not share and then information does not get fused and as a result Americans are injured, then there must be penalties or sanctions connected with all that. The rules have got to be written.

And furthermore, we have not even talked about the major barrier, and that is the supreme and total distrust of the Federal Government authorities for the States and locals. The idea of sharing sensitive information with a police chief of a major jurisdiction or the governor of a State is anathema. It has to be broken through. So far efforts are being made to do that. Progress is being made, but they are trying to break a cultural barrier and it is going to require dramatic leadership at the Executive and Congressional level to make that happen.

Mr. RUDMAN. Madam Chairman, I want to add, I agree with Governor Gilmore. One of the things that I would look at if I were still on this Committee, I know the administration said lawyers from Justice and the CIA and DOD have all looked at all of the statutes and say that everything is OK, this will work. I would want to maybe have a very intensive study done of all of the statutes that involve the CIA and the FBI on privacy issues, on sharing issues and other issues, to make sure that this new center operates under not only the rules, which will be written, but the laws that exist.

Now it may well be that they are right, that they do not have a problem with the current laws, but I surely would want to take another look at that.

Chairman COLLINS. Thank you. Senator Lautenberg.

OPENING STATEMENT OF SENATOR LAUTENBERG

Senator LAUTENBERG. Thank you, Madam Chairman, and to my friend. Senator Rudman said old friend. I would say friend of longstanding because the rest is apparent. It's nice to see Governor Gilmore here. We met on TV a couple of times, had some fun.

Senator Rudman comes with a remarkable record of confidence building and leadership from his years in the Senate. Universally respected and sought after by Senators regardless of party. The work that you did on your budget initiative helped us finally get to a point where we had a balanced budget in 1999.

Mr. RUDMAN. For a little while anyway.

Senator LAUTENBERG. A little while felt awful good, but that is what happens at times. When you sit down and you have a meal, it feels good and you know later on, maybe we should not have quite done it that way. But it is a pleasure to see you here, both of you, having left office formally and being called upon.

Now I was never called upon to add my service so I decided I better run again and here I am, and glad to be here and to try and help solve some of the problems that we are having. The enormity of problems has grown in these couple years and I do not think it has anything to do with my departure from regular service, but the fact is that matters and life have become far more complicated. The horrible benchmark of September 11 has left a permanent impact almost no matter what we do.

I wonder, Senator Rudman talked about, described a joint venture. When I was a CEO of a pretty good-sized company I liked joint ventures as long as we owned the joint. I think we have some

what that problem here in government. To me, the best way to get an understanding of effective participation with an agency is the simplest way. I think you have talked about it, Governor. The fact is that you have to reach into these sources of trained people. Frankly, I would have hoped that between the FBI and the CIA that a task force of sorts could have been created with the authorities as delineated, to get the job done. Because one of the things that seems to be happening is we are adding-I do not want to sound critical, but we are adding acronyms because we are adding organizations and yet we still have that feeling of discomfort.

I can tell you this, that the kaleidoscope of color that we use to warn people is just scaring the hell out of a lot of people. And yet we have an obligation to say, life is not exactly as it was and you have to be especially careful. But that muddle of things really worries me because there is no confidence yet.

I respect the President's initiative here, and to think that this problem could be solved immediately and create this giant department, jurisdictions overlapping all of that kind of thing. I am very involved with the Coast Guard and I was on Intelligence after Senator Rudman left, and Defense Subcommittee on Appropriations. There is conscientious leadership there, but the fact of the matter is that to have this large safety net with the holes in it that we ultimately saw is a shocking thing. We cannot go back retroactively to pre-September 11 and say, should have, could have, would have, I think that is a dangerous and insignificant review.

But where we are now, still with people wondering who is where the fact is that I hear from local law enforcement people, they are groping for information, searching for ways to be included in the loop. That has got to be a large part of the solution to the problem. That is to be able to get this data out to the communities out to the States so that they feel like they can do something significant if an alert does come.

So I supported the idea of the integration center, the fusion as you call it, Governor Gilmore, center where the data are collected in one place. But I for the life of me still have a problem trying to figure why we cannot, within the existing structure, create the mechanism to solve the problem. Should this be a direct NSA report or something like that? How does it get to the President? Does the President have at his daily briefings a review of terrorist activity? Or is it immersed in this whole melange of things that he has to be concerned about?

So I am not offering much by way of advice except to say that if we could only get this housed, done within the structure that we have, trained people, people who have knowledge and have a place out gathering data, and do it that way instead of creating a whole new structure because we cannot get through the bureaucracy. [The prepared statement of Senator Lautenberg follows:]

PREPARED STATEMENT OF SENATOR LAUTENBERG

Madam Chairman, I'm glad you recognize the importance of holding a hearing on the "Terrorist Threat Integration Center" (TTIC) the President has proposed.

Let me first welcome and thank the witnesses for coming today, and giving us the benefit of their expertise on this issue. Senator Rudman and Governor Gilmore have provided a great service to the nation. Their efforts to identify and alert us

to terrorist threats and provide solutions to the vexing problem of defending ourselves from terrorist attacks are much appreciated.

Jeff Smith and James Steinberg have wide experience in dealing with our national security agencies and I look forward to hearing their insights on what this new Terrorist Threat Integration Center's role should be.

Madam Chairman, I'm disappointed the administration did not send a representative to inform us about its plans for this new Center. We need clarity and leadership from the administration on this question and, with all due respect to the President and Governor Ridge, we are not getting it.

What do I mean by this?

In the wake of September 11, it rapidly became apparent that an inability or an unwillingness of the intelligence community to share information played a role in our inability to prevent the attacks.

There was a reality that there wasn't any single agency responsible for gathering, analyzing, and disseminating the information in a way to prevent and counter terrorist attacks.

Many felt the creation of the Homeland Security Department would solve this problem. The notion was that the President would be briefed on potential terrorist attacks by the Secretary of the Homeland Security Department.

Well, we have created the Homeland Security Department. But we still have the CIA's Counter-Terrorism Center. We have the FBI improving its intelligence capability. And now we have this new Terrorist Threat Integration Center.

I think that the responsibility for determining the terrorist intelligence picture is becoming murkier, not clearer. Rather than reducing the number of agencies and bureaucracies with responsibility for this problem, they are proliferating: CIA, FBI, CTC, DHS, TTIC, etc. and so on.

We are not "connecting the dots," we are multiplying them.

I must also express some wonderment about how this whole process is unfolding. This new Center has been created by the President outside the Homeland Security law. It would have seemed more logical for the President just to create this Center or something similar within a short period following September 11. If this has been an urgent problem, why did we wait for well over a year to create it? If the only question involving improving our intelligence processes was to beef up the CIA's ability to do so, which could have been done shortly after the September 11 attacks, why did we go through all the trouble and disruption of creating a new Department of Homeland Security?

Between the proliferating number of agencies and the kaleidoscopic color scheme of threats, I worry that we are spreading fear and near panic in the country without materially advancing the protection of the nation from a terrorist attack or raising the comfort level of our citizens.

We now have the Homeland Security Department and the TTIC. Since I doubt we will dis-establish either, we must find a way to make them work together.

I look forward to hearing from these distinguished witnesses. I hope they will be able to indicate to us that things are getting better on this front-and, if they are not getting better, what can we do to improve the situation.

Thank you, Madam Chairman.

Mr. RUDMAN. Senator Lautenberg, let me just respond this way. I think that is what the administration is attempting to do. Now people may disagree with the form, but what they are essentially doing is saying we have had analysis of terrorism within the FBI, we have got analysis within the CIA. Most of the information that we get is foreign so the CIA is tasked with evaluating it and doing the analysis. But we have got all these other parts of the government that pick up bits and pieces, so rather than try to exhort people within the current boxes to do what they are doing, put together a joint venture, if you will, and have it report to the Director of the CIA, which answers your question, how does the President get informed? That is how he gets informed. He meets with the Director of the CIA, I am sure you know, mostly every day. This will be a major part of his reporting.

Now under Governor Gilmore's plan it would certainly work. The difference would be that the director of that fusion center would have a separate reporting line to the President. We do not have to

argue that here, but the concept-the only difference between the two ideas is one is independent and one is not. The basic reasoning and the need we all agree on. The administration has chosen to do it in a so-called joint venture. My view is that it is better to do that way than to try to do it within the current structure of the CIA and the current structure of the FBI, to try to move all of the people dealing with domestic terrorism based on foreign and domestic intelligence into one place. That is what the fusion center proposal was, so we do not really disagree on the need. We only disagree about the modality.

From your comments, I would think you would probably oppose the creation of a new department. That is their proposal, and it is a very sound proposal. But there is room for reasonable people to disagree.

Mr. GILMORE. A new agency. We did not even recommend the Department of Homeland Security.

But with respect to, I think the answer that I would want to provide to you, Senator is this. You have got to identify the problem. We have taken a lot of time to try to think through what the problem is, under no pressure from anyone. We have tried to think about this. The problem is that you just cannot find a vehicle in the present structure of government in our Federal system that is in a position to gather together Federal overseas information, domestic information, human intelligence, signal intelligence, State, locals, private people, private enterprise. There just is no vehicle for that. There is a vehicle for intelligence to be gathered and the President certainly receives his daily briefing every morning. There is no doubt about that.

But then as you analyze the problem that we saw in the past, it is not only that there is no vehicle for gathering up all that information, but that there are institutional and cultural barriers to the complete sharing. This is designed to be a vehicle to overcome those problems. It does not solve all problems, and it even creates new ones with additional bureaucracies. But this is the best solution that we can come up with balancing all the different pres

sures.

Senator LAUTENBERG. I thank you both. Madam Chairman, we are developing our mandate here, and that is, as you said, write the rules and decide how it ought to be. This is a very helpful discourse and I thank you.

Chairman COLLINS. Thank you. Senator Pryor.

OPENING STATEMENT OF SENATOR PRYOR

Senator PRYOR. Madam Chairman, thank you. I want the record to reflect that my father never ran against Senator Rudman. I am glad he did not. He is glad he did not, but he does send his greetings. It is good to see you again.

Mr. RUDMAN. Thank you very much. I appreciate it.

Senator PRYOR. Let me ask both of you a couple of big picture questions. How many employees are we talking about being necessary once the Center is fully operational?

Mr. RUDMAN. I think it is a better question when you have the administration witnesses. My understanding is it is going to be started in phase one with probably under 100, mainly analytical.

They will stage it on the basis, if you grow it too fast it will not grow as efficiently as it should. My sense is you are talking hundreds rather than thousands when they finally get to the final stage of where they want to get, which on my information is probably 3 to 4 years out.

Senator PRYOR. Do you agree with that, Governor?

Mr. GILMORE. Our commission has attempted to lay out what we think the issues are, the challenges are, and the best solution. To then place ourselves of the administrative people who would design the specific number of hirees to do the job, we have not presumed to do. So the short answer is that we believe there needs to be a fusion center to gather this information together, and I am sure that the appropriate Executive Branch people who would come forward with a proposal to the Congress would lay out how many people they think they need to get the job done.

Senator PRYOR. Will this joint venture have its own budget or will the personnel, location, and overhead, be absorbed in other agencies' budgets?

Mr. GILMORE. We recommend that it has its own budget in order to continue to provide that type of independence, Senator. But the question of how you would actually fund it is an appropriations issue; a proposal from the Executive Branch and an appropriations issue from the Senate. We would not be surprised if you were to move funding for the analysis function from the different agencies into the new agency in order to begin its funding. But since it is an independent agency we believe it should have its independent appropriation.

Mr. RUDMAN. Senator Pryor, the administration's proposal as I understand it does not require a separate budget because it is not doing what the Gilmore Commission has recommended with an agency. It is essentially going to take people who are currently on the payroll of these various other agencies, co-locate them in one place, and make contributions to overhead.

Now as a practical matter, although many of them will be moving to a different location doing the same job and getting paid the same amount of money, inevitably there will be more money involved and I assume that will appear in the budget for the respective agencies who will make a contribution. That is the way the appropriation process normally works.

Mr. GILMORE. It does however raise an issue. If you co-locate people in that manner one might ask the analyst who he works for. I think his answer would be what everybody in the world would answer, the guy who writes my paycheck is my boss. Therefore, the fusion center will really not have employees under this proposal. That will create a management challenge, but I believe that there is a sense that once identified that the heads of the CIA and the FBI will be in a position to provide that management. But I think I have identified the management challenge to you.

Senator PRYOR. I agree, I think it is a challenge. However, I think we can overcome it. It seems like something we can work through and work out and come up with a very positive management structure and accomplish the mission.

I am aware you have a joint venture here where the employees come from different agencies. I am assuming that the creation of