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Both agencies will have to fundamentally alter the way they do things in order to work together effectively. The FBI, with its new emphasis on prevention, will have to focus more on counter-terrorism, and the CIA will have to trace international leads to the homeland. Most important, the two agencies will have to share information and work together to infiltrate, disrupt and destroy terrorist cells.

To do this we will have to improve our technology. We need better computer networks to improve the flow of information within and between different agencies. For instance, there needs to be a centralized database where individual names can be checked for relevant information.

If the shortcomings leading up to 9/11 were systemic in nature, the solution lies in better system management, the handling and analysis of vast amounts of information, and the distribution in a timely manner of the key conclusions to the right people.

It is essential that the intelligence community organize itself so that all of its resources can be coordinated and agencies aid, not obstruct, one another.

Improved Cooperation with Foreign Countries

We must also develop closer intelligence relationships with countries that can help us get critical information.

Al Qaeda has operatives working in small cells in over eighty countries around the world. Material that could be used to make weapons of mass destruction can pass through global black markets. Future threats will emerge from unforeseen and remote parts of the world.

Our intelligence community cannot be everywhere at once. Already, effective cooperation with foreign intelligence has been essential in rooting out al Qaeda in the war on terrorism - countries as diverse as Pakistan, Germany, Yemen, and the Phillipines have provided assistance.

We must continue to strengthen relationships with foreign intelligence agencies to enable us to combat transnational threats.

Increased Resources

We need to substantially increase resources for the intelligence community.

In the decade following the end of the Cold War, resources for intelligence declined by some thirty percent. I am glad to see that a renewed commitment to providing resources for the intelligence community is underway - you are to be commended for that effort. We must make a sustained effort to bolster our capabilities.

We need to maintain our technological advantage, but we also must take important steps to improve our human intelligence:

--1)We need to hire more spies.

Technology alone will not make us secure. We must make a sustained commitment to putting people on the ground who can detect and alert us to terrorist plots.

New threats demand that we abandon burdensome hiring restrictions - I understand that this has already been accomplished. We will need to work within political sects and terrorist cells in countries and remote areas where we have not had a significant presence. This may demand making some unsavory contacts in order to infiltrate and break-up terrorist networks.

I do not have exaggerated expectations of what HUMINT can achieve, especially in dealing with terrorist cells. But I do believe that we must make a greater effort.

Intelligence sometimes requires unpleasant choices and human intelligence is crucial to combating terrorism. Great caution and discriminating judgments must be made.

-- 2) We need to expand the talent pool.

We must increase the number of qualified people available to our intelligence agencies. We should invest more in language and professional training. We need people who are fluent in specific and multiple languages, and people with crucial technical skills.

I understand that this effort is also underway. No one should expect quick progress here. It takes a long time to identify and train a large number of such people.

-- 3) We need to make greater use of open-source information.

We need to develop a better understanding of foreign cultures and religions. Our intelligence agencies need to make greater use of newspapers, periodicals, satellite television, radio transmissions, Internet web sites, books, pamphlets, and religious tracts that will alert us to broad trends and patterns that are developing around the world.

For years, the open-media and educational institutions in parts of the Islamic world indicated the growing level of hatred and commitment to violence against the United States. We need to pay closer attention to what the rest of the world is saying about us.

-- 4) As we increase our resources we must be cost-effective.

Merely spending more will not fix anything. We must be sure that we are getting what we pay for and what we need for the intelligence community.

Many of the steps necessary for improving our intelligence capability are not expensive.

Improving cooperation between various intelligence agencies is a matter of organization, not spending. Improved coordination and a center for intelligence should actually cut down on excessive redundancy and needless spending.

But we have to recognize that while excessive redundancy is unnecessary, some duplication is acceptable. Competing analyses and a diversity of views should be encouraged. The environment within the intelligence community must encourage analysts to speak up so that there is a constructive dialogue within and between agencies, and whistle-blowers must be comfortable in coming forward.

The intelligence community must be held to a hard-headed cost-benefit analysis – I am not sure it always has been. There is here, perhaps more than in any other area, a decided tendency to throw more dollars - and hurriedly - at the problems.

Needed improvements in human intelligence are also not a matter of major increases in spending. Human intelligence is one of the cheaper intelligence initiatives hiring more spies and improving the talent pool are far less expensive than deploying new technologies.

If we develop an intelligence strategy based on clear priorities with a streamlined organization, we can achieve our goals while remaining cost-effective.

Respect for the Rule of Law

While advancing intelligence reforms, we must balance our need for national security with respect for the rule of law.

Reforms in the intelligence community must not come at the expense of the rule of law and respect for basic civil liberties. For instance, the coordination between intelligence and law enforcement raises important questions. Using intelligence methods must not become routine in domestic law enforcement, and the rights of U.S. citizens must be respected.

Intelligence work requires that our government obtain information, and obtaining that information requires surveillance of people who have committed no crime - the challenge is to facilitate information-gathering about suspicious people while insulating legitimate personal and political activity from intrusive scrutiny.

The U.S. intelligence agencies work within a democratic system of checks and balances. Americans want and deserve freedom and democracy, as well as effectiveness.

Congress has a major role to play in balancing the need for accountability and openness in our democracy

Statutory Foundation

We need a statutory foundation for U.S. intelligence.

U.S. intelligence is governed by a set of disparate laws and executive orders produced over the last fifty-five years. No single one of these laws provides a comprehensive legal foundation for our massive intelligence establishment. This is a remarkable state of affairs in a country that takes the rule of law so seriously.

Streamlining the intelligence community will require legislation. But we might want to go further, and try to write a legislative charter for the intelligence community. I know the difficulty of the task. Indeed, I tried to do it not once, but several times, and got nowhere. But, to me at least, it still makes sense.

Public Understanding of the Intelligence Community

We need to increase public understanding of the intelligence community.

There is much skepticism, even cynicism, about the intelligence community among the American people. It is not in our interest to let this grow, even to fester.

As much information as possible should be made public about the process, management and role of the intelligence community. Effort must be made to help the American people understand the challenges facing the intelligence community, and the manner in which those challenges are being addressed. The more the American people understand the intelligence community and the importance and difficulty of its work, the more they will trust and support the actions and policies of the government.

Politicization of Intelligence

Finally, we must be careful to ensure that intelligence is not mixed with politics. Policymakers should not use intelligence as a tool to make a policy look good - they should use intelligence as a tool to make good policy.

Because it relies so much on secrecy, intelligence fits awkwardly into an open society. Intelligence is essential to national security and secrets must be kept, but the burden is on the president and the Congress to ensure, to the maximum extent possible, that our intelligence community is held to the standards of accountability and transparency of a representative democracy.

TESTIMONY OF THE HON. LEE HAMILTON, DIRECTOR, WOODROW WILSON INTERNATIONAL CENTER FOR SCHOLARS

Mr. HAMILTON. Good morning to all of you. Chairman Graham, Chairman Goss, Ranking Member Shelby and the other members of the Joint Committee, thank you very much for giving me the opportunity to join you.

I begin with a word of commendation. I know these have been very difficult hearings for the joint committee. I want you to know that I believe, particularly in the last few weeks, you have illuminated the concerns of the nation about the events leading up to September 11. I know you've already made a number of constructive improvements in the Intelligence Community. And I think you are and will point to further improvements that should be made. I'm a strong believer in congressional oversight. It's a unique responsibility of the Congress. You're the only independent oversight of the executive, and because intelligence is such an important function of government, the role of oversight is terribly important. Only the Congress can provide it effectively, and I think you have. I will jump around in my statement. I begin with the obvious observation that good intelligence is essential to our national security. It's the most important single tool we have to prevent terrorism. Good intelligence does not guarantee good policy. Poor intelligence does guarantee bad policy.

I'm impressed by the demands that are made upon the Intelligence Community. It just seems to me they're exploding. Our technology today permits us to collect such vast amounts of information, and of course the challenge, as Eleanor Hill said a moment ago, in part is to take that information, to sift through it, coordinate the different agencies and get the right information to the right person at the right time.

Currently, I believe our intelligence capabilities are very good, but there is a lot of room for improvement. I believe that the people working on intelligence—and I've been a consumer of intelligence for over 30 years in the Congress—are highly talented and dedicated people. They are called to an extremely difficult, sometimes dangerous job, with the knowledge that good work will rarely receive outside recognition. As Senator Shelby said a moment ago, we've had some spectacular failures. We've also had some successes. But I think all of us know that we've got a lot to do to improve the Intelligence Community.

I'm very much aware that too much effort or too little effort can be put into the reform process. Too much effort can lead to spending so much time rearranging the boxes that you lose sight of your mission. Too little reform can occur if key weaknesses are not addressed. From my point of view at least, I do not favor radical change in the Intelligence Community. But I do have several reforms that I will address, and I understand that a number of these reforms are already under way, and therefore my comments will be largely to reinforce some things that have been done.

The primary purpose of the Intelligence Community is to advance the national security. There are very many important topics for intelligence to explore-economic, environmental, health concerns but as we look at how to reform the Intelligence Community, it seems to me we have to focus on the national security.

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