It was initiated by Congressman Curt Weldon, who saw the need for this, and then it was concurred with by the U.S. Senate as we moved forward. This discussion went forward at the end of 1998. The commission was stood up in January 1999. I was approached as Governor of Virginia and asked whether I would chair the commission. It is staffed by the Rand Corporation. The commission is now and has been in the past made up not by people from inside the Beltway, but instead the Congress in its wisdom decided to set up a committee that was different. The advisory panel that we have is heavy on fire, police, rescue, emergency services, health care, epidemiologists, including retired general officers and people from the intelligence community. So it is a bit of a different mix. In the first year that we met, in the year 1999 we did a threat assessment, and by statute every year we report on December 15 every year to the Congress and to the President. In that year, December 15, 1999, our first report was a threat assessment. We assessed the question of a genuine threat of weapons of mass destruction in the United States, and considerd at the end of the day that it was much less likely that those weapons could be acquired and delivered in the homeland than a conventional attack. We believed that a conventional attack of major proportions was much more probable.

But we also refused to rule out the possibility of weapons of mass destruction as we had basically a 3-year commission and wanted to explore it further. We did say that we thought there was a need for a national strategy.

In the second year when we reported in December 15, 2000 we did probably our most important policy work. At that time we reminded all authorities there needed to be a national strategy. We proposed the creation of a national office in the Office of the President to create such a national strategy. We defined that national strategy as not being Federal, but instead being Federal, State, and local all together.

We were concerned about the issues of intelligence. At that time we recommended tossing out the rule that said that the CIA could not recruit bad guys overseas as being a fairly ridiculous rule. We recommended and pointed out the concern about stovepiping and the fact that intelligence was not being shared laterally across Federal agencies, and was absolutely not being shared vertically between Federal, State, and local authorities.

In the third year, our closing year, we focused on certain areas where we thought the national strategy could be furthered by the work of the advisory panel, and that included health care, the concern about border controls, the use of Federal and locals, the use of the military and areas like that.

Now we were basically done about the first week of September and sent the report off to the printer and got ready to go out of business a little early in October when the September 11 attack occurred. At the time, the Congress extended our commission 2 years. So we have finished our fourth report in December 15 of this year. This is our fourth report which we have submitted to the members of the Congress, the Senate and the House, and to the President. In this fourth report we go over a number of key issues. My admonition to the panel has been to try to stay ahead of this debate

so that we could be of useful advice to the Senate and to the House. I think we have done that. I think we have stayed ahead of the debate as we have gone along.

I might point out several crosscutting issues in the fourth report that I want to emphasize. Of all of our analysis, the crosscutting issues we have tried to emphasize is the importance of the civil liberties of the American people, because we are deeply concerned that we will overreact and fix problems structurally in such a way that we will imply dangers to the civil liberties of the American people.

The second is the importance and the value of the State and local authorities, their need for funding, financing, strategizing, and exercising.

The third is the implications of the private sector and the fact that most critical infrastructure is in the hands of the private sector, and the need to find a method by which the private sector is drawn in.

And then fourth, intelligence, and the concern of all these crosscutting issues.

Senators and Madam Chairman, the fourth report focuses on a broad range of areas. These are comprehensive reports, each of them that have come forward. They are extensive and detailed in a broad range of areas as I have laid out. The fourth report—I will just focus for a moment on the National Counter Terrorist Center that we proposed.

On the intelligence section of this commission's report we expressed and focused our attention on the intelligence area. We saw a need for a fusion center. We have recommended it as the National Counter Terrorist Center. We called it the NCTC. Everybody in Washington has acronyms. That was ours. We recommended December 15 of this past year that there needed to be a fusion center to draw together information.

The President announced in his State of the Union address the Terrorist Threat Integration Center (TTIC), which seems to be a parallel concept. We congratulate the President on his initiative. We believed in our recommendation that it needs to be a standalone agency. We spent the better part of the year discussing the issue of whether it should be in the Department of Homeland Security or in another agency. We recommended that it be in no other agency or department; that it be a stand-alone agency, an independent agency like the EPA or FEMA or the General Services Administration.

We recommended that the head of it be with the advice and the consent of the Senate. This parallels the recommendation that we had on the Office of Homeland Security in the year 2000 where we recommended that it be at the advice and consent of the Senate in order to make the national legislature a full partner in all of these processes in the Executive Branch.

We recommend that it not be in the Department of Homeland Security because the customers of this new agency, this new fusion center will not just be the Department of Homeland Security, but in addition, the Department of Justice, the Health and Human Services, Departments of Defense, State, and Agriculture. We be

lieved that this structure of independence would make it a better and honest broker than having it in one particular department.

We see the need for the States and localities to be tied in, and that this creates a vehicle for the fusion of information with the States and locals also, which is, by the way, where a broad mass of the information on law enforcement issues across this country is located. The Federal Government is poorer if they do not have the benefit of that information, and the States and locals are surely poorer if they do not have the benefit of the national collection information that is at the Federal level.

The information we have is that it is still not a two-way street in terms of information going up and down the line between Federal, States, and locals but it is improving. In fact I had a meeting with Admiral Abbott, the President's homeland security adviser and they are instituting processes to facilitate that type of information.

Ladies and gentlemen of the Senate, within our commission this is not controversial. This was, other than the fact that we debated some of the structural issues, the creation of a fusion center was easy; not a controversial proposal. I will not dwell on it, but I will point out that our commission, on the other hand, addressed the issue of the collection function, the gathering of counterintelligence information in the homeland. This was highly controversial within our commission. That debate is set out in its entirety in the report. There was a strong debate about whether or not to rely on the FBI to continue this counterintelligence function or whether a new organization should be set up. The debate was quite intense, quite a long discussion. I personally believe that we should require the FBI to carry out this function in its most effective way and hold them strictly accountable and build on their processes. That_view was rejected by the commission. The commission has instead recommended very strongly that there be a new agency for the collection function here in the United States; a separate organization. I can discuss that in more detail as necessary, though it is not strictly, Madam Chairman, the subject of your discussion today.

We did in our report recommend that the Congress must concentrate its oversight function. That it is too disparate. We have been saying it for years and continue to say it. We believe that the oversight function for this fusion center should be concentrated in the Intelligence Committees of the two houses.

We do see this as different from some of the other proposals that are similar that have come forward. Senators Graham and Edwards have each suggested a fusion center also, although I believe they place it within the Department of Justice. Also there have been some suggestions that the intelligence gathering organization would look like the British MI5. We believe that while it is a similar concept, the American system probably would not tolerate a British organization quite like that.

We believe the Department of Homeland Security should have the authority to directly levee intelligence requirements on this new fusion center. That is our recommendation. And we recommend that the Senate and House strongly urge or require the Attorney General to gather together all legal authorities in this country, which at this point are disparate and confused and mis

understood in broad measure, in order to make sure that everybody knows what everybody is doing and what they should and should not do, so we make sure that we protect the liberties of the American people.

That I think, Senator, sums up your official advisory panel's recommendations. We are here at all times, naturally, at your disposal to continue to provide advice and counsel.

Chairman COLLINS. Thank you very much, Governor.

I was very pleased to hear your emphasis on protecting the civil liberties of the American people as we seek to have that organizational structure that will allow us to do a better job of connecting the dots. The administration is not planning to submit legislation to create the new center. Do you think it would be advisable for Congress to legislatively create the center in order to have the kinds of legal protections to ensure that civil liberties are not infringed upon?

Mr. GILMORE. It would depend upon the way that the Senate and the House decided that they wished to define this. It is clear the administration believes that they have the administrative authority to, as Senator Rudman says, to create a joint venture and bring these organizations together. I suspect that what is at work here is an effort to try and experiment with this, and to draw together the people into one located place, as opposed to going into a legislative process at the beginning, which then at that point involves a great deal of bureaucracy and setting structures into place by statute. My suspicion at this point and belief is that the administration thinks that they would like to try it administratively, see how well it works. Then I would think at that point the option would be open to the President and the Congress to more institutionalize it by statute.

Chairman COLLINS. You mentioned in your testimony that you did not think that this new entity should be part of the Department of Homeland Security because DHS will be a customer of it. You also said the commission recommended that it be a separate entity. What do you think of the President's plan to have the entity reporting directly to the CIA Director.

Mr. GILMORE. That is a very interesting concept. I have been trying to analyze that as I have thought about it and I am aware of the Senate's concern about it.

I believe that the commission's feeling would be that we strongly approve of the separation of the CIA's function and to not try to turn them into a domestic intelligence gathering organization. I do not know though that the reporting to the Director of Central Intelligence, who I think at the inception of his position was designed to be a gatherer of information in one place, would necessarily cross that line. Just because the Director of Central Intelligence is aware or is in a supervisory capacity for the fusion center does not necessarily mean that would then implicate the CIA with activities within the homeland.

But there is, of course, this outstanding issue of how do you gather counterintelligence information in the homeland. But I do not think there is any proposal that the CIA should cross that line, but I do not think that reporting to the Director of Central Intelligence would cross that line.

Chairman COLLINS. Thank you.

Senator Rudman, you are very familiar with the Counter Terrorist Center that already exists within the CIA, and indeed, last year at a hearing Director Tenet described the Counter Terrorist Center as being created to "enable the fusion of all sources of information in a single action-oriented unit." Do you see the President's proposal for a Terrorist Threat Integration Center as duplicating the work that is already being done at the Counter Terrorist Center at the CIA, or do you see it as adding value and an improvement over what we have?

Mr. RUDMAN. Madam Chairman, I think it is a broadening of that concept by bringing more people into it in larger numbers. That is essentially, as I understand it, unless it has changed in the last year, FBI, ČIA, and a few other people. This involves a lot more than that. This involves those two agencies plus a number of other places such as State, such as all of the DOD agencies which are not all contained there now. So I think it is a broadening.

My understanding is that they are going to try to co-locate that with this new TTIČ. That is my understanding, because they believe that the functions will be complementary. I agree with Governor Gilmore when he said that they are working their way through to find out how this will finally look. It well may be that a year or two from now you might want to create a whole separate unit.

I think right now the administration feels, because of the criticality of the information we are trying to put together, that we ought to take the corporate model and have a joint venture, or if you will, take the model of DOD when they have got an action that is going to take place in a place that requires Army, Navy, Marine Corps, and Air Force and put together a joint task force to accomplish a particular mission. I think that is the concept here. So, no, I do not think it is a duplication. I think it is a broadening and probably an improvement.

I want to make just one comment that is kind of tangential to your question. I understand the Gilmore Commission's position. It is a terrific report and I have followed their work very closely. I think you have got to think long and hard when you start separating collection from analysis. That's the problem I had with their proposal. There have been debates within the Gilmore Commission about that. I do not know how Jim personally feels about that, but as we go down the line here we know that the TTIC will do no collection. We know collection will stay exactly where it is now.

The question then becomes, if you were to legislate and create a separate unit with a Cabinet-confirmed officer for a national threat integration department, the problem I have with that is, and knowing this government as I know it, at that point they are separated from the people who do their collection. I just wonder, knowing what we know over the last 20 years, how much attention the FBI and the CIA pay to people, who even though they are mandated by law to do a particular job, are not part of their own team. The advantage of the joint venture is that you have got everyone there in line authority to the people who run the key agency.

So it is an interesting proposal. I think you would have to give a lot of thought to separating collection.