-authorized electronic surveillance.

Against tremendous opposition, the FBI persuaded Congress that this selectively-utilized technique was essential to working its most complex criminal and national security cases. Support from Chairman Leahy, Senator Hatch and many other members was critical in this legislation. The law simply allows the FBI to continue its court- controlled use of this capacity as the telecommunications world changes from an analog to digital network.

It has taken most of the last eight years to fund and to implement CALEA and faster progress needs to be made. But CALEA simply permits the FBI to maintain court-approved access to digital communications and stored data.

Another technical challenge called "encryption" then and now threatens to make court-authorized interception orders a nullity. Robust and commercially available encryption products are proliferating and no legal means has been provided to law enforcement to deal with this problem, as was recently done by Parliament in the United Kingdom.

Terrorists, drug traffickers and criminals have been able to exploit this huge vulnerability in the public safety matrix.

Many of you have heard me and others testify before you, over the years, about this problem. The International Association of Chiefs of Police, the 50 State Attorneys General, the National Association of District Attorneys have all identified this problem as the most critical technology issue facing law enforcement.

Many of you -- Chairman Goss, who is not here right now -- Representative Norm Dicks, Senator Kyl, Senator DeWine and Senator Feinstein, particularly, have provided outstanding leadership and gone to great lengths to address this problem.

In 1998, HPSCI adopted a substitute bill to S. 909, which effectively addressed all of law enforcement public safety and terrorism-related concerns regarding encryption products. Unfortunately, this needed counterterrorism assistance was not enacted.

As we know from Ramzi Yousef's encrypted computer files found in Manila, terrorists are exploiting this technology to defeat our most sophisticated methods to prevent their attacks.

I have long said, and repeat here, today, that this unaddressed problem creates a huge vulnerability in our nation's counterterrorism program. Neither the PATRIOT Act, nor any likely-to-be-enacted statute at this time, even attempts to close this gap.

Resolving this issue is critical for homeland security.

In 1995, Congress authorized the FBI to establish a Technical Support Center. The purpose of this facility was to provide federal and local law enforcement with the technical tools to improve court- authorized telecommunication interceptions and signal access for investigative purposes. I was pleased to see that this critical center was fully funded subsequent to September 11.

Many other critical technology needs must be addressed both with legal authorization, such as the once-proposed Cyberspace Electronic Security Act bill, and significant new resources for counterterrorism, cyberterrorism and dealing with weapons of mass destruction and proliferation.

Unfortunately, the convergence of technology and globalization now enable an individual terrorist or a small group of terrorists, operating from the other side of the world in a protected sanctuary, or operating in our backyard -- enables them to threaten our nation in devastating ways.

I think we need to acknowledge that the rules governing the FBI's counterterrorism efforts changed as a result of September 11. We must acknowledge that the rules are changed beginning with certain provisions of the USA PATRIOT Act.

The Department of Justice and the intelligence agencies have been given new tools, as the statute is entitled, to combat a dangerous enemy who follows no rules. Some of these new authorities have been granted by the Congress with a sunset provision. Some asserted by the government are being challenged in the courts, where they will ultimately be decided.

It must always be understood that prior to September 11, the FBI, as it always must, followed the rules as they were given to us by the attorney general and the Congress. For example, FBI Agents were not permitted without special circumstances to visit a suspect group's web site or to attend its public meetings.

Counterintelligence, domestic terrorism and informant guidelines promulgated years ago, and updated with new restrictions, curtailed our ability to collect information in national security cases. Those guidelines are now being changed.

Primary purpose requirements for FISA applications and information separation structures limited the sharing of criminal and intelligence information. Grand jury and Title 3 secrecy provisions severely restricted the dissemination of criminal terrorist information obtained during those processes.

I repeatedly testified before Congress that FBI agents were statutorily barred from obtaining portions of credit reports on national security subjects when used car dealers could order them and read them.

Before we interviewed detained foreign national Al Qaida subjects in East Africa in connection with the East African bombings, FBI agents duly gave them their Miranda rights.

And when I left the FBI in June of 2001, we were being criticized in some quarters because a valuable new electronic tool necessary to read a terrorist's e-mail, pursuant to a court order, had the hypothetical potential to be abused, as any law enforcement tool could be.

Everyone understands why and how some of the rules changed after September 11. But it is important to understand that the rules were changed by changed circumstances and that those circumstances changed the standards and expectations of both the FBI and the CIA.

During my tenure as FBI director, I was immensely proud of the cooperation and integration of FBI and CIA efforts to combat terrorism. Myself and recent DCIs, particularly George Tenet, have taken bold and unprecedented steps to work together and forge an effective FBI-CIA partnership to combat terrorism.

Exchanging senior officers, standing up the joint Osama bin Laden-Al Qaida operations and intelligence center, fully coordinating our legat and station chiefs, cross-training and many additional measures were taken to integrate our counterterrorism resources and capabilities.

Our joint efforts in the East Africa bombings is a template of how successful we were in working together. Some of these efforts cannot be described in this session.

This historical and successful integration does not mean that on every point of intersection, a lapse did not occur. But to focus on those isolated instances, while ignoring the huge successes of this top-down directed integration, is misplaced.

I personally credit George Tenet with making this happen and winning the trust and respect of the entire FBI in the process.

The best confirmation, by the way, of this fully integrated FBI- CIA counterterrorism effort is the fact that during my tenure no chairman or member of this committee ever raised with me, or the DCI, to my knowledge, the issue of our agencies being uncooperative or adverse to working together.

Conversely, it was repeatedly pointed out to me by your committees that the FBI and CIA were working together in an exemplary manner.

I would end with some recommendations.

One -- provide legal authority and significant new funding enabling the FBI to manage encryption technology.

Two -- significantly increase the number of FBI special agents and support positions with sufficient compensation required to recruit and retain the best men and women to combat terrorism.

Three -- significantly increase the FBI's technical support program and facilitate the FBI's access to emerging technologies and research and development by the private sector.

Four -- significantly increase the number and staffing of FBI legat offices overseas.

Five -- exempt the FBI from the compensation restrictions of Title 5.

Six -- change the FBI's procurement procedures to facilitate the efficient design and acquisition of equipment and technology.

Seven -- provide new funding for the FBI's international training programs and put the FBI in charge of all international law enforcement training.

Eight -- fund whatever it takes to achieve interoperability between all the agencies engaged in the war against terrorism.

Nine -- restructure the budget to give more flexibility to the DCI, attorney general and the FBI director to better allocate program funding and resources as missions evolve and new threats emerge.

Ten -- consider establishing a domestic public safety office in the Executive with responsibility for coordinating and supporting national law enforcement issues.

Finally, enhance the legal, technical and funding resources of the FBI rather than consider creating an intelligence agency to share its domestic, pubic safety responsibilities.

In conclusion, the FBI and CIA working together have accomplished much in fighting terrorism at home and abroad, but it is a constant and continuing battle. These agencies should remain the primary counterterrorism agencies for this mission. The DCI's authority for coordinating and implementing government-wide efforts in this regard should be expanded.

The war against terrorism must be waged relentlessly. It will require that significantly more resources be allocated to the FBI and CIA. These fine agencies and the brave men and women who fight this war cannot defeat some forms of terrorism without total government intervention no matter how great and heroic their efforts.

Al Qaida-type organizations, state sponsors of terrorism like Iran, and the threats they pose to America are beyond the competence of the FBI and the CIA to address. America must maintain the will in some cases to use its political, military and economic power in response when acts of war are threatened or committed against our nation by terrorists or their state sponsors.

Finally, however treacherous the enemy, the FBI must fight this war as a law enforcement agency of the Department of Justice, governed by the Rule of Law and the Constitution. The rules, statutes and guidelines which establish the legal authorities of the FBI may change, as they did significantly after September 11, as long as those changes are clearly defined and understood.

The FBI's adherence to the Constitution and the Rule of Law must not change. We do not have to sacrifice our freedoms to protect us.

Thank you.

GRAHAM: Thank you, Mr. Freeh.

Ms. White?

WHITE: Mr. Chairman, members of the committee, thank you for inviting me to testify before you in this very important joint inquiry.

It goes without saying that the terrorist attacks of September 11 profoundly affected and changed each one of us, and our nation, forever. But the most grievously impacted are, obviously, the loved ones of those who were so wantonly murdered that day, without warning. It is to them that we most owe whatever answers there are to be found for how it happened and the assurance that we, as a government, have done and will continue to do everything in our power to prevent such human devastation from ever happening again.

My limited knowledge on this very complex subject of international terrorism -- I am honored to share with you for whatever use it may be to your inquiry.

I have submitted a written statement, which has been made part of the record. And I will just, in my oral comments, highlight a few of the points in the written statement.

I would then be pleased, this afternoon, to answer any questions the committee has of me today or in the future, as your work goes forward.

To give just a little bit of context to start, let me describe, briefly, the international terrorism investigations and prosecutions of the United States Attorney's Office for the Southern District of New York.

WHITE: From the beginning of my tenure as United States Attorney, in June 1993 through its last day in January of 2002, I, together with a number of extraordinarily dedicated and talented assistant United States attorneys, agents and detectives from the FBI- New York City Police Department Joint Terrorist Task Force -- JTTF -- were actively involved in the investigation prosecution of international terrorists and terrorist organizations who were plotting to attack or had actually attacked Americans and American interests both in the United States and abroad. No work in our office had a higher priority.

International terrorism work of the Southern District of New York United States Attorney's Office began with the investigation and prosecution of those responsible for the bombing of the World Trade Center on February 26, 1993, in which six people were killed and over 1,000 injured. The work also included the investigation and eventual indictment Osama bin Laden, the leader of the Al Qaida terrorist network, indicted first in June 1998 for conspiracy, under seal, before he or Al Qaida had massively attacked anyone.

A copy of that indictment is included with my statement, Mr. Chairman.

Bin Laden and 22 other defendants were subsequently indicted in November of 1998 for their role in the bombings of the U.S. embassies in East Africa on August 7, 1998, in which 224 totally innocent people, including 12 Americans, lost their lives.

In addition to the prosecution of those who bombed the World Trade Center in 1993, and those who bombed our embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania, in 1998, the Southern District of New York United States Attorney's Office also successfully prosecuted approximately 20 additional terrorist defendants for their roles in three other major terrorist plots, which were, fortunately, thwarted by law enforcement -- the 1993 Day of Terror Plot to blow up government buildings and other structures in New York City; the 1994 Manila Air Plot to blow up a dozen jumbo jets flying back to America from the Far East; and then the December 1999 Millennium Plot Ahmed Ressam, an Algerian terrorist, trained in Al Qaida camps in Afghanistan to detonate a bomb at the Los Angeles airport.

In 2001, the Seattle United States Attorney's Office successfully prosecuted Ressam and the Southern District of New York Office successfully prosecuted to defendants who, from New York, provided material assistance to Ressam's plot in the form of money, credit cards and phony identification papers.

In all, the Southern District of New York United States Attorney's Office charged and convicted over 30 defendants for international terrorism and there were no acquittals.

All of the defendants are serving life or very lengthy prison sentences, without the possibility of parole.

There are, however, fugitives still at large in several of the cases, including Bin Laden, himself, who, as of September 11, had been under indictment for over three years and on the FBI's 10 Most Wanted List for approximately the same amount of time.

Fifteen of the 22 terrorists on the Most Wanted Terrorist List announced by President Bush on October 10, 2001, are fugitives in the Southern District of New York cases -- 13 from the embassy bombings case, including not only Bin Laden, but much of the leadership of the Al Qaida terrorist organization -- one defendant from the 1993 bombing of the World Trade Center, Abdul Rahman Yasin, who fled New York like Ramzi Yousef did, on the day of the 1993 Trade Center bombing and who, as you may have seen, was recently interviewed on 60 Minutes in a broadcast televised from Iraq -- and one defendant from the Manila Air Plot, Khalid Sheik Mohammed, who has been widely reported in the media to be one of the major planners of the September 11 attacks.

Now I will speak to when the threat of international terrorism was regarded as a threat to and in America and explain the particular importance in all of this to the Day of Terror Plot.

Now, certainly by the time our embassies in East Africa were bombed in 1998, we, as a government, knew a great deal about the threat posed by Bin Laden and Al Qaida to America. And at least by the time of the embassy bombing's indictment, filed in 1998, much of that knowledge was, indeed, a matter of public record. But the high risk that international terrorism and terrorists posed to America, both in America and abroad, was known and appreciated as a significant threat from at least 1993.

The bombing of the World Trade Center on February 26, 1993, itself, of course, represented a dramatic incident of international terrorism that Ramzi Yousef, one of its masterminds, had brought from abroad to America. But it was, at least for us, the follow-on terrorist plot in 1993 -- the Day of Terror Plot -- to blow up in a single day the Lincoln and Holland Tunnels, connecting New York and New Jersey, the George Washington Bridge, the United Nations and the New York FBI office in Lower Manhattan -- that led us in the Southern District of New York United States Attorney's Office and the FBI to conclude that international terrorism was a long-term, highly dangerous risk to the safety and national security of the United States.

The FBI and other public officials testified to this risk and spoke about it publicly to citizens groups. Prior to September 11, I also, personally, gave several talks discussing specifically the point that international terrorism had come from abroad to America and posed a significant continuing threat to America, both at home and abroad.

A copy of one such talk is included with my written statement.

The Day of Terror Plot, headed by the blind cleric, and leader of the G'amaat terrorist organization, Sheik Omar Abdel Rahman, was, fortunately, foiled by the New York FBI and the JTTF because they had been able to infiltrate that terrorist cell, which was operating in the New York-New Jersey metropolitan area, with an informant posing as an explosives expert. As a result, that plot could be, and was, carefully monitored and stopped before it could come to fruition.

The evidence necessary for the successful prosecution of Shiek Rahman and 11 of his followers was also obtained. It was, in short, a very successful prevention and prosecution effort by the New York FBI and the Joint Terrorist Task Force.

The Day of Terror Plot case, thus, illustrates one point I do want to make today and that is, at least from our perspective, we view the terrorist investigations and prosecutions we did from 1993 through 2002 as a major prevention tool. Everyone's goal was to thwart plots before they occurred and to neutralize dangerous terrorists so that they could not attack in the future.

In that effort, we worked very closely with the FBI and, especially later, the CIA and other intelligence agencies to ensure that the first priorities were always prevention and national security.

When criminal investigations and prosecutions could aid the overall national security effort, our office willingly and aggressively offered our help. From my vantage point, the counterterrorism strategy of our country in the 1990s was not, as I have read in the media and heard a little bit of today, criminal prosecutions, rather, as I saw it, criminal prosecutions were one tool in our counterterrorism efforts -- a tool that certainly neutralized for life a number of very dangerous international terrorists, including Ramzi Yousef, a mastermind of the 1993 Trade Center bombing and the architect of the Manila Air Plot, as well as Sheik Omar Abdel Rahman, the leader of the Day of Terror Plot and head of the G'aamat terrorist organization that later joined forces with Al Qaida.

It was also, of course, our hope that the indictment of Osama Bin Laden and the leadership of Al Qaida in 1998 would result in the apprehension and neutralizing of these and other terrorists who posed, and still pose, very grave threats to the safety of America and the world. But none of us considered prosecutions to be the country's counterterrorism strategy, or even a particularly major part of it.

In addition to cementing our view that international terrorism posed a significant threat to us, here at home, the Day of Terror Plot was also important for some other reasons. First, it showed the foothold that international terrorists had or were gaining in the United States. All of the defendants in the case were residing in New York and New Jersey -- some were here, in the United States legally, some were here illegally. I should say that there is no doubt in my mind that it is a critical matter of national security that our immigration policies and procedures be dramatically enhanced.

A number of the terrorist defendants in the Southern District of New York cases, including Ramzi Yousef, for example, entered the country illegally. Others remained in the country illegally, after they had come in legally, only to surface when they participated in a terrorist attack in the United States, like the bombing of the World Trade Center.

I guess the Sheik, himself, the leader of the group, was preaching his anti-American rhetoric in 1993 in mosques in Brooklyn, New York and Jersey City, New Jersey.

Second, and even more importantly, the Day of Terror Plot illustrates the importance of the infiltration of terrorist cells by human sources and informants. Such infiltration is, in my view, one of the most effective means of preventing terrorist attacks. It is not easy to do. There are significant language, cultural and expertise barriers that must be overcome. Nevertheless, in my view, whatever can be done to enhance the FBI's and the intelligence community's ability to develop human sources and operatives capable of infiltrating terrorist cells should be done, both in the United States and around the world.

At the conclusion of the trial of the Day of Terror Plot, which was in 1995, I made the decision to form an international terrorism unit in the Southern District of New York United States Attorney's Office and to staff it initially with those half dozen assistant United States attorneys who had been involved in the investigations and prosecutions of the 1993 Trade Center Bombing, the Day of Terror Plot and the Manila Air Plot. To my knowledge, that terrorism unit was the only one in the United States Attorney's Office prior to September 11.

I personally supervised our terrorism unit. I made the decision to establish a permanent terrorism unit because we had concluded that the risk of future terrorist attacks and plots was high and long term. And because, as a result of the knowledge, we and the New York FBI and JTTF had gained as a result of the two back-to-back 1993 international terrorism cases, we had, of necessity, amassed a great deal of intelligence about various terrorists and terrorist networks that we did not want to lose as we went forward. We wanted to pursue all leads of other terrorist conspiracies and attacks.

So, unlike with most other kinds of prosecutions, we did not close up shop after the Day of Terror Plot defendants were convicted and went to jail. We did not wait for the next attack. We, together with the FBI and the JTTF, actively continued to investigate other possible terrorist crimes and conspiracies to try to learn more -- to follow any lead that suggested itself.

While it is certainly the reality that not every terrorist attack can be prevented, our objective and priority must always be a perfect prevention success rate. We must do whatever is lawful in our effort to achieve that.

You have asked, in your letter to me, about the role and effectiveness of criminal prosecutions in the fight against international terrorism. I think as the Southern District of New York cases demonstrate, criminal prosecutions of terrorist defendants have been and can be effective tools to deal with terrorist who commit federal crimes and as to whom there is sufficient available evidence to prove such defendants guilt beyond a reasonable doubt, under the rules governing criminal trials in the American Criminal Justice System.

Prosecutions can also lead, and did lead, to cooperating defendants who provided invaluable intelligence on the terrorism threat, as well as trial testimony. These prosecutions also neutralized for life, or many years, a number of very dangerous terrorists, who would have, otherwise, continued to commit further terrorist acts. Some bombs were, thus, undoubtedly not built and detonated -- some planes were not blown up and some people were not assassinated. That is, obviously, a good thing.

But criminal prosecutions are, plainly, not a sufficient response to international terrorism.

For that, we plainly need more comprehensive measures and, most especially, a strong and continuing military response. That is my view today and that was my view prior to September 11.

Just as one example -- and I'll only give one -- of the limitations of the Criminal Justice System in dealing with international terrorism -- criminal prosecutions of international terrorists have limited deterrent effect. When thousands of international terrorists, all over the world, are willing, indeed anxious, to die in the service of their cause, we cannot expect prosecutions to effect significant deterrence.

Each of the Southern District of New York cases I have mentioned in my statement followed the one before it, culminating most recently in attacks of September 11. Prosecuting and convicting Ramzi Yousef for the 1993 World Trade Center bombing and the Manila Air Plot did not deter other would-be terrorists from bombing our embassies in East Africa in 1998 or from hijacking and flying those planes into the World Trade Center and the Pentagon on September 11.

WHITE: You have asked, also, about the sharing and dissemination of information related to the threat of international terrorism. Your question is whether, prior to September 11, the information about international terrorism gathered by the various parts of our law enforcement and intelligence communities was shared and disseminated sufficiently. This is one of many areas where I must defer to others who have the complete picture.

While we certainly had concerns about this issue in our office, my general impression was that the information and evidence developed in at least the terrorism investigations and prosecutions in the Southern District of New York was generally shared by the FBI with the intelligence community and other parts of our government, as well as with local and state authorities. Much of the information was, in fact, developed by the intelligence community and local and state agencies worked directly on the JTTF, which worked each of the Southern District of New York cases.

I cannot speak to what information the intelligence community may have had that was not shared with the FBI or law enforcement generally, if any, but I can say that the relationship was a very positive and cooperative one.

The CIA, in particular, was of invaluable assistance in the Southern District of New York cases and investigations.

I can also say, from my personal experience, as a prosecutor and U.S. attorney for many years that under the leadership of FBI director Louis Freeh and Director George Tenet of the CIA, the working relationship and cooperation between the FBI and the intelligence community, at the highest levels, was excellent. And, even more importantly, we saw a sea (ph) change of improvement in the 1990s in the ranks of the agencies, as well. Nowhere was this cooperation more apparent d productive than in the investigation of the terrorist threat posed by Al Qaida and Osama bin Laden.

One other question on information sharing that I should speak about and that is whether the Grand Jury secrecy rules embodied in Rule 6(e) of the Federal Criminal Procedure -- Rules of Criminal Procedure -- prior to their amendment by the USA PATRIOT Act -- impeded the sharing of information between the law enforcement and the intelligence community.

My view is that Rule 6(e) was not a significant barrier to the sharing of information developed in the Southern District of New York cases and prosecutions. It could have been, but it was not.

Grand Jury secrecy rules do not appear to me to have impeded the sharing of information in the Southern District of New York investigations and prosecutions for several reasons. First, the vast majority of information obtained was not obtained to the Grand Jury, but by non-Grand Jury means of investigation to which the Grand Jury secrecy rules do not apply.

Second, if any relevant information was obtained to the Grand Jury, to which Rule 6(e) might apply, we were generally and I think always, actually, able to obtain it through alternative means, as well, so that it could be shared.

Third, quickly, over time, the information we and the FBI obtained in our investigations became a matter of public record, through publicly filed indictments and other court documents, as well as public trials with detailed written transcripts and publicly filed exhibits. I illustrate what I'm saying now in my longer written statement with the East Africa embassy bombing indictment in 1998 and all of the things that were publicly known in 1998.

One final point on this, our constant mindset in the United States Attorney's Office was to try to maximize the sharing of information real time so that it could hopefully be used by others to gain further information, and most importantly, to be used to possibly detect terrorist plots and to safeguard against any threats posed.

This leads me to my final point about information sharing, but in the other direction. And I have to say if I were to single out the most significant concern that I had about our counterterrorism efforts, prior to September 11, dating from at least 1995, it was that I feared we could be hampered in our efforts to detect and prevent terrorist attacks because of the barriers between the intelligence side and law enforcement side of our government.

Some of these barriers were and, perhaps, still are statutory. Some were, and perhaps still are, cultural. Some were, and still are, court imposed. Some were, and may still be, voluntarily imposed by the agencies by way of guidelines to assure compliance with all legal requirements and to make an adequate record of such compliance.

Our intelligence community is charged with gathering foreign intelligence to protect the national security. The FBI has a foreign counter intelligence function and law enforcement or criminal function. Historically, those functions have been separately staffed.

International terrorism, however, cuts across both of these functions. It does not fit as neatly into one category or the other as espionage may have during the Cold War.

Much of the information gathered by the intelligence community is, most often, also evidence of a possible criminal conspiracy or other crime. Much of the information gathered by law enforcement, as evidence of a terrorist-related plot, is also most often foreign intelligence information, relevant to the national security.

And yet, at least as things were done in the 1990s through September 11, as we perceived it, that evidence, if gathered on the intelligence side, could not be shared with prosecutors unless and until a decision was made in the Justice Department that it was appropriate to pass that information over the wall to prosecutors, either because it showed that a crime had been committed that needed to be dealt with by an arrest or further overt investigation or because evidence of such crime was relevant to an already ongoing criminal investigation.

Because of this structure and these requirements, I do not know, even today, what evidence and information might have been relevant to our international terrorism investigations that was never passed over the wall. I don't know that there is any, but I don't know that there isn't any either.

To make a decision to pass information over the wall requires in the first instance a recognition of what that information is and what its significant is. In the area of international terrorism, this is a very difficult task, made more difficult by a combination of language and cultural barriers, coded conversations, literally tens of thousands of names of subjects that are confusing and look alike and an unimaginably complex mass of snippets of information that understandably may mean little to the people charged with reviewing and analyzing the information and deciding whether to recommend that it be passed over the wall.

A prosecutor or criminal agent who, as it happens, has, for many years, been investigating particular terrorist groups or cells and who has, thus, amassed a tremendous body of knowledge and familiarity with the relevant names and events might well recognize as significant what seems to other conscientious and generally knowledgeable agents or lawyers as something essentially meaningless.

What can happen, and I fear may have happened -- but I don't know that -- is that some relevant information that could have been passed over the wall wasn't and, thus, an opportunity could have been lost to make a connection that might have led to a further investigative step that might have led to the detection of an ongoing terrorist conspiracy.

We must, in my view, do everything conceivably possible to eliminate all walls and barriers that impede our ability to effectively counter the terrorism threat. If policy and culture have to change to do that, they must change. If the law must be changed to do that, I would change the law.

Indeed, I believe the Justice Department and the Congress thought that the law had been changed to help address this problem by the USA PATRIOT Act. A recent decision by the Foreign Intelligence Surveillance Act court -- the FISA court -- now on appeal, however, suggest otherwise. The FISA court decision also eludes to certain enhancements to the wall that the FISA court imposed prior to September 11, effectively making the court the wall in certain international terrorism investigations.

The walls that so concerned us throughout my tenure as United States attorney, thus, were built higher prior to September 11. While we were not made privy to the full rationale for this decision, because we're on the other side of the wall, and we certainly would not condone any misrepresentations -- inadvertent misrepresentations to any court or any abuse of the FISA authority, raising the walls did concern us greatly, from a public safety point of view.

We voiced those concerns with officials in the Department of Justice prior to September 11. We do not know what, if any, relevant information was kept behind those walls.

Incidentally, when I was asked after September 11 by the Justice Department and FBI Director Bob Mueller what legislative changes we would recommend, we made a number of recommendations. But what I said was the single most important point is to get the walls down between the intelligence and the law enforcement community. That remains my very strong view today.

I, in my written statement, offered a number of other recommendations, but the single most important recommendation I would make to the committees would be to address the full range of issues presented by the bifurcation of the intelligence and law enforcement communities and functions as they operate in international terrorism investigations, including the permissible use of FISA and the dissemination and use of the product of FISA searches and surveillances.

And so I will end there by thanking you very much for this opportunity to share my perspective and concerns.

Thank you.

CHAIRMAN: Thank you, Ms. White. That is very helpful.

And for those who have testified while we were out of the room, in part or in total, our apologies for having a voting schedule the way it is.

It has left a time bind and I am advised that we knew ahead of time that Senator Rudman had to leave at 1:00. So I am going to ask the indulgence of the members and our guests to switch the order slightly.

What I would like to do, Dr. Pillar, is save your remarks until after lunch. And we'll start at 2:00 with your comments and allow the members who are here, using the abbreviated procedures that we have, to ask any questions of Senator Rudman that they may have, in order to take advantage of his time.

That would mean Judge Freeh and Ms. White that questions that we would have for you would be also postponed until after Dr. Pillar's presentation this afternoon. Does that cause any angst to anybody on the...

FREEH: No.

CHAIRMAN: ... panel?

If there is no objection from members, then, we will proceed that way.

And if I could have the list of the questions -- I think Mr. LaHood -- I am going to call these in order for, again, questions for Senator Rudman. And I am going to do it in the order we usually use. But I would ask members to understand that we've only got 20-some minutes. So we'll only have one question each on this, if that's possible.

Representative LaHood, you're recognized, sir.

LAHOOD: Senator, thanks so much for the enormous service that you've given to our country, not only in the United States Senate, but to these other issues that you have been so intimately involved with.

The one question that I would have of you -- there is an idea floating around here, which was actually adopted by the United States Senate on an amendment to homeland security with more than 90 votes, to establish a blue ribbon commission dealing with 9/11.

I have been opposed to this idea of a commission -- I'll just state that for you. But I would be very interested in knowing your views on this idea of establishing a so-called blue ribbon commission to look at what happened with 9/11 and make recommendations for the future.

RUDMAN: You know, I've been asked that a number of times. And, frankly, you know, I go back and forth because I think there are a lot of things that have to get done. And I think a lot of us know what has to get done. And we ought to get about doing it. And commissions tend to postpone action sometimes. And that's not good.

The other problem, though, that you face is that my sense is, from traveling around the country and speaking, the American people really don't think yet that the Congress has fully explored all of the events that have happened. I don't agree with that. I think a lot of that is happening here. I think a lot of it has happened in the Judiciary Committee and other committees of the Congress.

But the bottom line is that you've got a constituency out there that you're going to just have to decide whether or not they will feel this government is being open enough with the hearings that have been public, as opposed to a commission.

If I were here today and had to cast a vote, I won't give you and this hand -- other hand answer -- I guess I would vote for the commission to make the American people feel that Congress is not hiding anything -- not bearing anything. And the American people will learn exactly what happened.

Well, frankly, I think they know pretty much what we know about now.

That's my own view.

CHAIRMAN: Senator Feinstein?

FEINSTEIN: Thanks very much, Mr. Chairman.

Senator Rudman, let me ask you this question -- former Director Freeh, I think, made a very compelling case on what the FBI has accomplished in many of these investigations. As one that has looked into both sides of this from the FBI law enforcement perspective, the CIA intelligence perspective -- some have written -- and later, on my more extensive questioning I'm going to talk a little bit about William Otem's (ph) views on this -- that the culture of the FBI is so indigenous as a law enforcement agency that it really cannot be an effective intelligence gathering agency.

Do you agree with that? And if not, why?

RUDMAN: Yes. I do not agree with that. And for background, Senator Feinstein, let me point out that as chairman of PFIAB, I had a number of occasions to call Director Freeh, before the PFIAB, as well as the director of the CIA to look at these very issues that we are all talking about today.

It is my view that the best domestic intelligence gathering organization which is on the ground today is the FBI. They have their collection, if you will, in every field office. And I don't know how many there are, Louis, but...

FREEH: Fifty-six.

RUDMAN: ... -- there are 56, plus...

FREEH: Forty-four overseas.

RUDMAN: ... there are the 44 overseas. This is the best collection that you're going to get domestically.

And, of course, there are many other agents in other places.

The problem has been I think not quite as you posed the question -- the problem has been that they have had a law enforcement mindset as their approach. And I think that Mary Jo White's estimate was extraordinary useful in looking into how a United States attorney, in the most critical area of the country in this area, had to look at this issue and how to deal with it.

To me, it is not a question of trying to get a new agency to do the domestic intelligence -- counter intelligence. It's a question of the resources that were asked for.

Now, I can tell you that in 1998 or 1999, Director Freeh came to me and asked me to enlist my support with people on the Hill to try to do some of the things that he felt at that time were necessary. And as I recall, they were personnel, but they were also technology. It was the technology that was really going to -- they recognized they couldn't get a grip on all the information that was coming in.

And I did try and we had some success. But for reasons that we all understand, the Congress can't always do what agencies think are vital.

But, as you heard his testimony, I think the numbers -- 800 requested and five granted -- and the kind of money and technology -- I don't think the bureau was given the resources it needed during the mid to late 1900s to develop the kind of intelligence efforts it needs.

I think they can do it. But they need a lot of resources. And I think Director Mueller has moved strongly in the right direction in taking what Director Freeh started and building on it to have, truly, a domestic intelligence unit that is strong on analysis. They've already got the collection.

So that would be my answer.

FEINSTEIN: Thank you very much.

Thank you, Mr. Chairman.

CHAIRMAN: Mr. Roemer?

ROEMER: Thank you, Mr. Chairman.

Senator, nice to see you up here. Thank you for your help in the past, as well, too, on many of these very important issues.

I want to thank you, as well, for your work on the commission that you served on. I happen to agree with your bottom line that a new blue ribbon independent commission is needed in this instance. And I want to come back to your service on the commission that reported to Congress some very important findings. And one of the problems around Congress is that they don't' implement some of the good recommendations made by very knowledgeable people in law enforcement -- in public service -- in intelligence gathering that serve on these commissions.

In your testimony, you mentioned that a couple members had worked to implement the homeland security department, which is now in a state of nowhere. We don't know what's going to happen to that. But I would appreciate, just very succinctly, three other high priority recommendations made by your commission that this Congress should act on and act on quickly.

RUDMAN: You're talking about the Hart-Rudman Commission?

ROEMER: Yes, sir.

RUDMAN: Yes.

Well, the homeland security, as you know, that department was our number one priority, for the very kinds of things you've heard today about stovepipes and having to go over the wall with information. We've got 44 different agencies right now who have some piece of this. They have separate information technology -- they have separate missions. And that has to be brought under control. And I would urge the Congress and the administration to settle whatever disputes you have over these labor issues and please get this thing established because, frankly, just a -- we haven't got anything done yet.

And until that gets deployed, it'll take a year to a year-and-a- half to get it working, so I think that is number one priority.

The second priority, I believe, is starting to take form. If we have -- not a question of if -- when we have another terrorist incident in the United States -- and we will have one -- we have recommended in our report, in great detail, the fact that we have citizen soldiers in this country deployed all over American, called the National Guard, that are the best line of defense in terms of first response. Because if we have a weapons of mass destruction in this country, no one other than the United States military will be able to respond and help citizens. They are the only ones who are trained -- who have the equipment -- who have the communications.

The National Guard should be dually trained. They should have their regular mission, but there should be strong dual training in responding to terrorist attacks.

If something happened in New England, you've got the Guard units from all over New England could focus on, let's say, Boston. In California, you've got those from the Western states -- from Oregon -- Seattle and the state of California.

As we looked at these Guard units, we felt they really ought to be the core of the first response to major terrorist attacks, be it medical, communications, transportation, law enforcement.

And so that would be my second priority.

My third priority is port security, which I just certainly hope that appropriate committees will start to take a look at. With all due respect, I'm a little tired of having my shoes taken off at LaGuardia airport. I usually dress about like this. I don't think I look much like a terrorist. And how many dollars have been spent in examining my shoes, I don't know.

But I will tell you this much, if 50,000 containers are coming in every day into every port in this nation -- 1.5 percent are being inspected. Who knows what they contain? It is a high priority. And the problem is something is going to happen and then we're going to all say, "But we didn't know." Well, we did know.

And it's not only our commission that's made that statement.

Those are my three priorities right now.

ROEMER: Thank you.

CHAIRMAN: Senator Roberts?

ROBERTS: Thank you, Mr. Chairman.

Let me say, Warren, that your words of wisdom did not fall on deaf ears, at least in terms of the official report, which we hope doesn't simply collect dust.

We have your report, "Preparing for the 21st Century;" the Cole (ph) Report, which just popped out here about, what, a week ago; the Jeremiah Report; the CSIS, "Defending America in the 21st Century;" the Gilmore Commission on Terrorism; and the Bremmer National Commission on Terrorism; and the Otem (ph) study, which was back in 1997.

I just tried to add up the similar recommendations by all of these commissions and I think I have 95 recommendations.

RUDMAN: That's about right.

ROBERTS: And they were made, in an early September closed hearing, part of this official record. So we do have a good foundation.

One of the things that I would like to ask you -- mentioned how many agencies involved in regards to the agencies that think they have the jurisdiction in regards to terrorism and homeland security. I can't remember the number. You just said -- what -- 40?

RUDMAN: About 44.

ROBERTS: We asked 46 a year ago July to come before some appropriators -- the Intelligence Committee and the Armed Services Committee. This is some, what, 15 to 16 months ago? At that time, there were 46.

We asked them what their mission was, what they really did and who was in charge.

And, at that time, according to my count, my staff estimated there were 14 subcommittees and committees in the Senate alone that allegedly had jurisdiction.

Since that time, we have been able to identify 80 federal agencies who have some degree of jurisdiction in regards to homeland security and terrorism. And I'm not making this up, according to the leader, Tom Daschle, and also Trent Lott -- or the leadership, there are 88 subcommittees and committees now that feel they have some jurisdiction.

Seems to me the Congress of the United States has the responsibility to get our act together, just as we do in terms of trying to really coordinate homeland security.

You're a former chairman of this outfit. It seems to me that we could possibly think about joining the House and Senate into a joint committee -- not make it a select committee -- make it permanent -- reduce the numbers and tell the members who serve on the intelligence committee they are limited, to some degree, with the outside committees upon which they serve.

I am not sure what -- would have the term limits in there, as well.

What do you think about that?

RUDMAN: Well, Senator Roberts, let me tell you, if you turn to either recommendation 49 or recommendation 50 of the Hart-Rudman Commission, you will find your words are embodied into a recommendation.

We believe that the vastness of this jurisdiction over homeland security is so different than anything else the Congress has dealt with before that you must have the consolidation of committee responsibility for homeland security, certainly in both the authorizing and the appropriating area. It is absolutely essential.

If you don't then whoever the new director is, instead of spending time with these five or six new, key agencies that are going to be coming in to his new cabinet department and giving them mission statements and building the kind of lateral communications you need and having the diversity of leadership you're going to need to move across these heretofore stovepipes, he's going to spend all of his time up here. Going to be here all the time.

And, with all due respect, when I was here, I used to sometimes wonder whether or not we weren't bearing too hard on the director of the FBI or the secretary of defense. These people have to spend so much time up here. Well, a lot of it is necessary. After all, the oversight comes from the Congress and I understand that.

But in homeland security, unless you adopt some sort of a different plan, with the House and the Senate either jointly or each having one or two committees, I, frankly, think you're going to really cause enormous problems, not only time problems, but, frankly, there is going to be a different of opinion amongst all of these committees about how certain things ought to be done.

So I would commend you look at our report -- 49 or 50 -- it was unanimous recommendation.

ROBERTS: I looked at the report and I introduced legislation. And it is collecting dust.

RUDMAN: We appreciate it. As a matter of fact, Senator Roberts, I would thank you. You are one member of Congress amongst five or six, who came to the press conference in January of 2000 or December -- when we announced that report.

CHAIRMAN: Chairman Graham?

GRAHAM: Senator, as you said, the centerpiece of your recommendation was the establishment of a department of homeland security. I think that is close at hand, but it's also going to be occurring at a time when we have intelligence information that indicates we might have additional risk as a result of what's happening around the world.

In fact, earlier today, the director of Central Intelligence sent to this committee a letter in response for our request for further declassification of the national intelligence estimate that was issued last week.

And in the letter, Mr. Tenet states, "Baghdad, for now, appears to be drawing a line short of conducting terrorist attacks with conventional or chemical or biological weapons against the United States. Should Saddam conclude that a U.S.-led attack could no longer be deterred, he probably would become much less constrained in adopting terrorist actions. Such terrorism might involve conventional means, as with Iraq's unsuccessful attempt at a terrorist offensive in 1991, or chemical and biological weapons."

So we're at a point that the threat level is up. And we are about to pass this new department and you indicated, correctly, maybe conservatively, that it's going to take some period of time for the new department to go through its transition period and be fully effective.

With that as a predicate, any suggestions of what we should be doing in the early stages of this new department so that we don't have the unintended consequence of making us more vulnerable because of the almost unavoidable disruptions that such a major new reorganization entails?

RUDMAN: That's a very interesting question. And I want to give you an answer because I have thought about it a bit -- not in quite the way you phrased it. But let me put it this way -- one of the things that is vastly misunderstood, certainly in the country, and maybe in parts of the Congress, is that each of these agencies that is going into the homeland security department is going to maintain its identity. The Coast Guard will still be the United States Coast Guard -- FEMA will still be FEMA -- INS will be INS -- Secret Service will be Secret Service -- I mean, and the one or two others that they've added to what our recommendations were.

What they are going to have the advantage of is being part of one department, with a common leadership and a common technology base.

I think it's very important that once this legislation passes that the Congress, in the transition section of the statute either in report language or in stature and language, make it clear that these agencies are to continue to operate at their present levels of activity in their -- whatever their tempos are, irrespective of the fact they are being merged into the new agency.

RUDMAN: The merger can take place administratively, but...

(AUDIO GAP)

(RECESS)

CHAIRMAN: Could I ask the committee to come back to order, please, and invite our guests to be seated? And we are going to start with Dr. Pillar, who is going to tell us a lot, I think, about terrorism because, as I have said before, I think he is one of the great authorities. And if you haven't read his book, you should.

The floor is yours, sir.

PILLAR: Thank you, Mr. Chairman, and members of the committees.

I appreciate this invitation to testify in this hearing on lessons from past U.S. experiences in confronting international terrorism. And I commend the committees for holding a hearing with this particular focus. Reducing the chances of terrorist strikes against our nation's interests requires examination not only of a single incident, how ever tragic and traumatic that is, but also understanding what has and has not been tried in the past, what changes in our approach have already taken place and what possibilities and limits have already been demonstrated.

One lesson from the past is that the principal characteristics of the terrorist threat we face today and the challenges for intelligence that those characteristics pose have been with us for quite some time. The difficulties that the September 11 case presented to intelligence and to law enforcement, for that matter, were all too typical of what we have repeatedly faced in the past. Terrorist groups, or more specifically, the parts of them that do the planning and the preparation for terrorist attacks are small, highly secretive, suspicious of outsiders, highly conscious of operational security -- and for those and other reasons, extremely difficult to penetrate.

The collection challenges go even further. The intelligence target is not just a fixed set of targets. It is anyone, even if not a card-carrying member of Al Qaida or some other known terrorist group and even if the person has not been involved in terrorist activity in the past, but anyone who may use terrorist techniques to inflict harm on U.S. interests.

Along with the collection challenges are the analytic ones. The material that counterterrorism analysts have had to work with has always consisted of voluminous, but fragmentary and ambiguous reporting, much of it of doubtful credibility, that provides only the barest and blurriest glimpses of possible terrorist activity. The analysts have long been faced with blizzards of red flags, dots, call them what you will, that could be pieced together in countless ways. if pieced together in the most alarming ways, the alarm bell would never stop ringing.

Although the task of tactical warning has always run up against these formidable challenges, the scraps and fragments that intelligence collects often have enabled analysts to offer warning of a more strategic nature -- that the terrorist threat from certain kinds of groups or in certain countries or regions or against certain categories of targets or in response to certain kinds of events is higher than it is elsewhere. The result has been a persistent pattern in the intelligence community's performance on this subject that has been noted, for example, in the findings of the investigation that was led by General Wayne Downing into the bombing of Khobar Towers in 1996.

That pattern, an absence of tactical warning, but good strategic intelligence of the underlying terrorist threats, is what you get when earnest efforts are made to extract what can be extracted from this extremely hard intelligence target.

Certainly the intelligence community must spare no effort to obtain tactical intelligence on future terrorist attacks against U.S. interests. But years of experience teach us that even if high priority is given, as it has been, to the development of sources for that kind of very specific information, and even if considerable imagination and resources are applied to that task, truly well-placed sources inside terrorist groups -- the kind that can yield plot- specific information -- will always be rare.

A corollary lesson is that the United States should avoid overly heavy reliance on intelligence to provide tactical warning.

The panel that was chaired by retired Admiral William Crowe that examined the embassy bombings in 1998 noted an unfortunate tendency among security managers toward such excessive reliance on tactical warning.

Intelligence officers share a responsibility for countering that tendency by reminding consumers what we don't know, as well as what we do. To borrow an advertising slogan -- an educated consumer is our best customer.

As important as tactical warning is, it represents only a fraction of what intelligence has contributed through the years to counterterrorism, including contributions that have saved lives. Strategic forms of intelligence can be, in fact, even more useful than the tactical as inputs to decisions to security counter measures, many of which involve costly long-term programs to respond to continuing threats, rather than to a single plot.

One subject that received strategic attention from the intelligence community in the 1990s was threats to the U.S. homeland. The 1993 attack against the World Trade Center was certainly a key event. It did not generate anything close to the level of public attention and concern that we would see eight years later. And that, of course, is the difference between an attack that kills six people and one that kills 3,000.

But to intelligence community analysts, the larger threat to the homeland was apparent. The goal of the World Trade Center truck bombers in '93, after all, had been nothing less than to topple the twin towers and kill thousands in the process.

The community's work on this subject over the next couple of years culminated in 1995 in a national intelligence estimate the most formal and fully coordinated form of intelligence assessment -- one that is personally approved by the DCI and heads of the community agencies. The sole subject of this estimate was foreign terrorist threats to the U.S. homeland.

The FBI, along with CIA and other intelligence community agencies participated fully in preparation of this estimate so that it would reflect the bureau's information on the foreign terrorist presence in the U.S., as well as the intelligence available to CIA and others.

This estimate, as was noted in one of your joint inquiry staff reports, addressed civil aviation as an attractive target that foreign terrorists might strike in the United States.

This particular aspect of the estimate was the subject of subsequent efforts involving the DCI counterterrorist center, the FBI, the National Intelligence Council and the FAA to sensitize relevant consumers to that particular threat. The FAA arranged, in fact, a set of special briefings for representatives of the aviation industry at which senior CIA and FBI counterterrorism specialists, like myself, presented much of the material in the estimate as part of an effort to persuade the industry of the need for additional counterterrorist security measures for domestic civil aviation.

I might also add I was proud later on to participate in, along with my intelligence community and FBI colleagues, in the work of the Gore Commission, which Mr. Freeh mentioned earlier.

What is the lesson to be drawn from this episode, apart from the direct one that the intelligence community, or at least part of it, and the FBI were working closely with the relevant regulatory agency as early as the mid-1990s to call attention to the foreign terrorist threat to domestic civil aviation? Well, I think it is that we, as a nation, tend to be more willing to respond with expensive new security measures in response to past tragedies that have already occurred than to projections of threats that have not yet materialized.

The intelligence community certainly has an important duty here. As any new intelligence analyst is taught, what matters is not just to make correct predictions and hit the right notes, which may look good in postmortems, but to beat the drum loudly enough about impending threats to have some chance of making an impact on policy.

In this instance, perhaps the intelligence community could have beaten the drum even more loudly than it did. But it is tough to compete with what had been, right up until September 11, many years of civil aviation operations in this country that had been virtually untouched by terrorism.

The record of the U.S. intelligence community changing in response to the threat from international terrorism goes back farther than the end of the Cold War and back before the episodes -- the cases that were examined by your staff -- back to the 1980s when the main U.S. concern was with Hezbollah's activities in Lebanon, including the bombing of the embassy and the Marine barracks in the years of hostage-taking, as well as the terrorist activities of certain states.

The community's principle response, at that time, and in many ways still it's most important response ever, was the creation of the DCI Counterterrorist Center, or CTC, as it is called, in 1986. This step was a bureaucratic revolution. It involved slicing across long- standing lines on the organization chart, bringing analysts and operators to work more closely together than they ever had before and benefiting from the synergy that comes from having people with different skills and specialties attacking the same high priority problem together.

Further refinements were made in CTC in subsequent years. One, for which I am proud to claim personal credit, was the creation of a permanent cadre of counterterrorism analysts, replacing an earlier system in which the analysts working on counterterrorism were on loan from other offices, which continued to control their promotions and their careers.

There were also reconfigurations within the center, including the special Bin Laden unit, which you've already heard about from Ms. Hill and others.

Another refinement in CTC was the increased representation of agencies other than CIA, particularly, but not exclusively, law enforcement agencies, such as the FBI.

Much has been written and said, particularly over the past year, about the FBI-CIA relationship. I find elements of truth in much of this commentary, but I also find more of it dated. The relationship, although it had problems at the beginning of the 1990s, improved substantially during the course of the decade. This was partly due to a commitment at the top of each agency to make it work. And Director Freeh and Director Tenet both deserve a lot of credit for that. It was also due to other measures, such as the cross assignments of personnel that you've heard about from earlier witnesses.

I would also add that the relationship with the Southern District of New York, Ms. White's old office, became, as she already noted in her testimony, particularly close on the Bin Laden-related cases.

Along with these changes involving personnel and organizations, CTC's methods and operational strategy also evolved. Efforts to recruit well-placed unilateral sources continued to have high priority, but CTC developed during the 1990s a strategy that recognized that although information about specific terrorist plots was rare, other information about suspected terrorists and their activities was more feasible to acquire. The strategy was to work with many foreign government partners -- foreign police, intelligence and security services to disrupt terrorist cells using whatever information we could collect about them.

Most terrorists commit other illegal activity, besides terrorism and this became the basis for numerous arrests, interrogations and other disruption initiatives, some of which my co-panelists already referred to -- somewhat akin to nailing Al Capone for tax evasion. This type of disruption work must continue, in my judgment, to be a major part of U.S. counterterrorist efforts. It is slow, it is incremental, it does not yield spectacular, highly visible successes, but I am convinced that by impeding the operations of terrorists, it has prevented some attacks and saved some lives.

The main lesson I hope the committees draw from this capsule history is that there already has been a long and substantial evolution of the intelligence committee's approach to tackling international terrorism. Most of the innovations worth trying have already been tried. I'm sure all of us in this room wish there were some one further change or set of changes that would give us assurance that something like September 11 would never happen again. But I am not aware of such a step that would provide that kind of assurance. And I don't believe there is one, even though there clearly is room and need for additional improvement as long as our counterterrorist batting average is anything less than 1,000, which means, indefinitely.

As we work to avoid recurrence of the sorts of errors and omissions that have received so much attention in the September 11 case, we should try not to reinvent wheels already invented or, even worse, to undo beneficial adjustments made in the past.

We should also be careful not to give the American people any sense that with some new set of changes the problem of international terrorism has somehow been solved.

Mr. Chairman, my written statement discusses other topics you asked me to address, but let me wrap up by attempting to respond to your request for recommendations. I'll mention a few matters that I think have most direct concern to these committees, while emphasizing that, for the reasons I mentioned earlier, even major new efforts or initiatives are apt to yield only modest results.

PILLAR: First, it is vital to have sustained -- underscore the word "sustained" -- long-term public support for what the intelligence community needs to do in counterterrorism, with everything that implies regarding resources.

The main impact that the various attacks on U.S. targets had on the work of the Counterterrorist Center over the past decade-and-a- half was that those were the times when public interest in the subject spiked and resources went up. When public interest was lower, as time passed without a major attack, which was the case as the '80s moved into the early '90s, resources were much tighter.

The vital painstaking work of taking apart terrorist groups and terrorist infrastructures is long-term work. And it cannot be done with the kinds of ups and downs in support that have occurred sometimes in the past.

Second, we probably should try to make more extensive use of multiple sources of data, including non-traditional sources, to detect possible terrorist activity. And by this, I mean not just using watchlists and checking names while working on individual cases, although that is, obviously, very important, but rather a broader exploitation for intelligence purposes of such things as travel and immigration data and financial records.

I've always thought that trying to do this involved immense practical difficulties, ranging from the use of multiple names to problems in getting some of the information from the private and public sources that own it. I still think it involves that.

It would involve looking through huge haystacks with only a chance of finding a few needles. But the standards for return on investment in counterterrorism changed on 9/11. And perhaps this is an avenue that we need to explore further.

Third, and this goes far beyond what the intelligence community, itself, can accomplish, we must nurture foreign relationships to get the cooperation of foreign governments that is so vital to a host of counterterrorist matters, especially including intelligence matters.

Of course, we need to continue to make every effort to develop unilateral intelligence sources on this topic. But in counterterrorism, we will always be, for several geographic, cultural and jurisdictional reasons, more dependent on our foreign partners than with just about any other intelligence topic I can think of.

That is not a weakness, it is something to cultivate and exploit. We need our foreign partners for information. And we need them to carry out most of the arrests, the raids, the confiscations, the interrogations and the renditions that are involved in dismantling terrorist groups. This means that we need to give them the incentives to cooperate, and, if necessary, the assistance in developing the capabilities to do so.

Finally, we should take a broad view of counterterrorism and recognize that how much future terrorism occurs against U.S. interests will depend not only on what is done by people at the CIA or the FBI who have counterterrorism as part of their titles -- counterterrorism involves not only learning the secrets of the next terrorist plot or erecting security measures around what we think is the next terrorist target, it also involves the motivations for groups to use terrorism and the conflicts and conditions that lead some people to join terrorist groups in the first place, even though there will always be some, like Bin Laden, who seem determined to do us harm, regardless of motives or of conditions.

This broad view, obviously, gets into many foreign policy issues that go beyond the scope of this hearing. But the lesson for intelligence is that as more priority is given to particular counterterrorist accounts, we should not denude ourselves of coverage in other areas that not only are important in their own right, but that also bear on possible future terrorism. The intelligence community has an important responsibility not only to go after Al Qaida, or whatever is the current predominant terrorist threat, but to be aware, early on, of future ornasent (ph) terrorist threats -- whatever form those threats might take and whatever ideologies they might espouse and of the conditions that might lead such threats to emerge.

Mr. Chairman, thank you. Those are my remarks.

CHAIRMAN: Thank you very much, Dr. Pillard.

We are now going to go to our normal procedure, minus Senator Rudman, of the designated questioners for today's hearing.

And for the witnesses information, we just basically assign this to different members so that they are well prepared on the matters of the subject of the day.

Representative LaHood is recognized for 18 minutes.

LAHOOD: Thank you, Mr. Chairman. I want to compliment both you and Senator Graham on the way you've conducted these hearings.

And I want to compliment our witnesses on the extraordinary level of integrity and hard work that you have brought to your jobs of public service during the time that you served our country. And we thank you for that.

Judge Freeh, past hearings and interviews of FBI officials suggest that the bureau, while possessing many skilled and dedicated agents and analysts, were unable to coordinate activities against terrorism, in particular, the approach the bureau used against organized crime, deadbeat dads, narcotic traffickers did not translate well in its efforts to fight a global enemy. Individual bureau offices did not appear to coordinate their activities and headquarters often seemed unable to control them. In addition, the FBI's poor communication infrastructure made it difficult for FBI agents to communicate with each other, let alone with other parts of the intelligence community.

Judge, let me just see if I can put it in my own terms. After listening to a lot of testimony, there is a feeling -- and I have this feeling -- that there is a culture in the FBI -- a culture that maybe dates back to Director Hoover all the way through your distinguished tenure as director -- that offices don't communicate with one another -- that agents within offices don't communicate with one another -- that offices don't communicate with Washington D.C. or with higher up officials -- that there is the mindset, if you will, that takes place within the bureau that says, "Hold things close and don't be in touch with local law enforcement and don't be in touch with other offices."

And I have that feeling after listening to a lot of testimony, as a member of this joint intelligence committee. And so, with all due respect to you, sir, I would like to hear your point of view. Is there a culture in the FBI that dates way, way back that trains agents in the idea that you can collect a lot of information, but hold it close and don't share it?

And my idea is that the only way we change that culture, which I believe does exist, is when we recruit 1,000 new agents which the Congress has authorized and we train these people that this idea of holding things close is nonsense -- it's not the way we do our job.

And so I appreciate the chance to have you respond to that kind of -- I don't know if it's criticism, but idea that's been purported around here. And I know you've read it and I know you've heard it. And I want to give you a chance to respond to it this afternoon.

FREEH: Well, I appreciate that very much.

I would answer your question in two parts. With respect to information technology, again, it was in the portion that I didn't read. The FBI, in terms of its IT infrastructure -- its access and ability to use and capacity to do what private industries and many other government agencies have done very well for a long time in organizing data, mining data, communicating data -- we have a very inferior system. And I will take partial responsibility for that, obviously, being there the last eight years, although there's a story there that is pretty well set forth in my statement.

On the other issue, which I think is the more pertinent issue, I would respectfully disagree with that. I say that the notion that the FBI, whether it's working in a counterterrorism matter or a criminal matter, has a culture where information is not shared is incorrect. And I think it's dated.

It is much like the notion that the FBI and the CIA don't speak to each other.

This committee, I think better than any other committee, knows that that's incorrect. There may be a perception out there that the two agencies did not speak to each other, as Mr. Pillar mentioned, maybe that was true, ironically, during the Cold War, when we should have been speaking to each other more. But that is not the case anymore.

The notion that we have a culture that withholds information from our state and local partners is absolutely incorrect. And I would encourage you to speak to the president of the International Association of Chiefs of Police.

We didn't have 34 joint terrorism task forces throughout the United States because the FBI was not in the business of working with and sharing information with our state and local partners. The joint terrorism task force in New York dates back to 1980. It is the template of how the FBI, which at one time in its history, which is why I characterize the perception as dated, did not share information, and, in many cases, was guilty of monopolizing information and not sharing it. But that is a 20-year-old perception, which is not true.

You can talk to police chiefs around the country, and maybe more demonstrably police chiefs around the world. The FBI has a culture and a protocol and a very well established tradition now with respect to sharing information.

And I would encourage you to speak to mayors and chiefs of police and whatnot.

Now, going back...

LAHOOD: With all due respect, Judge, I have talked to local law enforcement people and they have told me that there is a disconnect between local offices.

I agree with you that if you use the Southern District of New York blueprint -- the Rahman blueprint, if you will, where a lot of information was shared, you do get the prosecutions. And there is a lot of information shared.

But how do you explain the Arizona memo? How do you explain the idea that there was information out there that never reached the highest levels of our government? How do you explain that other than people weren't communicating with one another?

FREEH: Well, you're absolutely right. In those particular instances, there was a lack of communication. But you are talking about a culture and a generational gap and hiring new people who understand sharing information. And my response to that is -- that is ignoring what I think is the routine and the operational capability and history of our agency.

We are not an agency -- have not been for the last decade -- that is in the business of monopolizing and securing information that is routinely disseminated and used by our state and local partners.

We have dozens and dozens of Safe Street task forces around the country. Maybe you should ask some of your mayors and police chiefs about that. Every major city has a Safe Street FBI task force -- nothing to do with terrorism. They work cold homicides -- they work hijacking cases and they work with state, local and FBI agents in the same space, under the same leadership.

So what I'm telling you is that there is an absolute misperception if there is a notion that we have a culture where information is not shared.

That wasn't my experience in eight years. It was my experience in 1975 when I was a new agent reporting to the New York City FBI office. And I was told I wasn't allowed to work with the New York Police Department, which was pretty hard when there was 30,000 of them in the city.

But that is a very dated concept and one which is not the reality today.

LAHOOD: Well, with all due respect, I would say this -- I know that there is communication. I know there is Project Exile Task Force and other task force, but on the issue of terrorism -- on the issue of people that are in our country illegally -- people who are here to do in our country, I am not sure that what you're saying really holds true for that aspect of people who are here illegally and want to do in the United States. And I don't think it's been true.

And I don't lay all the blame at the bureau. But certainly Immigration and Naturalization and others probably share responsibility. But when it comes to terrorism and fighting terrorism, with all due respect, Judge, I think there is a disconnect and there was a disconnect. And I have been told by Director Mueller that he is correcting that.

And I don't say that you and Director Tenet didn't communicate. I'm sure you did. I'm sure you had meetings. And I know that Director Mueller and Director Tenet are meeting on a regular basis now.

My point is that there is a feeling out there that this wasn't happening within agency -- between offices.

Let me just see if I can ask another question because my...

FREEH: Well, if I could just respond to that...

LAHOOD: Of course.

FREEH: ... because I think it's very important.

And I, again, commend the chairman for having a public hearing and for you asking this question.

You just gave an example, which I will respond to. You just talked about meetings and communications between the directors -- FBI director and the DCI -- but the agencies are not communicating.

You have to know from your briefings, because I did the briefings myself here. There was a long history, over the last several years, where CIA officers -- FBI agents, together, went around the world exploiting Hezbollah cells -- Al Qaida cells. The agent being present so chains of custody could be maintained -- so Mary Jo White's prosecutors could use the evidence -- and the agency officers present for covert action and intelligence.

You can't understand that reality and defend or support a misperception that these agencies weren't working together.

LAHOOD: How do you explain the Arizona memo, then, Judge?

FREEH: Well, we can take a single bit of information -- we could take the Phoenix memo -- we could take other pieces of information -- I'm not saying that there weren't gaps or disconnects. I'm not saying that information about two of the hijackers in 2000 didn't make the intersection that it should have made but, you know, we can talk about particulars, or we can talk about the reality of how these are actually being done. And I think it's constructive to talk about both, but not one in isolation to the other.

LAHOOD: Let me -- you and I disagree on this. And I think we've heard an awful lot of information. And I go back to what I said, if you use the, you know, the southern New York district blueprint, it's a good print, because I think a lot of communication took place not withstanding all the obstacles that the former U.S. attorney mentioned. And I think there have been task force on some issues, but not on terrorism in this country. And I'm sure there are people who travel all over the world and try to find terrorist groups, but I'm sure that was happening here. And I'm not sure the communication was really going on here. And I do think this needs to change.

Director Tenet declared in December 1998 that we are at war with Osama bin Laden. Was the FBI on war footing with Al Qaida prior to September 11, 2001?

FREEH: Absolutely.

In 1999, not only had we indicted Osama bin Laden twice, he was on our top ten list. Al Qaida was a number one priority. We had a dedicated unit. We had an alex (ph) station that was set up with the CIA to work exclusively on those cases. We were indicting people. We were bringing them back to the United States. We were convicting them. We were exploiting intelligence with the agency officers all over the world. There's no question in my mind that that was a number one priority.

LAHOOD: Ms. White, do you agree at all with my notion that I have stipulated here about the idea that there is a culture within law enforcement at the highest levels not to share. I know it didn't happen in the southern district. I know that, but you've been around. And you've -- I'm just curious what your idea about this is.

WHITE: No, I'd essentially agree with Director Freeh about that. I mean, I think that, again, you know, 25 years ago I certainly think that was true. I think particularly between federal agencies generally, and local agencies, police departments generally, and some of your more veteran police officers kind of harkened back to that.

I mean, one thing that happened, even in New York where I think the relationships are extraordinary between the FBI and the local authorities, but once 9/11 happened, even there where the communication was excellent, the conclusion was reached -- the erroneous conclusion was there must have been something not shared. I mean, you heard that everywhere. And my response to that, in talking to the police officers was, you know, would -- would that there was something to have shared. I mean, it wasn't an absence of sharing, so I think I do agree with that.

I think there is a -- I mean, my own perception of if there's a communication barrier, and this doesn't just apply to the FBI. And it's not cultural, really, but one must do better, I think, in all the agencies between the field and headquarters. I mean, I think there are some barriers there. There are also some barriers built in by what I talked about this morning between the intelligence side and the law enforcement side, but I -- but I think a lot of the perception, particularly the local agencies is really a dated one, as Director Freeh said.

LAHOOD: Well, I will just tell you this, Judge and Ms. White, we went to New York as part of a subcommittee and we heard testimony from the police commissioner and the mayor there, Mayor Giuliani when he was mayor. And also this committee has heard from the chief of police of Baltimore.

It's not really in sync with what you're saying. And I wouldn't be raising this issue if it hadn't been raised here. I'm not trying to raise it to embarrass anyone. I'm not trying to raise it to certainly embarrass you, because you have a distinguished record, Judge, but I do think there is a feeling out there that the culture has to change. And information does have to be shared, and that, perhaps, it wasn't to the -- on the terrorism stuff. Not on some of these other issues. I know there are task forces on other -- on drugs, on exile, and I know that the offices are working closely with the local police departments on these things.

And my son is an Assistant U.S. Attorney in Las Vegas, and he's on a task force that works with the local police on rounding up people who use guns illegally. So I know, but I'm talking about on the terrorism stuff. And, you know, during the time that you were director.

And so obviously we have a disagreement on this, and so, I guess we'll have to -- what was the process by which supervisors and special agents in charge were held accountability for adhering to investigative priorities set forth by headquarters?

FREEH: Well, we have the -- we have an inspection process which is separate and apart from the administration of the individual programs such as terrorism and organized crime and white collar crime. Each of our offices, 56 main divisions, are inspected, usually about once a year, every 18 months. And a team of those inspectors, who come from a non-operational division, review the implementation of the strategic plan with respect to all the component programs. And if a plan is not being performed in the office, if the U.S. attorney is complaining, if our state and local partners who are all interviewed during the inspection, raise the very issue that you've raised with me, we take action against whoever needs to be acted against, whether it be a supervisor or a program manager or an FAC (ph).

Separate and apart from the inspection process, there is the individual program management. Dale Watson, who you know, who's testified here, was responsible for the counter-terrorism programs, and had individual supervisors in the 56 offices who were accountable to him for the administration of the plan, the working of cases, and all the other implementation. So it's sort of a dual process.

And then over and above that, of course, is the Department of Justice review, inspector general reviews, oversight by the committee, budgetary reviews, and other layers.

LAHOOD: Do special agents in the field enjoy too much autonomy?

FREEH: Not in my view they don't. In fact, they're accountable every day; not only to their supervisors, but one of the benefits of a law enforcement agency in a democracy is they are accountable to courts, to judges, to juries, to defense attorneys, to the media. They have absolute transparency, particularly as a case is developed and moved along in the trial process, which is one of the strengths of our agency that, you know, we have this accountability. It also means that our mistakes are always public, which is actually a good thing for an agency with the power of the FBI.

LAHOOD: I would like each of you to comment, if you would, on the notion of a blue ribbon commission to look into what happened to 9/11, and to make recommendations, if you would please. This is my last question because the yellow light is on, but I would appreciate any comments. If you don't feel compelled, I understand, but I know that each of you have been involved in these matters, and if each of you would comment.

And if you'd like to go first, Mr. Pillar, and then Judge Freeh, and then Ms. White. Thank you very much for being here too.

PILLAR: I would welcome the thought of a blue ribbon commission simply because the whole problem of counterterrorism goes far beyond intelligence or even beyond intelligence and law enforcement. And there are a host of other things to get into, foreign policy, national allocation of resources that I think a commission with a broad view would be appropriately equipped to address.

FREEH: Yes, I would agree with that. I think Senator Rudman's remarks and obviously some of the questions and commentary about the, you know, the organization of the congressional committees with respect to oversight is an important issue. And that's probably better looked at, at least in the first go around, by an independent commission.

WHITE: I would strongly favor an independent commission, and one's that permanent, frankly. I think this subject of international terrorism and homeland security, is not only the most vital subject that have, but one that's extraordinarily complicated that I think can't be done in the short run. I think it is -- I think there should be one. I think it should be a permanent, independent commission.

LAHOOD: Thank you very much.

Thank you, Mr. Chairman

CHAIRMAN: Senator Feinstein?

FEINSTEIN: Thanks very much. Thanks, Mr. Chairman.

Director Freeh, I just want to thank you for your service to the FBI and to the country. And you certainly made a very precise and spirited defense of the agency. And I know there are a lot of people that appreciate it.

Ms. White, I want to thank you for your service. I think you've run one of the foremost U.S. Attorney's Office, or did run, in the country. And thank you for those very successful prosecutions.

And Mr. Pillar, I just want to say that your views, for me, are having greatly increased value. The more I listen to you, the more I see the depths of your knowledge. So I thought it might be a nice thing to say that.

Ms. White, let me -- let me begin with you on FISA, because it's been a, kind of, ongoing interest for me. And that subject is the law. And as you know, we're still awaiting and appellate decision from the FISA court, but in the PATRIOT Act, we changed the standard for FISA from a primary purpose, must be foreign intelligence, and added the word, "significant purpose." And now the recommendation of the attorney general is essentially to even break that down further.

What are your views? Do you believe that "significant purpose" is substantial to overcome and breakdown, as you described, that wall to be?

WHITE: I would have thought so until the FISA court decision. In fact, as I think I mentioned this morning, I was...

FEINSTEIN: Right.

WHITE: ... instrumental in making the recommendations in both directions to get the walls down. And I think there's no question that the primary purpose test, which I guess was engrafted actually by courts prior to the USA PATRIOT Act to some extent, did retard, I think, seeking FISA applications out of a concern to defend, you know, that record. That indeed, if there was a criminal prosecution and you had to defend the FISA wire, that you wouldn't be very careful and very conservative about that.

I think too conservative. I think the Justice Department was too conservative in some ways, but there's not question that the primary purpose test was a cause of a lot of that. I would have thought the change to a "significant purpose" would have been sufficient, but I doubt that now given the decision.

FEINSTEIN: So, well, this is another day, but I would certainly, if you have a recommendation there, we may revisit this subject in the future. I'd certainly...

WHITE: I'd be happy...

FEINSTEIN: ... very much...

WHITE: ... to give it to you.

FEINSTEIN: ... like to have it.

Mr. Freeh, if I might, in reading through Dr. Hoffman's written report here; he's Vice-President of the Rand Corporation. He points out, and this was interesting, that really not until 1980, as a result of repercussions from the revolution in Iran, do the first modern, religious terrorist groups appear. And they amounted that year to two of 64 groups that were active during the year. Twelve years later, the number of religious terrorist groups had increased nearly six fold, representing a quarter of the terrorist organizations who carried out attacks in 1992.

Significantly, he says, this trend has not only continued, but it has accelerated. By 1994, a third of the 49 identifiable terrorist groups could be classified as religious in character and motivation. In '95, their number increased yet again to account for nearly one- half of the 56 known terrorist groups active that year. And then he points out the higher levels of lethality of religious terrorism.

Now my question ties in with that because I think, for a law enforcement agency, that even makes the intelligence gathering much more difficult. Agent that I have talked to, when I have had a chance to, sort of, talk to them informally; have said that most of their work surrounds the opening of a case, rather than pure intelligence gathering. If you add to that the religious overtones of this, it seems to me it makes the gathering of intelligence, its dissemination -- its collection and dissemination to a variety of sources, even more difficult. And if you lay over that the, sort of, the culture of the FBI, which is primarily law enforcement, how then can you really carry out where we have to go which surrounds religious fundamentalism that's lent itself to very lethal terrorism? How do you collect that from a law enforcement agency subject to the law and the strictures that an FBI is subject to?

FREEH: Ms. Feinstein, that is an excellent question. I don't think it's so much a question of the culture of the FBI or the complexity of the test, admittedly which is the obstacle. I think it's a combination of resources, legal authorities. You've discussed some with Ms. Mary Jo White.

You know, the FBI for decades was very effective. I think extremely effective in working counterintelligence matters during the Cold War and during World War II when there wasn't a CIA.

FREEH: The FBI was stationed, as you know, all over the world in South American, performing the collection and disruption functions that the agency took over when the National Security Act of 1947 was passed.

So I think although we're a law enforcement agency, we have a very long tradition. You heard Senator Rudman this morning. The collection ability is there and it shouldn't be displaced to some new entity without the history or transparency when it's necessary that the FBI has in that regard.

But your question, and Professor Hoffman's point, is an excellent one. The complexity here is overwhelming. And I think that's one of the misunderstandings of Al Qaida, not in this committee, but around the world. You know, Al Qaida is a facilitator. It's not just an organization. The people who train in the Al Qaida camps -- who are trained in the Al Qaida camps in Afghanistan, like Rassam (ph), who was not an Al Qaida member, but was trained by them, will tell you that, you know, the class that was reporting that week for training became a cell facilitated by a global Al Qaida network, but not an Al Qaida organization, per say, which is why when you say that, you know, there is not a focus on the Al Qaida organization. Well, the Al Qaida organization is potentially 10 to 25,000 Afghan war veterans who are all over the world.

So I think in response to your question, the complexity here is enormous, but it's not beyond the capacity of resources and focus and legal authority to address. But it certainly can't be addressed with the current resources.

FEINSTEIN: In your written remarks and your verbal remarks, you say, "The direct evidence obtained strongly indicated that the '96 bombing," this is Khobar, "was funded and directed by senior officials of the government of Iran. The Ministry of Intelligence and Security, and Iranian Revolutionary Guard corps where shown to be culpable for carrying out the operation. The bombers were trained by Iranians in the Bekaa Valley. Unfortunately the indicted subjects who are not in custody remain fugitives, some of whom are believed to be in Iran."

I also read The New Yorker article. Now this places us in a very unique situation with respect to the debate that's currently going on over Iraq. Here is a direct government connection to a terrorist attack that our premiere law enforcement agency has discovered. To whom did you relay this information? And what did you ask to do about it? I mean, what did you ask them or say to them that you wanted to do to carry out arrests or activities or what advice did you provide?

FREEH: Well, first of all, all that information, as we received it, which was the product of interviews, direct interviews by FBI agents, was immediately reported to the attorney general, the national security adviser, this committee. I think I was a few days after that briefing when I came here and to the chairman and the vice-chairman, in a very secure fashion, gave them that exact information.

With respect to what I asked for or recommended, the only objective that I had, because my instruction was to make that case and work that case and leave no stone unturned, which is what I tried to do, was to identify and indict and then tried to have apprehended any and all people who were responsible for that bombing. So that was my objective and that was my recommendation.

FEINSTEIN: And just leave it at that? Take no other stronger actions with respect to Iran?

FREEH: No, I would not have made that recommendation. That's not the place of the FBI director, nor was that our tasking. Our tasking was to work the case, find the evidence, indict who could be indicted and find who could be found. And that's what we did.

FEINSTEIN: In The New Yorker article, a conflict was related between you and the administration over the bombing. Did you in fact believe that you didn't get the support you needed?

FREEH: Well, we got an indictment. And we got there, after five years; we got there by a lot of hard work, by developing relationships, by making requests for assistance, which ultimately were granted. Was it a perfect scenario? Was it one conducted without frustration? No, but I measure the success by the result which was the indictment that was returned.

FEINSTEIN: The inspector general, in a recently released audit of the FBI's counterterrorism program, pointed out that the FBI never provided a comprehensive written report on the training, the skill level, the likely hood of attack, or other basic characteristics of the terrorist threat to the United States. Why was that?

FREEH: My understanding is that there was a draft threat assessment, which was done before September 11. We also participated in a five-year study and recommendation, which the attorney general had organized. The threat assessment apparently was not as specific as the GAO inspectors wanted it, but there was, as I understand it, a draft threat assessment which was completed before September 11.

FEINSTEIN: Is that -- is that available to us? Well, I'm sure it is.

FREEH: I guess I'm the wrong person to ask, but...

FEINSTEIN: Right, but it'd be interesting to find out.

FREEH: I think that's noted in the GAO report, actually.

FEINSTEIN: After DCI Tenet, whom you commend, and of course we do as well, declared war on Al Qaida in December 1998, at any time after that, did the White House or anyone inform you that Al Qaida was a tier zero target?

FREEH: No. I mean, not that I recall, but, I mean, everybody in the White House, and certainly everybody in the FBI, by December of 1998, had focused on Al Qaida as the primary target. I don't -- that terminology that you used, Senator, I apologize, I don't recognize it.

FEINSTEIN: Of the highest, well, you...

FREEH: Yes, it was our number one priority. I mean, by the time DCI Tenet declared war, Mary Jo White had already indicted bin Laden two times. There was no question in anybody's mind working that program that he and Al Qaida were the number one priority.

FEINSTEIN: You have some recommendations in your written report. Based on your rather considerable experience with these terrorist bombings, in terms of turning the FBI -- not turning it, but encouraging it intelligence gathering and the communication of intelligence, its dissemination to other intelligence agencies, what do you believe is the signal most -- single most important thing that could be done? Because, the comments that we received is that the FBI doesn't turn over intelligence. We've heard that, at least I have, from the NSA. We've heard it from the CIA. Other than putting details, which has been the case, to work in CTC (ph), which is one way of doing it, how do you break down that -- I don't want to use the word culture, but that's the word that's been used to define it.

FREEH: Yes.

FEINSTEIN: What's the single most important that you would recommend be done?

FREEH: I think there's a couple things. And I don't subscribe to the characterization culture. It's a generality...

FEINSTEIN: I understand that.

FREEH: ... that to me that doesn't have any relevance, but I think you do it a number of ways. You do it by a top-down decision, and implementation of the kinds of sharing initiatives and motivations and opportunities that existed. We brought a succession of senior CIA officers, as you know, over to the FBI. And senior FBI agents went over to run the counterterrorism center as a deputy on numerous occasions. The notion there was a simple one, that not only would we have an exchange of officers, but the CIA officers who came to the bureau had line authority and the counterterrorism unit. That's one way.

The other way I recommended in my recommendations, interoperability of databases. We don't have that. Not just between the FBI and the CIA, but around the government. It is a hugely expensive, but not technically complex solution to most of the problems that we've been talking about and that you've been hearing about in this committee, gaps and lapses in little facts and bits of information going where they need to go quickly and efficiently. We don't have that.

Obviously, resources, statutory authority, the PATRIOT Act goes a long way in breaking down the wall that you and Ms. White were talking about a moment ago. You know, changing the domestic guidelines and the FCI (ph) guidelines lines, which are now being changed by which the agents in the field have operated for many, many years with respect to opening investigations, using sensitive techniques, et cetera.

So I don't think there's one single thing. Although, the interoperability of data...

FEINSTEIN: Right.

FREEH: ... which almost guarantees participation and exchange, because of the momentum of that technology would really be critical.

FEINSTEIN: Encryption, which is something that I was interested in. And I recall that you met in my office with some of the CEOs of the major computer firms on this issue. I was under the impression that agreements had been worked out with respect to the key issue. And that the problem was somewhat solved. Is that the case today or is it not the case?

FREEH: No, that is not the case. And I will give you more credit than just participated in the meeting; you set the meeting up with the senior CEOs in the industry and pursued that.

We have, right now, some very important and very successful voluntary arrangements and exchanges with industry which go a long way to solving the problem. The problem, however, is not solved. There is absolutely no legal authority for your law enforcement officers to retrieve, with a court order in hand, the plain text of a terrorist or someone else in a intercepted communication or in some stored data.

They fixed this in the U.K. The Parliament passed the statute. We tried here, as you know, many, many years.

Chairman Goss, I can't praise you enough for your leadership in your industry, Norm Dicks, whose not here.

We got absolutely no support anyplace in the government, quite frankly, either down the street or up here. It is the single greatest vulnerability to our technical capacity to prevent terrorism. And it is unaddressed in the PATRIOT Act. It is not being addressed any place else. It is mind-boggling that with the political atmosphere and momentum we have to fight this war that we can't fix this.

FEINSTEIN: My time is up. Thank you very much. Thank you, Mr. Freeh. Thank you.

CHAIRMAN: Thank you.

Mr. Roemer?

ROEMER: Thank you, Mr. Chairman. I want to just thank you and Senator Graham and the ranking members of this committee for your leadership and your long hours of work to lead this committee, I think, in a proper and helpful direction to better understand not only what happened on September 11, the horror of that event, but also to try to better understand back through the previous seven or eight or nine years, starting with the bombing in 1993 of the World Trade Center, what kind of enemy we're up against, what kind of successes we've had. And certainly the people at this table have had considerable successes, but also I think what kind of mistakes or failures or disconnects or gaps are in the system and still existing in the system so that we can go forward and fix the problems.

I'm hopeful that these hearings are not about finger-pointing, and blame games, and seeking to pin the tail on somebody, or even as Judge Freeh talked about, a smoking gun. I think we're talking more about what kinds of mistakes, and gaps, and cracks are in the system that allowed these snakes to crawl through and terrorize our people, inflict incredible damage and kill over 3,000 people.

Ms. White, I'd like to start with you, because of, you know, some of the things I've read about your successes. You dusted off about a 140-year-old law that hadn't been used since the Civil War to go after terrorists. You took a very creative approach. You called it, or it was called the Law of Seditious Conspiracy to go after enemies of the United States, and to increase penalties from five to 20 and 30 years if you could successfully prosecute them.

You also said in your testimony that you realized in 1993, you were up against, and I'll quote, "a long-term, highly dangerous enemy."

ROEMER: It wasn't something that was a freak accident in 1993. You then sought to share with other federal law enforcement agencies and intelligence community information beyond sharing, I think we're talking about true collaboration and implementation. I'm tired of hearing the word sharing. Sharing, too often times around here, means you bucked it over to somebody else and nothing was done with it.

So I'd like to know, you know, fairly succinctly if you can, to get the conversation started, what kinds of formal mechanisms and informal mechanisms did you put in place to get this cooperation, to work successfully on these series of cases through the '90s, to prosecute, but also to look back, to compile this information on Al Qaida and to start to put together the pieces that we knew we were in for a long fight and try to help must us preventive rather than reactive?

WHITE: Well, to some extent it happened initially by happenstance. The Trade Center, you know, was bombed in 1993 in, you know, our district. And as I think I said in my testimony, it's in my written statement, because of the day of terror plot, which really was as the same time, but I call it the follow-on plot, and what we learned through that, that's what convinced me and others in my office working on these matters and the FBI working with us, obviously, just, yes, it's long-term. It's a dangerous risk.

And, you know, and from there we did make the decision that we didn't want to lose that information. We knew what we didn't know too. We didn't know, you know, nearly as much as there was to know. We knew the risk was there. We knew the danger was high. And then we proceeded in a terrific working relationship with the FBI and the CIA, you know, throughout the years, eventually culminating in the joint efforts of the bureau and the CIA on bin Laden and Al Qaida that we've all talked about, culminating in, you know, his indictment by our office in -- before he'd attacked anyone really, in June of 1998.

But it's a long-term process. You learn more every day. And to me, the key is, you know, getting the information in one spot where it's -- not one spot, but in an integrated place at least, where it's understood and can be acted upon.

I mean, what in, you know -- one barrier that I didn't mention, I'd like to and then I'll be quiet here is, you know, the difficulty of language in dealing with terrorism. I mean, I know you've heard a lot about that and there aren't enough interpreters. Well, that is a huge, huge problem. You can have every FISA application in the world approved, but if you don't know what your reel of tape says, and we ran into that...

ROEMER: We're translating the other times.

WHITE: Well, and it's not just, you know, Arabic, but it's an obscure dialect of Urdu or Arabic. And there aren't very many people in the world, certainly with the security clearance, that can understand accurately what you have.

So to me, going forward, the more we can do to understand we have, you know, real time and then share it real time, but we're a long way from that.

ROEMER: I appreciate your comments about language. We're trying to work on that very area in our intelligence authorization bill.

Now, Ms. White, you must of at times, as the blind sheik case and the Manila plot and the bombings of the embassy, and so all these things are coming down on you. Did you ever say you were overwhelmed even though you thought you had pretty good communication set up with other agencies? Did you ever say, "We're not going to get it done this way. We need more cooperation with the intelligence. We need military help to go after the sanctuaries. This is not going to do the trick. We've got to take this higher."?

WHITE: The cases we got extraordinary cooperation on. They were exceedingly difficult. And I think the -- so the success rate masks how difficult they were, but the cooperation we got from the bureau and the intelligence community was extraordinary. But again, as you've heard us say this morning, and certainly it was view, that we weren't just -- when we could act to neutralize, we did, to the criminal prosecutions and investigations.

But this is a much bigger problem. This, in my mind, very early on was a problem for the military. And we're talking about a world- wide...

ROEMER: Did you ever bring that up? Did you ever go to anybody and say, "I'm overwhelmed. We're not going to get this done through the prosecuting cases. We're not going to even get this done through good collaboration. This is a lot bigger for this district and for the country than this."?

WHITE: Well, again, overwhelmed -- not overwhelmed in the cases, as difficult as they were, but I certainly expressed...

(CROSSTALK)

WHITE: ... to, you know, the officials of the Justice Department. Director Freeh and I discussed it. I mean, this was, you know, it was quite clear, but again, I go back to what I said this morning. You know, I was not under the impression that prosecutions were our counterterrorism strategy. I still am not. I mean, there was, even from my vantage point, a lot of other things going on. Not the military effort, obviously, we had after September 11, which I would have liked to have seen as a personal matter after the East African Embassy bombings. But, in fairness...

ROEMER: When...

WHITE: Yes.

ROEMER: When you, Ms. White, would press this and be concerned to other people, whether it was Director Freeh at the time, or whether it was somebody in Justice, did they every get back to you and say, "We brought it up with such-and-such. And we received a good response or a poor response on that."?

WHITE: Again, I think the response was, you know, everything is under discussion. And I did think our government, again, I know...

ROEMER: (inaudible) clearly military.

WHITE: ... under discussion, but again, I know what I know. And I don't know what I don't know. I didn't interface with the Department of Defense or the White House or the NSA. I mean, that was not, you know, I interfaced with the attorney general, Director Freeh, that's as high -- Director Tenet from time to time. That's as high as my pay grade went, in a sense.

But, even from that vantage point, it was definitely my impression that our government as a whole was taking this threat very seriously and thinking comprehensively about what to do about it, other than by way of prosecutions. But I was not in that direct loop.

ROEMER: And isn't there a sense of, you know, frustration and irony that will all this work, with one of the most effective collaborative efforts we have in the southern district, that they come back to New York and successfully strike again?

WHITE: Well, I mean, I think coming back to New York, as horrible as that was and would have ever been, was not something that we didn't expect to happen. I mean, I think, you know, the Trade Center was obviously it's a, you know, was a symbol of our economy, our capitalist economy. Al Qaida, in particular, is into symbolic targets of our system. New York and Washington, obviously, are, you know, right up on that list and always have been.

So it, you know, as tragic and horrific as it was, and it was, and it is, it did not come as a surprise that they came back to New York. I think all of us thought it was a matter, whether it be New York or somewhere else, but certainly including New York, there was going to be another attack.

ROEMER: You were not surprised that it came back?

WHITE: No, no.

ROEMER: Judge Freeh, let me read, I think, some testimony from you from the House subcommittee in 1995. Everybody talks about when George Tenet declared war on Al Qaida in 1998. You said this is back -- as far back as 1995. Quote, "I'm greatly concerned about terrorist attacks here on American soil. The effort, as in Oklahoma City, will be to murder as many as possible through a single blow," unquote. Is that accurate? Is that your quote?

FREEH: Yes. I mean...

ROEMER: So back in 1995, six years before they successfully come after the World Trade Center for the second time, you're predicting that they do this.

Now, after the 1998 Africa Embassy bombings, there are some 200 FBI counterterrorism cases that are opened after that bombing. Can you quickly tell me -- how do you communicate with and follow up on these kinds of domestic cases? To try to, not overseas, we know you did your best on the Khobar and you followed through on some of these things. What are you thinking? And what are you trying to pursue domestically then at that case in this particular, specific area?

FREEH: No, I'm pleased to answer the question on two levels. One, the 1995 statement, speaking for itself, but of course that's, as you've heard here several times repeated today, that's a description of the 1993 World Trade Tower bombing, where the plan was to, as mentioned by my colleague here, destroy two towers. In fact, Yousef told us after the event that they also wanted to lace the fertilizer bomb with chemical agents so they could kill thousands, but didn't have enough money to complete the plan.

But that brings me back to my earlier point. We were intensely focused on the domestic threat here in the United States. And the notion that we were fighting terrorism overseas and consumed overseas is absolutely inconsistent with our experience in that reality.

Now, the 200 cases; cases are opened upon leads, credible information whether they come from informants or electronic surveillance. If you notice, hundreds and hundreds of cases are being opened in the United States on the basis of information and leads which have been exploited in Afghanistan, a very important source of leads with respect to potential terrorists inside the United States. So that's where those cases generated from.

How are they monitored? They're monitored like any other case that we're responsible for which is of significance. Cases come in different forms. In July of 2000, we indicted a group of people in Charlotte, North Carolina. You may not have noticed the press release because they were being charged with cigarette smuggling, but they were radical, Islamic fundamentalists who we believe were terrorists. And we couldn't make a terrorists case on them, but we could make a cigarette smuggling case on them. So the cases are worked like any other case, but you need leads to generate them. You need credible information even uncorroborated to start that process.

And the explosion of cases that you see now, many of them are because FBI agents in Pakistan and Afghanistan, working with their colleagues, are finding hard drives and images which are leading to identification of terrorists within the United States.

ROEMER: Judge, as hard working as you are, as prescient as you were, saying this is going to happen back as far as 1995, and as honest as you are, I admire you personally and professionally. But don't you feel at some point, with all this going on in the world, and your frustration in communicating -- you just talked about how frustrating your technology was with 56 field offices. How do you follow up with that kind of 20 or 30-year-old technology and communications systems with 200 counterterrorism cases that are open in the field? I mean, this has to be extremely frustrating for you at the top of this pyramid.

FREEH: Yes, extremely frustrating. As I said in my opening statement, you know, we're on our way to fix that and it's not rocket science, it's desktops, it's servers, it's networks, it's things that, for the most part, you can buy off the shelf and then may be modified for security reasons. We didn't have that technology. We tried to get it.

As I said before, I take responsibility for not getting it all when we needed it most, but it's not like...

ROEMER: You think it's -- is it getting there now?

FREEH: Well, trilogy now has been funded for part two. And since September 11, the Congress have given several hundreds of millions of dollars for this technology. So we're well on our way to doing that.

Could we have used it before? Absolutely. Could we better work with 200 hundred cases? No question about it. We've worked cases for the last 94 years. When I was an agent, I used to keep my data on an index card. We can still work the cases, but you can't deal with a global organization that uses the Internet and hawalla finance transactions and has, as I mentioned before, not an organization, but a, you know, a pan-national collaborative membership with index cards.

ROEMER: But if your field agents are working off index cards and not collaborating and sharing information through a database about information collected in Phoenix or Oklahoma City or Minneapolis with respect to people from the Middle East training in schools for pilots; I mean, you cannot run a modern system with that kind of antiquated communications, right?

FREEH: No, it cannot be done.

ROEMER: So how could we have done this? How could we have coordinated these counterterrorism cases at this point with this kind of old system, index cards and legal files sitting in a file case back in the office in Phoenix?

FREEH: Well, the fact of the matter is, we made some extraordinary cases, and as Ms. White mentioned, prevented major acts of terrorism in 1993 when we had maybe not as antiquated a system, vis-a-vis the 2001, but still a sub-par and not state of the art system.

So, I'm not saying we couldn't make any cases. In answer to your question about the 200 cases, we could do them better and we could coordinate all these bits and pieces much better than we've done with better technology.

ROEMER: You have said a couple times that you had an excellent relationship with Director Tenet. To what extent, Judge, was your work with an agency, such as the NSA, to pinpoint sources of communication in the U.S. which were directed at known radicals abroad? Did you have a good relationship with General Minihan and then General Hayden? How often did you meet with them? Did you work with the NSA to go after known radicals?

FREEH: Yes, we had, I mean, we had personal excellent relationships. We had agency relationships. They were present in the counterterrorism center, not just at the agency, but at the FBI. There was exchanges of information, not the exchanges of officers to the extent that there was with the CIA. But, you know, their dissemination to us under whatever circumstances they could disseminate, was clearly not as expansive as the flow of information coming from the agency. But we had good personal relationships at the top. I'll think they'll confirm that. And we had agency relationships, although not as extensive as the ones with the CIA.

ROEMER: And how do we try to improve, as quickly as we can, the relationship between the FBI and the CIA, not with information sharing, not with, you know, sitting down in a meeting simply talking to one another, but the collaboration, the follow up, the implementation? How would you suggest that given that you say you had a good relationship with the current director? What would be your two or three pieces of advice to Mr. Tenet and Mr. Mueller to get that relationship off to a very good start? And how do we improve that in the future?

FREEH: Well, I think the interoperability of our data is probably critical, as I alluded to before. Having that infrastructure dynamic would actually start driving some of the personal relationships, because the data would be transparent and readily exchangeable and viewable. That's the first thing.

The interoperability of our agents and officers overseas; for the first time in the history of the agency, Mr. Tenet and I had our legats meet with our station chiefs all over the world, overseas as well as back here in the United States. That was complimented by the officer exchange at headquarters that I mentioned.

The cases that were worked in New York, again, we have dedicated FBI, CIA teams working overseas, exploiting information, conducting counterterrorism operations for intelligence purposes and simultaneously obtaining evidence, maintaining chains of custody and using it in evidence. That's the kind of collaboration that goes well beyond the two directors sitting down and having an excellent relationship, which they did and do have at this time.

So those would be my top three.

ROEMER: I want to thank the panel, again, for their work in the past on terrorism.

And Mr. Chairman, thank you for the time today.

CHAIRMAN: Thank you, Mr. Roemer.

Senator Roberts?

ROBERTS: Thank you, Mr. Chairman. Inside the joint investigative staff briefing book cover, we find the topic of today's hearings, "I", "E", lessons learned. And I'm talking about the '93 World Trade Center, the '96 bombing of the Khobar Towers, the '98 attacks on our embassies, '99 the plan attack during the millennium, and the 2000 attack on the USS Cole.

I think the attack on the USS Cole is really a microcosm of the challenges we face in regards to 9/11. And I'm pleased to announce the intelligence committee's findings of a week ago, in regards to our findings and recommendations in reference to the Cole. Finding number one, the Central -- pardon me -- the Central Intelligence Agency, the National Security Agency, aggressively collected and promptly disseminated raw intelligence pertaining to potential terrorist threats, although the intelligence community analysts in Washington often had access to intelligence available on the global terrorist activities, they did not always enhance their products with historical information. As a result, the field operators and analysts, with limited resources to apply to historic research, were often left with that task. The process was further hampered by limitations on intelligence sharing. There's a lot of changes, I'm paraphrasing here, in the intelligence community, but the lack of historical context for terrorist threat products and failure to abide by warning guidelines is a problem. Finding three intelligence available prior to the attack on the Cole was not provided to consumers in a formal learning product prepared and issued by the interagency intelligence committee on terrorism.

We have some recommendations where we asked the DCI to report back to us, basically with a detailed description of the steps the intelligence community is taking to increase the analytical depth on the terrorist target. Second, to revise the existing procedures and standards for issuing any formal intelligence committee warning products; that system should include a streamline interagency coordinated -- pardon me -- a streamline interagency and coordination process, clear and concise standards for issuing warnings in a system of threat reinings with the consumer incorporating such factors as the immediacy, the significance and the reliability of the threat.

Now, note all the way through this, and the reason I went to the length of reading that is that we keep coming back to the bottom line in regards to the Cole, any of these lessons learned, and this whole investigation, and that is the need for better analytical ability, and a better predictive warning, I guess, analysis. So put another way, with all due respect to my colleagues, I don't think many of us have had an opportunity to meet or visit with or learn from a real, live, experienced, regular analyst or understand what it is they really do. It's a lot like when you leave your car in the garage and the mechanic that you never see. The manager and the customer relations guy takes your car. He makes you feel good, but the mechanic does the work.

Well, we have such a witness, Mr. Kie Fallis. And Kie, if you would take the end of the witness table, I would appreciate it. Mr. Fallis is a former army interrogator. He is fluent in Farsi. He's an Iran specialist. He spent one year with the FBI investigating the Khobar Towers situation. He is an expert in recognizing the computer software analytical capability and workable databases. Using his background and training and ability, Mr. Fallis provided what has been labeled a Osama bin Laden blueprint of various methods and connections. And the result, the same terrorists who planned the previous attacks were also planning the next attacks.

He received the distinguished performance rating from the DIA in July of 2000. Mr. Fallis then tracked the Al Qaida for a year, linked them to Iranian intelligence and terrorist cells. In January of 2000, he predicted two or three major attacks against the United States. He noted that the broadcast by UBL are followed by attacks. He made the connection to Iran. And that connection resulted in the infamous 2000 Malaysia meeting of the Al Qaida, some fellow by the name of Mihdhar, and some fellow by the name of Hazmi. Those linked to the Cole attack and later also 9/11.

He attempted in vain -- in vain, to convince his superiors to issue a threat warning in August of 2000. Mr. Fallis basically analyzed two warning streams of intelligence reporting, the Al Qaida and Iran, and tried to get his draft warning approved. His warnings were considered -- I think they were called anomalies, not connections. And we now know different. The NSA issued the warning the day after the attack.

Mr. Fallis, acting out of conscience, sighting significant, very different analytical differences, then resigned the day after the Cole attack. Upon request, he did provide this committee and the armed services committee valuable insight and suggestions at the time of the Cole investigation. He is now an intelligence consultant.

I would like to bring to the attention of my colleagues a book called Breakdown by Bill Gertz, a local and respected reporter. On pages 31 to 59, you can have the saga in regards to Kie Fallis and what we should have learned.

Mr. Fallis has prepared testimony today sighting three notable differences between various analysts in the intelligence community and several recommendations on behalf of all the hard-working analysts who, in his words, represent the lynchpin of our nation's ability to predict all future events and to warn the policy makers of important and very crucial developments in the world.

Mr. Fallis, please feel free to summarize your statement. And I have just a couple of questions following that if we have time.

FALLIS: Thank you, Senator Roberts.

Mr. Chairman, members of these committees, I'd like to tell that it's a great honor for me to come before you today to have a discussion about the subject at hand. And I would also like to say that it's a great honor for me to be a part of this group of distinguished Americans at the table here, as well.

That said, my comments today will be strictly from the perspective of a former terrorism analysts, employed at the Central Intelligence Agency. What I'd like to do is to briefly summarize my written statement. And I want to move, sort of immediately, to this part on terrorism analytical issues complicating improved future performance.

The single most important issue that will affect future performance is the experience out of the analysts. While this certainly applies to all intelligence analysts regardless of subject area, it is even more critical for those trying to prevent the next terrorist attack. In the case of an analyst responsible for tracking a Middle Eastern terrorist group, this person will need to be -- will need to have an expertise or at least a good working knowledge of terrorism itself, the group that they have for an account, regional and country issues present in the group's operating area, which can be quite extensive, and Islamic history, culture and the sex there of.

This sort of required level of expertise is rarely going to be found outside the intelligence community and is instead going to be recruited from academia and then developed in-house through training programs and mentors.

Coupled with this issue of experience comes the ability to place current intelligence reporting in the context of historical perspectives. In the period leading up to the 1998 East Africa bombings, and the 2000 attack against USS Cole in Yemen, terrorism analysts, nearly across the board, incorrectly assessed that a group would not conduct an attack in an area where it was able to operate with relative ease. Additionally, there appears to be a continued reluctance to correctly assess and evaluate the nature of cooperation between many Sunni and Shiite Islamic extremist groups. Both of these examples, and there are certainly others, occurred despite over a decade of credible reporting to the contrary.

The other significant issue complicating future analytical performance against terrorists is the tendency of the FBI to compartment all pre and post-attack investigative information. I realize this committee has spent a great deal of its time looking at the many legal and other aspects of this problem, and I am not qualified to comment on those findings. However, as a former terrorism analyst and liaison officer to the FBI, I can tell you that having this information is critically important to being able to predict a future event.

If the communities' analysts are left in the dark about how a group puts an attack together, and each group does tend to do things a little differently, how will those analysts be able to pick up on future indicators of a future attack? Quite frankly, it's nearly impossible.

The investigative -- as an example, the investigative results of the 1996 Khobar Towers bombing were not disseminated until almost two years after the event, and then only to a few select analysts and agencies.

Another issue would have be what have occurred right prior to the 1998 East Africa bombings, and that's -- U.S. agencies had conducted a vigorous investigation to include a physical search of the Al Qaida cell leader in Nairobi almost a year prior to this bombing. Almost all of the results of this effort weren't shared with the terrorism analytical community due to concerns -- legitimate concerns about the criminal case. Most of the information was never properly exploited. And after the embassy bombings, the post-attack investigative results were not shared.

Now as a result, by failing to share the information, bin Laden analysts were unable to build a correct modus operandi for Al Qaida attacks. And like the Khobar Towers example, they were unable to attach the proper level of importance to those culpable individuals still at large. This directly contributed to most analysts having only a moderate level of interest in the January 2000 Malaysia meeting of Al Qaida operatives, when in fact the same node that has organized the meeting in Malaysia was in fact responsible for a great deal of the planning for the East Africa bombings.

Moving on to my conclusions, the collection of additional information, further reorganizations and the hiring of additional analysts is unlikely to significantly effect any of these issues. The central hub in our nation's past, present and future failure or successes in the counterterrorism arena will rest squarely on the shoulders of the working level, all-source analysts in both the law enforcement and intelligence community.

These men and women are the hard-working patriots who will have to try and find that single piece of hay in a stack of needles, and then try to tie it to another disparate piece of information in a timely manner. This will never be an easy job for them to accomplish, but the leadership of America's intelligence and law enforcement communities must provide them with the training, tools and information to accomplish the mission.

The information they need to successfully predict and prevent the next terror attack is probably already contained in one or more databases inside the U.S. intelligence and law enforcement community. The only question is whether experienced, working level analysts will be given access to that information and will properly integrate that material into an accurate advisory warning.

Thank you and that will conclude my remarks.

ROBERTS: Let me just follow up with a question if I might. How did the use of the analytical software tools and the databases that you put together, that gave you insight, in regards to the draft that you tried to prepare improve your ability to produce the intelligence assessments on various terrorist groups? And how do we get that information to the analysts as you have just described?

FALLIS: In my case, Senator, what I did is, I began to notice there was a voluminous amount of information, as others have testified, regarding Al Qaida. Most of it appeared to be unrelated to other pieces of information. It appeared to be almost chat. By using a piece of software that I was able to put these small snippets of information into, and graphically represent them as well, I was able to, over a course of many months, to determine certain linkages between these items -- linkages that would never be apparent without the use of this tool. It would be lost in the weeds. And there were a lot of weeds to look through.

FALLIS: The reason it makes it easier by using this, and it makes it much easier to collaborate with other analysts in the intelligence community, in the FBI, CIA and others, to bring your findings, share their findings, and then work together towards a common goal of preventing the next attack.

ROBERTS: We've heard from Mrs. Hill -- or pardon me, Ms. Hill in another hearing so if we often do not anticipate these attacks, how can we do better?

FALLIS: By making better use of the information that we've already collected, quite frankly. There's a -- we have literally a treasure trove of intelligence information spanning back decades. And the proper examination of that information, the proper databasing and building of relationships among -- with that information, I think, will give us the results, not all the way to the extent that we might want them, but it will take us a lot further than we are now.

ROBERTS: We've heard that in order to get the warnings out the right people, that it would represent a flood to the policy makers and others with what we call constant vague warnings or warning fatigue. How can we ensure that that doesn't happen?

FALLIS: That's a very difficult thing to accomplish, because too few warnings and the information's not going to get across, too many and you induce warning fatigue. I think the answer lies in the analytical efforts against terrorist groups to be conducted more efficiently and effective, to gather the details, mined from the data that are there, put them together into a collaborative assessment, and then produce better and more correct and more thorough warning products, perhaps fewer, but more pressing and more accurate.

ROBERTS: Senator Rudman called for bringing in outside experts on a more regular and systematic basis. And our inquiry has heard from others that some in the intelligence committee, at times, lack the expertise. Can these experts be found? And can they be brought in to improve analysis?

FALLIS: Oh absolutely, and that was done routinely. And frequently individuals in the counterterrorism center, the leadership there, would attempt bring in academic experts and others. And I would say that they contributed a lot to the effort of the communities' analysts.

ROBERTS: I want to ask you a question, and it appears to be, you know, perhaps too basic, but -- how do you do your job? It's a lot like when my daughter asks me, when she knew I was a Senator, and she said, "Well, daddy, what do you really do, you know, when you go to work?" I want to know how you do your job. Can you describe the type of information you use and how you put it together and what happens to it then? Just give us an idea from a typical, although you're an atypical analyst from your background and your work. And I thought it was pretty assent, but I understand now that it is prescient. But at any rate, to that ability that you have -- what do you do when you get up in the morning and you go in and you're an analyst?

FALLIS: The first thing I would generally, Senator, would be to look through all of the national products that would be available to me in message queue, in a computer terminal that would be sitting on my desk, to sort of set the ground for what had been happening in the previous 24 hours.

From that point, I would move to a message traffic handling system where I had built a profile of certain key words that would hit on certain messages being brought in. You then sometimes have up to 200 messages a day to read through. From those, I would try to pick out the most compelling information, the most accurate, the best- sourced to begin populating my database with.

Then throughout the day you'd be talking to your counterparts at the CTC and/or the FBI. And putting together assessments or other products as directed. It could be exciting, and at times it could be mind-numbing.

ROBERTS: Is this what we call rocket science? Is this really hard work? You know, we hear about the analyst who has to have all this expertise and background, et cetera. You have that. You're fluent in Farsi. You're a student of that part of the world. In terms of recruiting and training, how tough is this?

FALLIS: The act of producing -- of doing analysis and producing assessments is not -- it's certainly not rocket science and it certainly isn't pushing any intellectual boundaries. It does require time to build the experience to become what we would call a working- level or a journeyman-level analyst. There's nothing special about it. As I related to both committees, I certainly did nothing special in the period leading up to the attack on the USS Cole. I think all I did was consistently read all of the traffic I could. And then instead of just moving onto something else, taking the traffic and trying to exploit every piece of information in it to see where that would take me.

ROBERTS: Bottom line, do you have a recommendation in regards to -- in behalf of all your analyst colleagues out there who are doing the hard-working work, as opposed to all of the very important and necessary officials that we normally have here who testify?

FALLIS: I would say that we need -- we need two things increased -- two areas of concern that are going to have to be addressed, and that is the ability of analysts across the community to collaborate on their efforts, and in doing this collaboration, to have the most possible information available to them.

Obviously, we have to be concerned about whether people are properly cleared. They have to be in order to receive certain information, read into certain programs, but by reaching that sort of apex of good, experienced, hard-working analysts with the tools they need to do the job, I think that we will -- we will have a lot of the information to predict their next act of terrorism.

And more importantly, even now, looking back at the information that we had, many people will say, "Well, that was too vague. That wasn't quite enough. That didn't point to this." And that's absolutely true, but if it had been put together, and if the gaps had been properly tasked out to collectors to follow up on and to exploit, there's no telling where that could have led to.

ROBERTS: I appreciate it. Thank you, Mr. Chairman.

CHAIRMAN: Thank you, Senator. That brings an interesting dimension to the presentations today.

Ms. Pelosi?

PELOSI: Thank you very much, Mr. Chairman.

Once again I want to welcome our very distinguished witnesses. Thank you for testimony. And more importantly, thank you for your service to our country.

I have -- my question centers around the idea that immediately following September 11, it appeared that the hijackers had come into our country. They were, sort of, like automatons. They went to their station. They waited for their signal. And they acted when they received it.

From your experience, knowing, Judge White and Director Freeh -- Judge Freeh, now -- to PR. Knowing what you know about the World Trade bombing initially in '93, the East Africa bombings, and the Cole -- I'm separating those from Khobar for a moment. But knowing of those three which we had identified as Al Qaida -- do you think that there was more aid and comfort in the United States in a network that they -- that they hooked up with when they got to the United States.

I'm trying to evaluate what the threat is in the future as well as find out how this happened. We owe these families some answers, some comfort. And we want to reduce risk to the American people. I'm trying to evaluate what is out there.

FREEH: I'll try and answer the question. Of course, you know, I'm not privy to most of the non-public, in fact, any of the non- public facts relating to September 11. In fact, that's why I quoted from Director Mueller's statement, because those are the facts as I understand them.

PELOSI: Mr. Director, I know. I just meant based on what you knew about...

FREEH: Yes.

PELOSI: ... East Africa, Cole and...

FREEH: Yes, let me give you a couple of comparisons. In the East African conspiracy and attacks, two principles which I think are very important and relevant to September 11. One, the people who were selected for those missions were, for the most part, innocuous players. They were fishermen, and store clerks, who lived in communities who had routes, in many cases. And were ordinary and non- obvious people, even in the societies where they -- where they had operated and lived for many, many years. What they had in common was the Al Qaida Uma (ph) connection and the ability to become operational.

Going back to the World Trade tower, which Ms. White discussed in detail, they lived in the community. The blind sheik preached in mosques in Jersey City and Brooklyn, New York. You know, these were not extraordinary lives in terms of proved up or even known connections to international terrorists groups. There was training involved, obviously. And much of it learned after the fact with respect to Yousef and Al Qaida-sponsored training operations. But, for the most part, they were never linked, per say, to a international terrorist organization. And I think the dynamic there is the selection in the preparation.

Also in East Africa, one theme which was repeated in the Cole attack is, these are people who plan for years, who painstakingly did surveillances, who quietly did many, many things in preparation. And, as you know, in the Cole attack the target originally was another ship, USS The Sullivans, and attack which was going to coincide with Rassam's (ph) activity on the West Coast and the Al Qaida cell attacking Americans and Israeli's in Jordan.

So very painstakingly planned by ordinary people with very patient and time-consuming operations.

PELOSI: Thank you, Mr. Director.

Yes?

WHITE: I agree with what Director Freeh said. And one of the remarkable things about 9/11, I think, is how much of the planning, you know, occurred abroad, which obviously points out how critical holding onto that world coalition of partners is in the fight against terrorism and what was done within the country were, you know, just routine living acts. And so I certainly don't see, from what I know, a suggestion of aid and comfort within the United States.

I will say that, and I don't know how these facts will pan out, but two of the recent series of arrests in Buffalo and I guess Detroit, I think, that actually troubles me the most since I've left office in terms of what that can mean. You know, in other words, if you've got cells within the country, second generation Americans, assuming that is so, and obviously it remains to be seen, who are, you know, really are sleeper cells from within the country. That, I think, poses quite a danger if the facts turn out to be that.

PELOSI: My time is expiring, but I just want to say, Mr. Director that -- Judge Freeh, that the -- I was pleased that you mentioned Darno Meal (ph) in your opening comments. I visited with him the day, in June of 2001, that he had just come from the airport early and -- two a.m. in the morning. I met him about 9 o'clock. He just was debriefing some of the agents who had come back from Yemen that day. And, of course, he was full of that story. And also full of knowledge of Osama bin Laden and his designs on the U.S. I can't help but think how things might have been different in -- after September 11; we had some of the benefit of his thinking to unravel some of this, to understand the threat that still remains in the U.S.

Yes?

FREEH: No, I agree. It was so tragic and ironic that, you know, probably one of the individuals in the world most knowledgeable about this organization and its operations, killed as he's trying to save people that day along with many other heroes -- very, very tragic.

PELOSI: I wondered if he knew about the Moussaoui tape and the Phoenix memo and the rest of that, if he -- I don't know if he knew about it or if he left the agency before that information came to the floor, but he seemed to be a person who had judgment about those issues, so.

FREEH: He was an excellent agent investigator. I don't know the answer to your question, though.

PELOSI: Thank you, again, for your testimony and for your service. Thank you all.

FREEH: Thank you.

PELOSI: Thank you, Mr. Chairman.

CHAIRMAN: Senator Shelby?

SHELBY: Thank you, Mr. Chairman.

Judge Freeh, I have a lot of respect for you and I've worked with you when I chairman of the committee for a number of years, closely with Senator Kerry and Senator Bryan and others. But the picture you painted here today, not all of it, but some of it regarding the FBI, is not the same picture that our investigative staff has found, discovered, or what we've been hearing, not in all respects, in some, yes. Because we do know that the FBI, under your tenure, did a lot of good things, but that's not our jobs to just ignore the others.

The Wall Street Journal article today, which took an extract from your statement, says, "The FBI did its best." I don't doubt that, but that's not good enough. We're going to have to do better, and that's what we're talking about. And we want to do better.

You also mentioned that, and correct me if I'm wrong on this, my perception of what you said, that the FBI and the CIA, they were speaking to each other, that they, yes, more and more. And we know that there has been cooperation, some cooperation. Historically not, but in recent years, in the eight years that I've been on this committee, I've seen a lot. But I've seen a lot of problems.

SHELBY: Let me just point out some situations, just go over them again just for the record, the lack of sharing of information, the Phoenix memo. The Phoenix memo we keep talking about, but a lot of us believe that is a very important piece of information. It was never seen by the FBI headquarters, in others words, the higher-ups.

I don't know if you had left by July the 10th. Had you left by July the 10th?

FREEH: Yes, sir.

SHELBY: OK.

It was never disseminated to the CIA. The transportation people, security Administration said they never saw it.

On a local level, the information you were asked earlier by Congressman LaHood, Commissioner Norris, who's the police chief at Baltimore, testified here under oath that the FBI never shared information on terrorist investigations that were ongoing, local, Baltimore. The Transportation Security Administration testified here, under oath, that they never got background on terrorist activities or scope from the FBI. Governor Gilmore, the former governor of Virginia, as you know well, testified about the lack of sharing from intelligence -- the community, not just the bureau, to state and local officials, testified that as governor he never got briefings on terrorist intelligence from the intelligence community. He did not mention the bureau.

I do believe, Mr. Freeh, that the FBI and CIA still have information sharing problems. As we speak, right this minute there is no central place where there is a fusion of terrorist information, all information going into one center, about anything. And that's a real problem.

The CIA, you know you're talking about sharing, it goes both ways. The CIA has some of those problems too. The CIA did not give the FBI visa information on al Mihdhar and al Hazmi, and the fact that they were traveling the U.S., very, very important information. The CIA misled -- missed -- not misled, missed several opportunities to do so, January of 2000, March of 2000, June of 2001.

At the June 2000 meeting between New York FBI agents on the Cole investigation, Senator Roberts is focused on, and the CIA, the FBI agent testified here behind a screen that CIA showed them photographs of Mihdhar and others, but refused to -- the FBI request, and this was a bureau request, for copies of the photographs or information on why the people in the photographs were being followed and so forth. At the meeting, the CIA did not tell the FBI agents about the fact that Hazmi had traveled to the U.S., and that al Mihdhar had a U.S. visa.

This is serious lack of sharing of information. Have they shared? I'm sure, but these are the troubling things.

I know my time's out.

The other thing that is troubling to me, and maybe you can talk about it and I'll stay around for another round. You mentioned in your -- in your remarks, Saudi cooperation, the government. I recall, and the record will reflect that and the committee, that you told us, in the committee, on several occasions dealing with Khobar Towers, that the Saudi -- the problem, the impediment early on, maybe it improved, was in the investigation of Khobar Towers. One of the problems was the lack of cooperation by the Saudi government.

FREEH: Yes, sir.

SHELBY: Is that correct?

FREEH: Well, let me -- yes. Let me...

SHELBY: OK.

FREEH: Let me answer both your questions. Yes,...

SHELBY: All right.

FREEH: ... at an early point, there's no question, and I reflect that in my statement. There were a lot of obstacles. There were some that were legal, some that were cultural; some were due to the fact that we were trying to make that liaison work from Rome for many years, which is completely impractical.

What I also briefed to you on, during the course of that case, which was several years, was that slowly, but in a very, very positive fashion, and ultimately resulting in the type of access that I testified to this morning. They did exactly what we asked, and they did it at the expense of their own interest. That's my opinion.

SHELBY: It took awhile to do that, didn't it?

FREEH: It truly did. It truly did, which is why those liaisons are so important. If I had had an FBI agent in Riyadh...

SHELBY: Yes.

FREEH: ... on June 25, 1996, when that tragedy occurred, who had the trust and a relationship that the liad (ph) had three years later when he set up the office, I would have done much better.

With respect to your other question, there is no doubt that all those points that you raise are troubling points. And as I mentioned this morning, the committee has done an absolutely fair and excellent job in going back, as it should, and finding and highlighting those points.

My caveat, however, and my strong suggestion to this committee is that you cannot highlight and isolate those specific lapses, and exclude and ignore the excellent relationship that exists between the FBI and the CIA. I think to do that is a disservice to the relationship and it's not accurate. It's not my experience. It's not this committee's experience. As I said before, I heard nothing in the eight years from any member of your committee that did not confirm my own experience that this was a very production, efficient and transparent relationship.

Not to say that there weren't points and gaps, and we ought to identify them. You have identified them. We should fix them, but to highlight those to the exclusion of everything else, I believe, my opinion, is not accurate and not the picture that's relevant to my experience.

With respect to -- well, I think I've tried to answer both questions.

SHELBY: But the facts are the facts.

FREEH: The facts are the facts, but there are the facts which are points among thousands and thousands and thousands of other points relevant at that time. I think we need to fix them and correct them and highlight them, but if you just connect those post-ex facto, that's not -- that's not the experience or the reality that I remember.

SHELBY: Thank you, Mr. Chairman.

CHAIRMAN: Governor Castle?

CASTLE: Thank you, Mr. Chairman.

Let me adjust this question, I guess, to Mr. Freeh. It's a very broad question, but it's something I'm interested, but the others may chime if you have good answers.

And this is my concern, I have a -- setting aside any questions about what the FBI did or did not do before September 11, and you look at the history of the FBI all the way back to Hoover and it's pursuit, particularly, of criminals in American, et cetera. It just seems to me that there is -- and I'm not being critical when I say this, at all, of any of its happened or the FBI or anybody else, but it just seems to me that's there's a little bit of a disconnect between what the FBI does and the CIA does. And just because we say when they cross our borders, and therefore the FBI is going to be involved and not the CIA, is necessarily the right answer as far as I can see.

When I look at the CIA, I realize their ability, and we wish they had more, in languages and culture and knowledge of political situations or whatever. And these are things that, in my judgment, the average -- heretofore, the regular FBI agent being trained really did not necessarily have. And without retroactively being critical of what's happened -- do you have any thoughts or suggestions about the total structure?

One of the things we need to do is determine how we go forward in the future, what's in the best interest of America. And I'm not totally sure the system can work that well, because it has structural problems. Not because of any failings of individuals or lack of communication or whatever it may be, but there just might be structural problems in terms of what the responsibilities are.

And to some degree, I think of all the ones that are more of a fish out of water, it might be the FBI in that circumstance. Again, that isn't criticism. But do you get the drift of my question?

FREEH: Yes, I think I do. I think I do. Let me see if I can answer it this way. And, you know, we're not immune to criticism, and we should be criticized for some of the lapses and gaps. I'm not...

CASTLE: But I'm not worried about all that, yes.

FREEH: All right. Well, let's talk about your question then if I can. I think the way to characterize it -- the counterterrorism program is a unique program in this respect. At least when we're talking about international terrorism, we were talking about intelligence collection, primarily overseas, but also in the United States. And we're talking about law enforcement.

There is a disconnect between the FBI and the CIA. It's called the National Security Act of 1946, a decision to prevent the CIA from becoming a domestic intelligence agency operating in the United States. Congress made that decision. I think it was a great decision then. I think it's a relevant decision now.

The counterterrorism program, unlike the organized crime program, unlike the counterintelligence program, is a fairly new program. This was a program that started around 1990, 1991, 1993, just look at our history of appropriations. We haven't been doing this a long time. We have been doing organized crime for several decades, counterintelligence for more than that, and bank robberies and investigations for 90 plus years.

So there are some structural issues with respect to the administration of the program and the efficient coupling of our collection abilities overseas, which are primarily the agencies, not the FBI, and melting that together into a prevention program, which it should be primarily, but also an enforcement program.

I don't think frustration that this has not worked as well as some other historical programs should result in the conclusion that when we have to do something radical like set up a domestic intelligence agency, which, and I agree with Senator Rudman, would be a huge mistake, in my opinion. I think what we have to do is resource it, integrate it. Going back to Senator Shelby's questions, make sure we have a point where all the information flows and is retrievable, and is mined, and is utilized, but this is very, very hard.

And I think, the last point I make in response, this is very, very hard. It's not, as I was speaking to the chairman before the hearing, it's not like we go into a room and there's a machine and you press a button, and you get all the data that's possibly available in one place analyzed with some suggested leads. We may get to that point, and there may be some technology or software that gives us that ability, but there's no such thing. So there's always going to be gaps. There's always going to be points of life. There's always going to be intersections where something falls off the track.

The comeback to that is redoubling our efforts, resources, training, technology, integration, changing the structures around and I don't think we have to invent the wheel.

CASTLE: Let me ask the quick -- I'm going to run out of time in a hurry.

And I don't dispute what you're saying, but sometimes I wonder if, you know, counterterrorism is fine and that kind of thing, but even if we don't separate it from the FBI, should the FBI be divided more so that there are people who focus just on this and then people who focus just on, say, crime in the United States?

I'm a little worried about the other aspects of the FBI being harmed by this too that if all the sudden the scales have gone so drastically the other way that we're forgetting the other functions of the FBI too. I'm looking for an answer.

FREEH: The answer is, we have division. We have a counterterrorism division.

CASTLE: Right, but is it really divided sufficiently, you think, at this point, that there...

FREEH: We can do better. It's a new creature within the...

CASTLE: Right.

FREEH: ... structure.

CASTLE: Exactly.

FREEH: We have a counterintelligence national security division. We have a criminal division. You know, we have all these things.

I think, you know, the organization is there. And as Senator Rudman said, the expertise in terms of the collection and the protocols necessary for enforcement and prevention are there. We've just got to resource them and integrate them in a better way.

CASTLE: OK. Thank you, Mr. Freeh.

I yield back, Mr. Chairman.

CHAIRMAN: Thank you.

I have a couple of questions stimulated by the conversation today which has been very helpful to me.

The first one basically goes to, Judge Freeh, your remarks that we are a nation that is a rule of law nation. And we're very proud of that. We're a free democratic society. And I would be interested to know what you and Ms. White and Mr. Pillar mean -- Dr. Pillar mean -- would say to the question that we play by the marquis of Queensbury rules and the other guys don't. Is there a simple way that we can deal with that?

PILLAR (?): Not a simple way, Mr. Chairman.

CHAIRMAN: How far can we go, understanding that we're getting hit below the belt, but we will not hit below the belt?

WHITE: The rules are different depending on what system we're using, I think to same extent. If you're talking about the criminal justice system, I'd be the last person to advocate, you know, treating a terrorist defendant any differently than any other kind of defendant, despite the seriousness of their crimes and the difficulties in doing that. Are we, you know, dilute our own system?

CHAIRMAN: Well, I would -- I would put it a little differently. Let's suppose somebody comes into this country with malice forethought and they are going to do a dastardly deed such as the World Trade towers, but they don't break any laws. And they don't have any fear of the death penalty, because that's their reward.

How do we make our law enforcement and our intelligence defensive capabilities work to figure out how we can stop something before it happens in a case like that. What authority do we have and what capability do we have here in a free democratic open society to say, "Gee, we're the thought police. We think you're thinking of doing something bad. You're treated as an American person here, and we're a little concerned about that"?

WHITE: Well, I'm...

FREEH: I mean I would agree with Mary Jo White that we've got to talk about what plain we're operating on. If it's an immigration issue, and a border issue, you know, the person doesn't have the same rights, obviously, and the same ability to enter and remain in the United States than a U.S. person would have.

Should we use a law enforcement agency to operate, you know, to use your phrase, as a thought police or as a preventive police. You know, my view is no. If we have a suspected terrorist who has in his mind the plans to commit an attack should we allow the FBI to use whatever measures possible or available to get that person to disclose that information? Many countries, as you know, do that. Do you want your FBI agents doing that? And then who chooses the cases where that technique is used and not used?

You know, these are huge and difficult issues. I think I come back to the FBI, at least, being part of the Department of Justice and be an agency that adheres to the rule of law. Now, the Congress, the courts, the attorney general and the president can change those rules from time to time.

I'm looking here at the draft of the new attorney general guidelines on general crimes and domestic terrorism enterprise investigations. Completely different document than we operated under for eight years. That's fine as long as those rules are changed in course with the rule of law, and they're clarified. And then you and others scrutinize how they operate.

CASTLE: Well, the reason I was asking is because that's exactly the process we're in, is scrutinizing those kinds of questions now. I mean, we're hung up on the question of how do you deal with these people once you catch them and do the document exploitation. Are they detainees, war criminals, depending, et cetera -- all the combinations of citizenship that can be involved in all of that? How far can you go asking questions? And does it depend on an urgency that something horrible is going to happen if you don't get the right question asked soon from the person who has that answer and doesn't want to give it to you? Those are very difficult questions.

FREEH: Extremely difficult.

CASTLE: And we're looking for ways to legislate a solution or point to the executive branch to say, "Do something." You're the people who have that experience.

Dr. Pillar, did you have any point on this?

PILLAR: Just, if we can catch the person overseas first, there are things that we would there or have our foreign partners do, still short of committing anything that would be human rights abuse or that would offend our values in those respects, but would still not be the sort of thing that the FBI or U.S. attorney would do here. Things that would fit under the category of, shall we say, harassment, or even just a knock on the door by the local police or security service is enough, and we have seen it happen in the past, to break up an incipient terrorist operation.

Terrorist don't like to be found out. They don't like to be suspected. And so there are a lot of things that we can encourage our foreign partners to do just under mere suspicion that perhaps the FBI could not do who are here in the United States.

CASTLE: I would just simply, as my time is us, I was to say -- is it right for us to do a third -- get a third party to do what we ourselves would not do?

PILLAR: Again, I would emphasize, I'm talking about things that fall short of anything that would be a human rights abuse or things contrary to our values, but they would still fall in the harassment category.

CASTLE: Not to be contentious, but let's just suppose we talked about, "We know where your family is."

PILLAR: That's a possibility.

CASTLE: That's a possibility.

PILLAR: As a mind game.

CASTLE: Well, it's exactly the kind of question, I mean, defining terror, defining all of these words that we are -- in going into a new global time. We know who we are, we think. How do we act in the world to best represent who we really are? That's sort of the question we're wrestling with.

PILLAR: Sir, there are a lot of things we can do that I would category of mind games. No use of force. No use of violence. Certainly no abuse of human rights, but can be and have been effective as a disruptive tool with terrorist infrastructures overseas.

FREEH: Mr. Chairman, again I think it goes to the earlier discussion and point that was made here by I think every witness today. You know, what world are we in? If we are fighting a war, you know, we're using different rules and different remedies. If we're conducting a criminal investigation, we're doing -- we're doing something else, but, you know, the tip of the sphere of the country's counterterrorism policy is not found in an arrest warrant from a grand jury in New York. It's going to be found at the tip of the TLAM missile in that category of threat.

So we just have to know what world we're in and then follow those rules.

CASTLE: Well, again, my time has expired and I agree that we do have to know that. That process itself is difficult.

We had war declared in 1998 against us and by us and nobody came, which will get to my second question in the next round.

CHAIRMAN: I think we are going now to Mr. LaHood.

LAHOOD: I just have one question. You've been very patient with all of us and I appreciate that. And I know all the members do.

I asked Director Tenet this question. And I ask it of you, because of your long and many years experience in dealing with issues of terrorism. What was your reaction? Not your emotional reaction, because I know, Judge Freeh, you mentioned the victims in your -- right in the beginning of your testimony. So I don't want -- I'm sure we know what your emotional reaction was, but on September 11, what was your reaction when you discovered that four planes had been commandeered and 3,000 Americans had been killed, four planes simultaneously. And I'm asking that in the sense of were you -- were you surprised? And I don't want you to -- I'm trying to determine if, you know, this idea that this idea that this could happen was a surprise to you like it was to every member of Congress and every American, or was this idea -- I mean, you talked about the fact that you knew America was going to be attacked again. And we know it's going to be attacked again.

But I'm wondering what your reaction was when you saw the pictures on the television screen and thought about what happened?

WHITE: Well, I was actually there so I saw more than on the television screen. And my reaction was, like all of America, horror. And the manner in which the attack occurred, and the massiveness of it came as a surprise to me too. Not that there was an attack, not that there was a massive attack, but as massive as it was and in the way that it was -- what's the phrase which everyone uses now -- which I think is apt for my reaction.

You know, is it a failure of imagination. I mean it's -- maybe it is, but I was surprised at the attack, at the type of attack.

FREEH: Yes, I think I would say the same thing, the scope of the attack, but not the fact of the attack, you know, was shocking. We were all, I think, towards the end of 1999, literally the last days and minutes, we were all in our respective command posts around the country. You probably remember this was the millennium where we weren't only worried about the computers turning over, but we were worried about a major attack by either an Al Qaida-type group or some other organization either in the United States or somewhere around the world.

An attack that would have happened at that time would have not surprised anybody. There wouldn't have been any shock with respect to the fact that we were attacked. And again, this is -- this is coming down the road from the World Trade tower, from Khobar, from the East African Embassy bombings.

So to answer the question, the scope of it and the success of it, I mean, the horrific success of it, but not the attack itself was a shock.

PILLAR: With regard to any particular technique, by definition it's a surprise, because if it could have been foreseen tactically, it would have been headed off. But as to an attack aimed against the U.S. homeland, to cause mass casualties, truly mass casualties, and by this particular group or people of their ilk, in that sense it's not a surprise.

LAHOOD: Should we worry that it will happen again?

PILLAR: Yes, sir.

LAHOOD: Judge Freeh?

FREEH: Absolutely.

LAHOOD: Ms. White?

WHITE: Yes, we should worry about it.

LAHOOD: Thank you, Mr. Chairman.

CHAIRMAN: You're welcome.

(UNKNOWN): We talked a little bit about how we try to anticipate what happens next, and following up on Mr. LaHood's question, how do we try to prepare our country and our intelligence services and our law enforcement and our local responders to what might happen next in this country.

I guess in reading a book that was written about Pearl Harbor by Roberta Wohlstetter, she has a preface in it written by Thomas Shelling (ph). And he says in his preface to Pearl Harbor, he says, "This was a national failure to anticipate the enemy's next move." Many people in the press have speculated that are smoking guns or, you know, the old adages that we apply.

How would you respond to that, Judge Freeh, that this was a national failure to anticipate the enemy's next move when we were at war?

FREEH: Well, I think, you know, this committee's work and any commission that follows is going to have to give us a lot more facts and perspective to make that kind of a conclusion. The word failure, in the technical sense, implies that there was or should have been an ability to avoid the failure. And I don't think we have enough facts, I certainly don't, as really a private citizen reading newspapers, to give you an opinion on that.

With respect to what we do here in out, I think it's going to be a function of intelligence. It's going to be a function of interdiction, going over to where we have to go over, whatever sanctuaries, as Ms. Hill mentioned, and do what have to be done there to destroy command and control capability and also to exploit intelligence. It means infiltration. If one of those 19 hijackers had spoken, maybe they did, maybe we don't know about it yet, un- cautiously or imprudently to someone in some place where that information could have been captured, we could have had a Day of Terror prevented instead of September 11. There's all kinds of possibilities there. So infiltration, we need to have our agents sitting around, wherever there were sitting around in Hamburg and the UAE and other places as well as in the caves over in Afghanistan so we can know what's going on.

All those factors, I think, you know, working together has to occur, but as you just asked the question or someone -- Mr. LaHood just asked a question, you know, we shouldn't -- this is a hard thing to say, I guess. But we should not give the mistaken impression to people listening to our debate here that, you know, there's a secret formula for preventing this. You know, if we could just reorganization homeland security, if we could just give a couple of million dollars to the FBI, if we could just do a little bit better, we're going to prevent these things. That's a fallacy, and it's a misleading impression. If that was possible, we wouldn't see any attacks in Israel, with their experience and expertise and skill.

So we have to, unfortunately, accept the reality that these attacks, from time to time, even on a spectacular and shocking and horrific basis, will succeed. Our job is to reduce that incident, to make those attacks as unlikely and infrequent as possible, but it's not just the question of rearranging the chairs on the deck.

(UNKNOWN): And as I at least meant to say in my opening statement that I don't see this as a smoking gun. I don't see a national failure meaning it could have been prevented. I think mistakes and gaps and failures and disconnects were out there. I'm not sure that this committee has found or will find a smoking gun, but we sure need to correct the mistakes and gaps and disconnects.

Ms. White, what would you say about that?

WHITE: Well, I certainly think we need to, you know, zero tolerance is an overused phrase, but we have to have to have zero tolerance for any instances of failure to communicate, whether it's between the FBI and CIA or whomever. There's no silver bullet. I mean, I think everyone agrees on that. We are more vigilante now. I think everyone has lowered the bar, and I'm talking about cops on the beat as well as FBI and CIA and everyone else, for what will have us take the next investigative step.

I think we, you know, we have a list of things from all these cases we've done, investigations we've done and the cooperating witnesses, you know, who have been debriefed who serve their wish lists of various, you know, terrorists, you know, attacks. And as apocryphal as they still may look, you know, in terms of the reality we have to at least assume it could happen, and figure out how best to anticipate that.

I think we're doing a lot in the way of homeland security, which I think is critical. We're the most vulnerable. We need to shore ourselves up. I mean, we're way ahead of where we were, but, you know, we're still vulnerable.

(UNKNOWN): Mr. Pillar?

PILLAR: I would just associate myself with everything Judge Freeh said in response to your question. It's all the things he mentioned and more.

And on this question of preparing the American people, I would just underscore what I tried to say in my opening remarks. There is no silver bullet. We should not let the American people think that by this next set of changes or fixes, whatever they may include, somehow we solved the problem.

I think we can learn some lessons from the Israelis in this, whose government have made conscious efforts to psychologically prepare their people for dealing with terrorism, not accepting it, but dealing with it in a way that tries to minimize the psychological impact that's an inherent part of what the terrorists are trying to do.

(UNKNOWN): Thank you.

CHAIRMAN: Senator Roberts?

ROBERTS: Thank you, Mr. Chairman.

ROBERTS: Dr. Pillar, I am intrigued by your statement on page three when you said, "What is the lesson to be drawn from this episode apart from the direct one that the intelligence community and the FAI were working closely with irrelevant regulatory agency as early as the mid-1990s to call attention to the foreign terrorist threat to domestic civil aviation."

I think it has to do with how much our national willingness to respond with things like expensive new security measures depends on the reality of past tragedies more than projections of threats that have not materialized.

Here is the key -- the intelligence community has a duty here. As any new intelligence analyst is taught -- and Kie Fallis can tell you about this -- what matters in not just to make the correct predictions and hit the right notes, which may look good in postmortems, but to beat the drum loudly enough about impending threats to some chance of making an impact on policy. Of course, if you beat it too loud, you get the drum around your head.

My question to all of you is what keeps you up at night? What drum would you like to beat if, in fact, you could beat one to change policy, as opposed to what you have been doing within the confines of your jurisdictional responsibility?

Start with Ms. White.

WHITE: Get the walls down and make sure all the information is shared and analyzed real time by excellent expert analysts.

ROBERTS: Judge?

FREEH: I'm going beyond the scope of my prior responsibilities. I mean, I think to the degree and certainty that we are able to identify a state or state-class threat bent on destroying the United States and killing thousands and thousands of Americans...

ROBERTS: Sanctuary, in other words.

FREEH: Exactly. We have to make that decision. That's maybe the hardest decision that a president or a Congress has to make. The circumstances have to be right. It takes enormous initiative and courage.

But I think when we find that kind of a threat, we have to go after it and not relegate our response to subpoenas and search warrants.

ROBERTS: So if Afghanistan was the sanctuary for Al Qaida, had we denied that sanctuary, we would have been miles ahead and hopefully something could have been done.

FREEH: Miles ahead and hopefully we could have avoided some of the horror.

ROBERTS: Paul, you're the drum beater -- pardon me for calling you Paul -- Dr. Paul...

PILLAR: That's all right.

What keeps me up at night, Senator, are the -- not just the current group we're going after -- Al Qaida -- but what comes after that and what comes after that.

And I am...

(CROSSTALK)

ROBERTS: ... terrorist groups?

PILLAR: Terrorist groups, including fragments of and successors to Al Qaida, even after we have reached a point where we could say we've beaten Al Qaida, as an organization.

ROBERTS: So we're at war with radical groups in the Islam world -- Samuel P. Huntington (ph).

PILLAR: I prefer not to use the term "war" with anyone in the Islamic world, because of the connotations that that has...

ROBERTS: Well, I meant...

PILLAR: ... for many people here...

ROBERTS: ... -- no, I said "radical groups within the Islamic world."

PILLAR: Certainly with the radical groups.

ROBERTS: The radical groups.

PILLAR: But, again, we should not make the mistake that we have our sights on one group or one state and once we have eliminated that we've gotten us through this...

ROBERTS: So the Osama bin Laden syndrome and if you get rid of him, you're OK?

PILLAR: I think that's a mistake to say "we've gotten rid of him, it's OK." Look at the current situation where it's uncertain whether he's dead or alive. I think most of the analysts who follow the problem would agree that even if his dead body were to turn up tomorrow, we've still got a serious problem with the people who are either in his organization now or, as I say, will be members of fragments or successors to it.

ROBERTS: Kie, you were a brave and successful drum-beater. Do you have a drum that you would recommend that you could beat on now in terms of making a policy change?

FALLIS: Well, sir, I would just build on what Dr. Pillar said and that is the concern that I have over how these groups will evolve and change.

Beginning in 1998 is when you saw a major evolution in the capabilities of the Al Qaida network and their ability to target U.S. interests. I believe -- and I think the evidence is there -- of another actor that helped these people gain this capability. And as their sanctuary has been denied to them in Afghanistan and they seek other places -- other leaders, under which to coalesce -- that the results are potentially very dangerous for the U.S.

ROBERTS: So a policy of preemption, no matter how tough it is -- and it is very tough, with changes in foreign policy, military tactics and the political situation -- that's the road we have to take?

FALLIS: I believe so, sir. I think the static defense is always doomed to failure.

ROBERTS: Thank you.

CHAIRMAN: Mr. Chairman?

GRAHAM: Thank you, Mr. Chairman.

I have two areas that I would like to question in -- one is I, as I said in my opening statement several hours ago, I was concerned about the fact that we seem to have limited knowledge on some of the strategic issues relative to terrorist agents who are within the United States, including numbers, capabilities, intentions, relationships with headquarters organizations for purposes of command and control, financing, general support.

Do you share my concern about our limited knowledge of those issues? Is that an important set of questions? And if it is important, how do we go about increasing our strategic knowledge of who our adversary is?

FREEH: Well, I mean, I'll start, Mr. Chairman.

And I think it is an important and valid concern. I mentioned before that, again, now more as an observer than a knowledgeable insider, the huge increase in cases and identified subjects in the United States -- people who fall into the category that you have just articulated a legitimate concern about -- cases being opened and techniques and resources being expended that, obviously, were not being expended before -- my belief is that a lot of that information -- at least this is what I'm told -- and, in fact, I read it in the papers on Sunday -- a lot of that information is from exploited intelligence received overseas by the very military action that we have all talked about today as, in some cases, the only alternative to, you know, what we can do in a passive way to deal with this problem.

So I think, you know, that kind of exploitation of intelligence translated into active surveillances and investigations and collection, which leads to detentions, immigration violations, jay- walking -- whatever the case may be to neutralize that threat -- has to be done. But I think the intelligence has to come from some place. We can't come up with an invalid profile or stereotype and that becomes the focus of what we do. We don't do that in America. We don't do it well and we don't do it at all.

I think it has to be done on the basis of information and intelligence. And you get that inside the country by informants and infiltration. You get it outside of the country by exploiting the things that are being exploited. And that's where the focus, I think, needs to be.

GRAHAM: As an example, someone has characterized the Al Qaida as being almost Germanic in their obsession with record keeping and, thus, the large volumes of materials that we're getting. And then, among those records, we -- maybe we have -- we hope we'll have things like rosters of students who attended these training camps. And thus, put ourselves in the position to begin to ask the question "are some of these students who were trained in specific skills while they were in Afghanistan -- do we have any reason to believe, through visa records or immigration records or others, that they might be in the United States today?"

Is it your sense that we are -- to use your term -- exploiting some of the data that we are now gathering through interrogations and document seizures in Afghanistan and elsewhere...

FREEH: Yes, it is.

GRAHAM: ... for that purpose?

FREEH: That's exactly what we're doing.

And to go back to the other point made here several times, the -- Mr. Pillar most recent -- you know the importance of our overseas liaison and contacts, you know, to the extent that our counterparts, whether they be police officers or security services, in dozens and dozens of countries are willing to impart that information to us -- that they trust us enough that they will give us access to that kind of information, that's the basis upon which leads and prevention, you know, translates into the homeland security.

GRAHAM: Thank you.

CHAIRMAN: Ms. Pelosi?

PELOSI: Thank you, Mr. Chairman.

Following up on the chairman's line of questioning, I want to refer to something in your testimony, Judge Freeh. In it, you say, "The 1996 Khobar bombing investigation demonstrates the FBI's successes and limitations in combating foreign-based terrorists to wage war against the United States."

For us, at the committee, and for all of us involved in intelligence in any way, force protection is our highest priority -- and certainly pre and post-September 11 forces overseas and in our own country.

It was interesting to me that we had troops in Saudi Arabia -- when I read in your testimony -- I was surprised to read that it said, "because of the FBI's prior contacts with the Saudi police service, the Mabaheth, and Interior Ministry had been carried on from offices in Rome and later Cairo, the FBI lacked any effective liaison or relationship with its counterpart agency in Riyadh."

It seems to me that the minute we put troops on the ground, part of that arrangement should be that there would be an FBI presence in the country. It doesn't have to be highly visible. But this terrible tragedy which -- before we got over it, we were into the East Africa and then before we got over that, we were in the Cole and the, of course, September 11 -- this terrible tragedy losing our young people in the armed services -- you had to come from the United States, send scores of agents there to investigate the -- to do the forensic work, et cetera, at the scene.

Wouldn't you think that it would be -- or would you recommend that the minute we put troops on the ground, there is an FBI presence, visible or not, in the country and that be part of the arrangement?

FREEH: Yes, I would, but maybe going beyond that and maybe more significantly, you know, those are relationships that have to be grown over a period of time.

When the bombing took place at Dhahran, the liaison between the FBI and the Saudi police was out of Rome.

PELOSI: Yes.

FREEH: You know, every two years the agent would come by and talk to somebody. And that was it. There was no high-level counterpart interaction. We didn't know who to call. And they didn't know who to call to the extent that they wanted to work with us.

PELOSI: Well, I mean, I find that appalling that we have troops on the ground -- they're a target. You know, we can imagine that they would be a target. And, yet, we have somebody in Rome who stops by every now and then.

FREEH: I couldn't agree with you more.

PELOSI: Yes.

FREEH: But just to finish my sentence -- the notion is getting those people on the ground before the troops are there...

PELOSI: Of course.

FREEH: ... and...

PELOSI: Also, you go on to talk about the cooperation the FBI received as a result of Prince Bandar and Nayef's personal intervention and support of unprecedent (ph) -- invaluable -- from time to time the road back a legal obstacle would occur, which was expected, giving our differences. Despite these challenges, the problems were always solved by the personal intervention of Prince Bandar and his consistent support for the FBI.

But I would certainly hope that -- well, we cannot get there before the troops get there -- where they are now -- that we would move quickly to make sure we have a presence -- the liaison relationships established in any of these countries and certainly before we send troops to any new country for any duration and a presence -- that we would do that.

Judge White mentioned in her comments, just in passing, she said, "the value of the cooperation that we have" -- let's see -- we hold on to the coalition that we have in the fight against the war on terrorism so that we can share information and how valuable that is.

And it seems to me that it would be more valuable the stronger the presence.

But Judge White, would you like to speak to that?

WHITE: Absolutely.

The single most important thing, I guess -- well, there's several single most important things we've talked about -- but I think in the war on terrorism our ability to combat it -- protect ourselves is holding on to this world coalition and expanding it. Because if you have a hole in it, that's where the next plot is going to come from -- that's where the next sanctuary is going to be.

And to the extent -- and Director Freeh just did an amazing job at globalizing the FBI, which is making possible that coalition now, in my view. I mean, it's not -- we don't have everybody in it. And we need to get everybody in it. And the FBI doing the groundwork for that everywhere, I think is just critical.

PELOSI: I thank you.

And Judge Freeh, I was not saying that you should have had this done, I think is something at the State Department at the National Security Council level that has to be part of the package before we put our -- or as we put our troops on the ground -- or, as you said, before we do.

So, you know, I commend you for your work. But I think that there needs to be some higher level -- well, we all look to a higher level in terms of the federal government -- to the executive branch making sure that this happens before we go in.

FREEH: Yes. And I would agree.

PELOSI: Thank you all. Thank you very much.

Thank you, Mr. Chairman.

CHAIRMAN: Senator Shelby?

SHELBY: Thank you, Mr. Chairman.

I'm going to go back to basically analytical center, you know, where -- a fusion center or whatever you want to talk about.

Judge Freeh, you talk about -- and I'm reading an excerpt, again, from your remarks -- and I'll quote you, and you correct me if I'm wrong here in the quote -- or if the quote's wrong -- you say, "it's very important, in hindsight, to segregate this relevant information and put it into a dedicated time line."

I agree with that -- as we do in a postmortem. But isn't it very important to put all of this information together -- relevant information -- fusion center -- to try to predict something? In other words, try to discern something is going to happen, just as well.

FREEH: Absolutely. I mean, prevention is what the priority is and has to be in this area. And the prevention is only as good as the success of that fusion and its predictability.

SHELBY: And if we don't put together -- that is, all of us, collectively -- the Congress, the administration -- and put the resources that we keep talking about together for some type of a fusion center, we'll pay again, will we not?

FREEH: I agree 100 percent.

SHELBY: Ms. White?

WHITE: I definitely agree.

SHELBY: Dr. Pillar?

PILLAR: Yes, sir.

FALLIS: Yes, sir.

SHELBY: Judge Freeh, I believe you said today that the FBI -- you're speaking of the bureau -- was intensely focused on an attack within the U.S. Dale Watson, who's just retired from the FBI and was head of the FBI's counterterrorism program under you and under Director Mueller, told the staff he was, quote, "98 percent sure the attack would be overseas." He's head of the FBI's counterterrorism center. And this was based upon the summer of 2001 increase in the chattering threat warnings that were put over here.

Is your view basically inconsistent with Mr. Watson, who was head of your counterterrorism center?

FREEH: Well, I...

SHELBY: And -- OK.

FREEH: I'm sorry.

SHELBY: No, go ahead.

FREEH: I don't think it's inconsistent.

Now, I'm not privy to the summer intimation.

SHELBY: Sure, you had left.

FREEH: What I will tell you is when I did leave, which was in June...

SHELBY: When you "left," you meant you retired.

FREEH: I'm sorry -- when I retired, yes.

SHELBY: Sure.

FREEH: You know, I was, as I said, working and conscious of that line of events and activities going back to the lower Manhattan attack on the trade tower in February of 1993.

Ressam confirmed that we were being targeted within the United States. And it was a myth that we were lucky to have avoided, but the intent was still to attack us in the United States. The fact that he was expecting, by the end of the summer, an attack overseas I don't think is inconsistent with the fact that we were also intensely focused on the targeting of targets within the United States. I don't think that's inconsistent.

And I don't know what information he had at the end of the summer, which I don't have.

SHELBY: It's my understanding that -- and this is coming from a December 2000 report -- that the FBI and the FAA published -- it was a classified assessment, and I'm not going to read from that, that suggested concern about the threat to domestic aviation, you know? But basically saying that the FBI investigations or judgments confirmed domestic international terrorist groups operating in the U.S., but do not suggest evidence of plans to target domestic civil aviation.

In other words, the FAA basically told us that at no time did the FBI or the CIA tell them or warn them about the possibility of airplanes being used as weapons in this terrorist war.

FREEH: Well, I'm not privy to that report.

SHELBY: Yes.

FREEH: I'm also not trying to avoid your question. I'm not aware of any dissemination made while I was in the FBI to the FAA that airplanes would be used or could be used as suicide weapons, as they were.

I am aware -- not just from the Gore Commission, but just from being alive, that airplanes and hijackings of airplanes have been a premiere terrorist target and activity for the last 25 years.

And that should come as no shock to anybody.

SHELBY: I can read this -- I was just told by staff it is unclassified. We have to be careful what we read up here, but -- and I'll read from this report, just for the record.

It says, "In December 2000 report, the FBI and the FAA has, again, published an assessment that suggested less concern about the threat to domestic aviation." And I'll quote there -- "FBI investigations confirmed domestic and international terrorist groups operating within the U.S., but do not suggest evidence of plans to target domestic civil aviation. Terrorist activity, when in the U.S., has focused primarily on fund raising, recruiting new members and disseminating propaganda. While international terrorists have conducted attacks on U.S. soil, these acts represent anomalies in their traditional targeting, which focuses on U.S. interests overseas."

Gosh, it was so wrong, we know now.

Do you agree with that?

FREEH: Well, you know, "evidence" is a very technical and very...

SHELBY: I know that.

FREEH: ... significant word. I don't know what they meant to communicate when they said "evidence." As opposed to the threat, just repeating my last answer, hijacking of aircraft, up to and including September of last year, was always considered by everybody as a primary target for terrorists, which is why the efforts were taken to fortify airports and profiling and securities. You know, that should come as no surprise.

SHELBY: Should it have come as any surprise that airplanes would be used as weapons to crash into the trade towers, considering that in 1995 the Filipino situation that I know you're familiar with? You know what happened there and the information was right -- the French scenario where someone was apprehended and they had information they were going to use that plane to crash in, I believe, to the Eiffel Tower -- and other information.

Should it have come as a surprise?

FREEH: Well, no, the answer is no. But, again, you've just very expertly distinguished what we call the strategic intelligence from the tactical intelligence.

SHELBY: Absolutely.

FREEH: Did the FAA and the industry have that strategic intelligence? They probably did. Did they have the tactical intelligence? Did anybody have the tactical intelligence that aircraft would be used in the manner that it was used on September 11? I think the answer to that is no and that's why the committee and a commission needs to get into the weeds.

SHELBY: Thank you.

Thank you, Mr. Chairman.

CHAIRMAN: Thank you very much.

The final question that I had went to a frustration that I have felt and I'm sure you have all felt, too, in the positions of responsibility that you've had. I don't think, as I look at the panel of very distinguished and experienced people who have been working with this problem on behalf of the United States of America -- writing about it -- dealing with the intricacies of it and the complexities of it -- that there is any doubt at all, after hearing today, that we understood pretty well what the problem was.

And I don't think there is any doubt at all, from my working association with the people at the table and their reputations and the accomplishments they have made, that they had excellent ideas on how to take care of weaknesses in the system or problem areas or, where resources were short, bring attention to those under-investments.

But my question is that we have seen a lot of similar witnesses who have shared in the work product here, with us, trying to get to the bottom of all of this and how we do better -- how is it, do you think, that all of the expertise and all of the authority that was embodied in articulate, knowledgeable, hard-working people failed to receive the audience that it should have gained so that we could have focused our resources, our country, our constituents -- I guess what I am asking is how come nobody was listening?

Do you have any idea how we can do better on sounding the trumpet when we see these things happening to us? Because I think we've all admitted we were surprised at what happened -- how it happened, but we weren't surprised that it happened.

WHITE: I think that September 11 was that trumpet. And I think, unfortunately, and tragically, but perhaps understandably, it took tragedy -- horror at that level to grip, certainly, the public's attention on this.

And I think, to some extent -- I mean, look how we've had to change our lives already within this country and around the world. That's not something we do lightly or want to do lightly, either, absent, you know, an attack at that scale.

The East African embassy bombing case -- 224 people died. Over in East Africa, we tried the case, you know, in the Southern District of New York in lower Manhattan -- wrenching, wrenching testimony. But still, I think, within the country, that's "over there."

CHAIRMAN: Yes.

WHITE: And when it was "over there," it didn't grip in the same way.

So I think it's gripping now. We don't want to, you know, lose sight of the fact that it's a clear, present and continuing danger, though. So I think we still have to be trumpeting. But I think September 11 was a loud call.

CHAIRMAN: Well, I hope you're not sentencing us to becoming a reactive society when I think we need to be a visionary society. Perhaps that's one of our lessons.

Judge Freeh?

FREEH: Well, I share your frustration, Mr. Chairman. And, you know, I hope September 11 is the trumpet. I just don't know -- I mean, you know, did the United States, in the same class of wonderful people that you just described, you know, know in 1941 that Japan was capable of attacking the United States? Yes.

CHAIRMAN: Yes.

FREEH: Was anything done in time to build up our military? Did the world know by the summer of 1933 that the national socialists in Germany were going to try to take over the world and murder six million Jews? Sure, they did. And they sat around at the Evian Conference -- 32 nations -- and couldn't come up with a solution.

So, you know, are we doomed to this kind of failure? You know, I hope not. I hope September 11 has sounded that trumpet. But it's going to be up to not just the leadership of the country, but really the people to keep that vision -- I think you used the word completely correctly -- in front of us.

And our experience in these things is not good -- as human beings and as Americans.

PILLAR: Mr. Chairman, the event last September, clearly, was a trumpet. The question is how quickly and how deeply the blare of that trumpet will fade over time. And I think it's already fading some.

We've seen this consistent pattern throughout this period -- this last decade that this hearing has been devoted to -- of a spike up and interest and concern when we have a major incident and then the line of concern and interest in this topic goes down.

Clearly the spike on September 11 was far greater, simply because of the enormity of the act. But it, too, is already a curve coming down. And the one piece of advice I would give to political leaders like yourself is to try to spread out your action and rhetoric and legislation and everything else so it's not all bunched up right after each attack, but continue to remind the American people, along with the rest of us and in the press, and those of us who write books and so on to get the point across that the things that we need to do in this counterterrorist business cannot all be sandwiched in in the first few months after each major attack. It's got to be consistent.

CHAIRMAN: My time has expired, but I do want to pass along a question to each of you -- it's a yes or no -- that some of my colleagues are passing along to me these days. And it is do you think we are overreacting to 9/11, as a nation?

WHITE: No.

FREEH: No.

PILLAR: No.

FALLIS: No.

CHAIRMAN: Thank you very much.

Chairman Graham?

GRAHAM: Can I ask a question which is in the same line of the chairman's questions? Is there anybody in the world who is doing the intelligence business better than we are that we could learn some lessons from, particularly in this area of what I call the revitalization or the reinvention of agencies as circumstances change and the need to alter behavior in order to respond to the new circumstances?

Are there any role models that we should be garnering lessons from?

PILLAR: I can't think of any one role model, Mr. Chairman, but there are a lot of little lessons to be learned with regard to going after particular types of groups. In many cases, we have foreign counterparts that have been on the front line, literally, in the sense of their interests and their citizens being the victims of attacks by a particular group. And so they know a lot more about that group and how to go after that group and now to collect against that group than we do.

And so you can look at those sorts of group-specific, region- specific lessons. But, no, sir, I can't think of any one role model that is the one that we need to emulate on everything. We need to learn lessons from a lot of different partners.

GRAHAM: Thank you, Mr. Chairman.

CHAIRMAN: I want to thank you. Not only do I admire your wisdom, but I admire your stamina. And I really admire anybody who can sit for this many hours. We have the opportunity to get up and walk around.

I will close this hearing by saying the committees will meet in closed session tomorrow, October 9, at 2 p.m. in S-407 in the Capitol. The committee will, again, meet in open session on Thursday, October 10, at 10 a.m. in this room.

On Thursday, our witnesses will be the director of Central Intelligence, Mr. George Tenet; the director of the Federal Bureau of Investigation, Mr. Robert Mueller; director of the National Security Agency, General Michael Hayden.

The directors have been requested to address, among other matters, the issues that have been raised and recommendations made during the course of our 20 open and closed hearings.

And I would say today we have covered an awful lot of material that has been extremely helpful to us and, I hope, to the American people -- understanding what an amazing group of hard-working people we have out doing the business of America's national security in a number of fields where it all has to be done and we seldom pay it any attention.

So I thank you all. God speed in your work.

GRAHAM: And I would like to join in those words of our chairman and express my appreciation for the very excellent insights and the sharing of your depth of experience. We appreciate it. We have taken it on board. I hope we can use it properly.

FREEH: Thank you.

WHITE: Thank you.

PILLAR: Thank you.

CHAIRMAN: Thank you all.

END

NOTES:
[????] - Indicates Speaker Unknown
[--] - Indicates could not make out what was being said.[off mike] - Indicates could not make out what was being said.

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