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the law enforcement community; intelligence agencies must function more closely as a "community." There was insufficient central authority and too many administrative barriers that impeded cooperation.

The process for allocating resources to intelligence agencies was severely flawed. Work forces were not aligned to needs. Multiple personnel and administrative systems were inefficient, and modern management practices needed to be utilized. And finally, the confidence of the public in intelligence matters needed to be restored.

In 1996, the House Select Committee on Intelligence conducted a review of the Intelligence Community and published a staff study. Its key findings included: The Intelligence Community would benefit greatly from a more corporate approach to its basic functions—for example, stronger central management, reinforced core competencies and collection, analysis and operations, and a consolidated infrastructure.

The DCI required additional authority to manage the community as a corporate entity. There was little collaboration between collection agencies and all-source collection management. And the National Security Act and existing executive orders were sufficiently flexible to allow improved cooperation between law enforcement and intelligence without blurring the important distinction between the two.

General William Odom, one of our witnesses this morning, authored a report in 1997 entitled “Modernizing Intelligence: Structure and Change for the 21st Century." The report included the following observation. “No organizational reform can overcome the absence of effective leadership and management, but dysfunctional organizational structure can neutralize the efforts of the best leaders.'

The report also included the following recommendations: Strengthen the role of the National Intelligence Council in providing unique national-level analysis and overseeing analysis and production throughout the Intelligence Community; separate the Directorate of Intelligence from the CIA and subordinate it to the DCI through the NIČ, require the DCI to conduct a structural review of the Intelligence Community every five years; restructure the CIA by giving it two major components——the National Clandestine Service and a component for handling overt human intelligence; designate the director of this restructured organization as the national manager for HUMINT.

In 1998, the Jeremiah report focused on the Intelligence Community's performance relating to India's testing of nuclear weapons. The report's author, Admiral David Jeremiah, noted publicly that the findings included "failures in imagination and personnel, flaws in information-gathering and analysis, and faulty leadership and training."

In 2000, the National Commission on Terrorism, led by Ambassador Paul Bremer, found that, among other things, the FBI,

which is responsible for investigating terrorism within the United States, suffered from bureaucratic and cultural obstacles to obtaining terrorism information.

The Department of Justice applied the statute governing electronic surveillance and physical searches of international terrorists

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in a cumbersome and overly cautious manner. The risk of personal liability arising from actions taken in an official capacity discouraged law enforcement and intelligence personnel from taking bold actions to combat terrorism.

The U.S. intelligence and law enforcement communities lack the ability to prioritize, translate and understand, in a timely fashion, all of the information to which they have access. And the law enforcement community was neither fully exploiting the growing amount of information it collected during the course of terrorism investigations nor distributing that information effectively to analysts and policymakers.

Among that commission's key recommendations were the following: The Attorney General should ensure that the FBI is exercising fully its authority for investigating suspected terrorist groups or individuals, including authority for electronic surveillance. Funding for counterterrorism efforts by CIA, NSA and FBI must be given higher priority. And the FBI should establish a cadre of reports officers to distill and disseminate terrorism-related information once it is collected.

Earlier this week, former Virginia Governor James Gilmore testified in great detail about the work of the Advisory Panel to Assess Domestic Response Capabilities to Terrorism Involving Weapons of Mass Destruction. Chaired by Governor Gilmore, the panel made a number of recommendations in 2001, including: Increase and accelerate the sharing of terrorism-related intelligence and threat assessments with state and local governments; ensure that all border agencies are partners in intelligence collection, analysis and dissemination; and increase and accelerate the sharing of terrorismrelated intelligence and threat assessments among federal agencies.

Finally, in July of this year, the Subcommittee on Terrorism and Homeland Security of the House Permanent Select Committee on Intelligence, led by two members of this joint inquiry, Representatives Saxby Chambliss and Jane Harman, published the results of its year-long review. Among other things, the Subcommittee recommended that steps should be taken to ensure human collection remains a central core competency, improve watchlisting and language capabilities, ensure that consumers receive the most reliable reporting, and that sufficient analysis is applied, and share information more completely.

In sum, those are but a few of the many, many findings and recommendations that have resulted from many months of study and focused deliberation on the performance of the Intelligence Community. While there has been a plethora of recommendations for reform over the years, many of the most far-reaching proposals have not been acted on to any significant degree, particularly in the area of organization and structure. The tragedy of September 11 may at long last serve as the catalyst for action to implement meaningful and sustained reform within the Intelligence Community. We are hopeful that this joint inquiry will make a substantial and constructive contribution toward that end.

Thank you, Mr. Chairman. That concludes my statement this morning.

Chairman GRAHAM. Thank you very much, Ms. Hill. I would now like to introduce the members of our panel.

Mr. Lee Hamilton served in the House of Representatives for 17 terms, from 1965 through 1998. During the course of his outstanding service, he chaired, among other Committees, the House Permanent Select Committee on Intelligence, the House IranContra Committee, and the House Foreign Affairs Committee. He is currently director of the Woodrow Wilson International Center for Scholars.

Judge William Webster, after service on the federal district and appellate benches, was the Director of the Federal Bureau of Investigation from 1978 to 1987, and the Director of the Central Intelligence Agency from 1987 until 1991. He recently chaired a Justice Department commission that examined FBI security programs in light of the espionage of Special Agent Robert Hanssen. Judge Webster now serves as a member of the President's Homeland Security Advisory Board.

General William Odom served as Director of the National Security Agency from 1985 to 1988. Prior to his tenure at the NSA, he served on the staff of the National Security Council during President Carter's administration, and then as assistant chief of staff for intelligence in the Army. General Odom is currently Director of National Security Studies at the Hudson Institute.

Frederick Hitz has served as a CIA operations officer and as director of legislative affairs at the CIA and the Department of Energy. In 1990, he was appointed as the first statutory inspector general of the Central Intelligence Agency, a position in which he served until 1998. He is currently a lecturer of public and international affairs at the Woodrow Wilson School at Princeton University.

To each of our distinguished panelists, I would like to extend our warm welcome and appreciation for your participation in this important endeavor as well as a lifetime of service to America.

Each of our committees has adopted a supplemental rule for this joint inquiry, that all witnesses will be sworn. I ask our witnesses if they would please rise at this time.

Please raise your right hand. 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?

Mr. HAMILTON. I do.
Judge WEBSTER. I do.
General ODOM. I do.
Mr. Hitz. I do.

Chairman GRAHAM. Thank you. The prepared testimony of each witness will be placed in the record of these proceedings. I will now call on the panelists in the order in which they were introduced. First, Congressman Hamilton.

[The prepared statement of Mr. Hamilton follows:)

Testimony of the Honorable Lee H. Hamilton

Before the Senate Select Committee, House Permanent Select Committee on

lotelligence
Joint Inquiry into events surrounding September 11

October 3, 2002

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Chairman Graham, Chairman Goss, Ranking Member Shelby, Ranking Member Pelosi, Members of the Joint Committee -- thank you for giving me this opportunity to testify before you today.

First, let me commend you for the work that you have done and for holding these hearings. You have illuminated the concerns of the nation about the events leading up to September 11, made constructive improvements in our intelligence community, and pointed the way towards further improvements.

I believe that congressional oversight of intelligence is a unique and important responsibility – the intelligence community needs strong, vigorous and thorough oversight that is independent of the executive branch. Only the Congress can provide it, and you have.

Importance of Good Intelligence

Good intelligence is essential to our national security.

We learned on September 11 that having good intelligence is as vital as it has ever been. Intelligence is the most important tool that we have in preventing terrorism, and a crucial component of our efforts to curb weapons proliferation. Policymakers simply must be able to trust that they have good intelligence as they deal with new threats – good intelligence does not guarantee good policy, but poor intelligence does guarantee bad policy.

Difficulties for the Intelligence Community

The demands on the intelligence community are huge and growing.

There are currently unprecedented demands on the intelligence community at a time when technology permits the collection of unprecedented amounts of raw data. The challenge facing the intelligence community is sifting through huge amounts of information, coordinating different agencies, and getting the right information to the right person at the right time.

Since the end of the Cold War, the dangers of international terrorism and weapons proliferation have confronted the intelligence community at a time when resources for human intelligence have decreased and priorities have been reassessed.

Need for Improvement

Currently, our intelligence capabilities are very good, but there is room for improvement.

The people working at our intelligence agencies are highly talented and dedicated to their work and country. They are called upon to do a difficult, and sometimes dangerous job, with the knowledge that good work will rarely receive outside recognition.

We have seen some spectacular intelligence successes, but we have also seen spectacular failures. Thus, it is important that we reform the intelligence community so that it is better prepared and equipped to face new and developing threats.

Reform

I am aware that too much or too little effort can be put into reform.

Too much reform can lead to spending so much time rearranging boxes that you lose sight of the mission. Too little reform can occur if key weaknesses are not addressed.

I do not favor radical change in the intelligence community, but I will suggest several reforms that would address key weaknesses in our intelligence community. I favor:

-- putting one person in charge of our intelligence community,

-- improving coordination among agencies and cooperation with foreign governments,

-- establishing a statutory foundation for the intelligence establishment,

-- increasing resources,

-- hiring more spies and expanding the talent pool,

-- increasing public understanding of the intelligence community,

-- and setting clear priorities.

I understand that several of the reforms that I will mention are already underway my comments will re-enforce these efforts.

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