Although some thought the Hart-Rudman report was a little too much at the time, you have certainly been vindicated, it seems to me, with what you decided and what you recommended to us. Both of you have done excellent work and I really appreciate it. Of course, I appreciate Mr. Walker and the continual service he gives to our country.

Senator Rudman, I believe that in your testimony before the Governmental Affairs Committee last week you suggested that separating the Immigration and Naturalization Service's various functions could reduce its effectiveness in enforcing our immigration laws and facilitating immigration services.

Do you believe that this administration's proposal to transfer INS in its entirety-I don't know if the distinguished Senator from California has asked this question, but I wonder if transferring it in its entirety and including it under the umbrella of the Border and Transportation Security Division is the proper approach.

Could you see any benefit to transferring INS in its entirety as a separate fifth division rather than making it part of the Border and Transportation Security Division in the new Department of Homeland Security?

Mr. RUDMAN. Senator Hatch, it is a pleasure to see you this morning. We did a lot of work together over the years.

Senator HATCH. That we have.

Mr. RUDMAN. I must tell you that we labored over that particular issue for some time, and you will note our proposal does not include the INS. That is not to say it shouldn't be included. I will tell you that we decided, for a lot of reasons, that we would take the Border Patrol, which is, if you will, the uniformed part of INS, and we would move that to a purely law enforcement function. We came to the conclusion that we would try to keep our recommendation very focused, as Mr. Walker has said.

Now, having said that, I think, listening to Governor Ridge and his testimony before ours last week, before the Governmental Affairs Committee, that he makes a strong case. In order to secure the border, you have got to have the people who oversee immigration report to the same person and have the same intelligence and the same information technology.

It may well be that part of it ought to be left where it is. I just don't know the answer to that question, but I can tell you that our Commission, after three-and-a-half years, decided not to transfer it. We just thought it would probably better be left where it is. But I would hasten to add, Senator Hatch, that it surely needs reform. It needs reform to be brought into not only the 21st century, but also into the 20th century in terms of technology.

Senator HATCH. Well, you have suggested that the collection and analysis of intelligence information should be kept separate from the policy decisionmaking process that results from the collection and analysis of intelligence information.

Do you believe that the administration's current proposal would achieve the separation you recommend?

Mr. RUDMAN. I believe so, because my understanding is that there is no collection in this new agency, nor should there be. I mean, to set up a collection regimen, as the Chairman or anyone

else who serves on the Intelligence Committee knows, is enormously complex.

We already have very good collection. What we probably need is a very good analysis unit that can work with other analysis coming out of all-source analysis at the agency and the FBI. By the way, we did not recommend quite what the President did in terms of an intelligence analysis unit, but I think it probably is a very sound idea.

The other interesting idea-you may have read in the paper that one of the foremost scientific organizations in the country has proposed that there be a homeland defense institute of technology to work on the technology that must be developed to protect our borders-a very interesting proposal. Query: Where does that belong? So you have got your plate full. In addition to the President's proposal, you have got our proposal, others that are being made, and, of course, the work that the Gilmore Commission did.

Senator HATCH. Your Commission emphasized the importance of including the National Guard.

Mr. RUDMAN. We did, but not in the Homeland Security Agency. What we said, Senator Hatch, was that

Senator HATCH. Can you tell us a little bit of how you think it would function under the administration's proposal?

Mr. RUDMAN. They are doing the Guard separately. Our proposal is that the National Guard be duly trained as a first local responder in the event of a major disaster in a major area. They are first-rate people. They are highly motivated, and they do a great job. They have a combat support role, but we believe they ought to have a secondary role. My understanding is, that is under active consideration.

Incidentally, Senator Hatch, we also recommended the creation of a commander-in-chief for homeland security at the Pentagon, CINC North, if you will, which Secretary Rumsfeld has now implemented.

Senator HATCH. Governor Gilmore, I believe we all agree that in fashioning an overall national security strategy that we have to tap into the resources and expertise of the private sector. Private businesses own and operate most of our infrastructure, our telecommunications, energy, financial systems. So input from the private sector is essential to arm our agencies with the best technologies available.

You mentioned in your written testimony that your Advisory Panel intends to consider ways to better integrate America's private sector. Recognizing that this is an issue you have just recently begun to consider in depth, do you have any immediate suggestions as to how we can further this goal as we consider the administration's proposal?

Mr. GILMORE. Senator Hatch, the challenge, it seems to me, is to find the right model to make sure that the private sector is appropriately at the table in terms of planning and coordination of the national strategy.

This is not easy. The design of a national strategy is difficult enough as it is. We have great confidence that the Ridge office is going to bring forward a good national strategy, but then the question is what mechanisms can get the private sector involved.

It is very challenging because there is really not a market solution to this. It is very difficult in defense preparation to use market forces, but there are two that I can think of.

One is that there is a frenzy right now to sell products, and people want to offer their products and offer their systems as part of the national homeland security strategy and they are dying to find ways to make their case as to why this would fit into the national strategy. So that is a market force that actually might work to our benefit as people have the opportunity to make their case, and a mechanism needs to be found to do that.

The second is that there is a defensive position for the private sector that is a very serious one, and that is that they themselves must do something to protect their critical infrastructure and their continuing operations and their information technology systems. Failure to do that exposes them under the civil liability system, and creates therefore serious market and legal reasons why they must, in fact, come to the table and cooperate.

The challenge, though, is not so much the creation of those market forces which I have just articulated; they are there. The interesting question is how do we put into place the ability to coordinate them with a Government operation which is entirely different from the private sector. Probably the best way to do that is to create some councils and some strategic thinking types of organizations. But this is a real management challenge and a serious issue.

By the way, in terms of the actual homeland organization itself, one of the management challenges is the ability to get information through a large bureaucracy like the one that is being suggested, and that will require very careful implementation and structuring as the Congress goes forward.

Senator Feinstein, you raised the issue in your opening remarks about how INS didn't get the word and sent out visa approvals very late in the game after the incident had already occurred. There is no blame here, it seems to me. This is simply the process that occurs of large bureaucracies set up in large, difficult structures. The management challenge here is to find a way to make sure that this is streamlined in a way and managed in a way to maximize the passage of information up and down the line.

Senator HATCH. Madam Chairperson, I know my time is up, but could I ask one question of Mr. Walker?

Chairperson FEINSTEIN. Certainly. If Senator DeWine doesn't mind, I certainly don't.

Senator HATCH. Do you mind, Senator DeWine?
Senator DEWINE. NO.

Chairperson FEINSTEIN. Go ahead.

Senator HATCH. Thank you, and I also want to thank you very much for this hearing. I am going to be watching and reading all of the record here today.

I just have one question for you, Mr. Walker. Your testimony contains an in-depth discussion of the Federal Government's role in preventing and protecting against terrorism. Could you elaborate a little bit more on the role you believe the Federal Government should assume in interacting with and supplementing efforts of State and local governments, non-governmental organizations, and the private sector?

Mr. WALKER. As Governor Gilmore has mentioned, in order for us to be successful in this effort to try to protect our homeland, it is going to take the combined efforts of a variety of Federal Government entities, State and local government entities, as well as the private sector and NGO's.

We have found in the dealings that GAO has had in doing work in the area of homeland security over the last several years, including the last year, that there has been a fair amount of frustration on behalf of State and local government officials and private sector officials at not being able to play as interactive and constructive a role as they would like to in trying to help define the national strategy and in trying to understand what the appropriate division of responsibilities would be.

So that is why I think it is important that we not just focus on this Department of Homeland Security, which is to a great extent more the operational aspects of it, but also focus on this national strategy which is going to come out of Governor Ridge's office, I would imagine, in the near future, and making sure that all the key stakeholders are buying into that national strategy in order to be able to effectively implement it.

Senator HATCH. Thank you.

Chairperson FEINSTEIN. Thank you.
Senator DeWine?

Senator DEWINE. Thank you, Madam Chairman.

Let me thank all of you for being here. Mr. Gilmore and Senator Rudman, your reports are certainly very, very helpful. Mr. Walker, I look forward to having the chance to fully read your recommendations and, your warnings about the perils that lie ahead of us.

Senator Rudman, you pointed out in your testimony that while the President's proposal to some extent mirrors what you recommended, there are some differences. But you also pointed out that this does not solve all of our intelligence problems.

It seems to me that we face a very difficult job here in this Congress and in our country-how to move forward with the homeland security proposal, while at the same time trying to deal with our intelligence issues, our FBI issues, our CIA issues.

I just would like to know, in the 4-minutes that you have remaining, if you would give us a little advice on how we can proceed and do this. You have really a unique perspective and background because of your former positions here in the U.S. Senate and we would welcome your comments.

Mr. RUDMAN. Senator DeWine, I think it is a daunting problem. Let me describe the problem and then what I think is the potential solution.

I am convinced after serving on the Senate Intelligence Committee, chairing the PFIAB and serving there for 8 years, having almost daily contact with the intelligence community, that the problem is not that we don't have enough information. We have too much information.

Our collection modalities are extraordinary. We have both human intelligence and electronic intelligence, as well as the various mapping agencies and other covert operations we run to gather intelligence. The challenge is how do you analyze it and how do you get it in the right place in a timely fashion.

We are a huge country. When you look at the intelligence agencies of other countries, they are so much smaller and they have so much less to deal with. Even they have enormous problems preventing Shin Vet, which is the civilian part of Mosad in Israel, is having an incredibly difficult time pinpointing terrorist activities and where they will take place.

I believe that the two committees now studying this in closed and soon to be open session are going to have to find a way to establish extraordinarily technical linkage between these agencies in a way that we have never done it before.

For instance, as you know, without getting into classified areas, the National Security Agency has computers that have what is called an artificial intelligence. This automatically detects certain things in which we are interested. Now, we are going to have to do that, both with the FBI counterterrorism department, which is a whole new division being expanded by Director Mueller, as well as at the CIA. We are going to have to turn a giant search light onto some of these issues, so that when information arises, such as the information that arose the FBI about certain activities at flight training schools, it immediately gets on somebody's screen who is responsible for looking at it and can put the pieces together. The challenge is finding the technology to put the pieces together.

Having said that, they have been trying at the agency to do that. The FBI has been vastly underfunded in terms of or what technology reason, I don't know. They are in 1970's technology in some of their field offices and in their headquarters.

Having said all of that, I want to just make one other statement. I really worry when I hear people saying that if we just have better intelligence, we are going to solve the problem. We are not going to solve the problem with better intelligence. We are facing, as the President says, a war against a group of people that want to do us grave harm. It is not the physical damage they want; it is the terror they want to strike in the hearts of Americans. We are going to have to find a way to deal with that, but intelligence alone is not going to solve the problem.

I have developed a line lately that I guess explains it. What I have been saying is that if you batted .500 in baseball, you would be in the Hall of Fame. If you bat .750 in intelligence, you are a loser. You are not, through intelligence, going to be able to detect all of the bad things that are going to happen, but that doesn't mean we can't try.

The first thing we have to do is to find a solid way to exchange information that deals with terrorist activities both here and abroad. I certainly hope that that is the result that the congressional committees will finally reach.

Senator DEWINE. Thank you, Madam Chairman. Thank you, Senator.

Chairperson FEINSTEIN. Thank you very much.

Just for one quick second round-and I want to move on, but I have to ask you this question. I frankly don't see how we avoid just creating one massive bureaucracy which makes the chain of command even more convoluted than it already is.

The more I think about it, the more I think the way to really go is along the lines that you propose, Senator Rudman, of limited