Preface

In its enabling legislation, the Congress required the Advisory Panel to Assess Domestic Response Capabilities for Terrorism Involving Weapons of Mass Destruction to submit five separate reports to the President and the Congress-on December 15 in each of the years 1999 through 2003.

At its regular quarterly meeting held on September 12 and 13, and at a special meeting held on September 30, 2002, the Advisory Panel adopted certain recommendations for its Fourth Annual Report to the President and the Congress. The recommendations set forth in this document are the principal recommendations that will be included in that report in a chapter entitled "Strategy and Structure." A "lame duck" session of the current session of Congress will apparently resume consideration of Senate and House bills to create a new Department of Homeland Security. The panel decided to publish this interim document to assist in informing the current Congressional and public debate, specifically on those issues that are reflected in this document.

Full copies of the Advisory Panel's Annual Reports, as well as copies of minutes of all Advisory Panel meetings, its enabling legislation, its current membership, and related information are available online at http://www.rand.org/nsrd/terrpanel, or in hard copy by written request to:

RAND

1200 South Hayes Street Arlington, Virginia 22202-5050

STRATEGY AND STRUCTURE RECOMMENDATIONS

Dealing with the Terrorists Among Us

It is now clear, from contemporaneous reports and recent arrests, that potential terrorists are inside the United States. Many of them may have received training in foreign camps. They may seek to carry out attacks against U.S. citizens and property. This new aspect of the terrorist threat requires a new approach in two key areas:

Intelligence Collection, Analysis, and Dissemination

The need for a focused and comprehensive analysis of threats of potential
attacks inside the United States; and

The need to address the gaps in collecting intelligence on foreign
terrorists threats inside this country

The U.S. government's organization reflects an artificial distinction between "foreign" and "domestic" terrorist threats. The new threat environment, where those distinctions are increasingly blurred, requires a more robust and focused approach to all aspects of intelligence - collection, analysis and dissemination - whether it is collected at home or abroad. And this must be done in a way that respects American civil rights and liberties.

The CIA, FBI, other members of the Intelligence Community, and the proposed
Department of Homeland Security (DHS) will all have roles for intelligence-related
functions. DHS will have responsibility only for vulnerability assessments for critical
infrastructure protection, as well as for providing nationwide alerts. As things now stand,
the FBI and CIA will each continue to have its own domain for terrorism intelligence with
only marginal direct coordination between those entities, and no direct, formal relationship
with the proposed DHS. Yet, large, multi-mission agencies like the FBI and the CIA are
incapable of changing direction quickly enough, and should not be tasked further, to
respond to current dangers. There is a risk of duplication, overlap, and bureaucratic
"stovepiping" in this vital area. So a consolidation of certain activities is required.

Recommendation: That the President direct the establishment of a National
Counter Terrorism Center (NCTC)

That entity should be a "stand-alone" organization outside of the FBI, CIA, or the
proposed DHS. The objective is to consolidate in one entity the analysis of foreign-
collected and domestically-collected intelligence and information on international terrorists
and terrorist organizations threatening attacks against the United States. This would be
accomplished by permanently transferring (not “detailing") analysts currently performing
those functions within the CIA (i.e., the core analytic capability within the CIA's Counter
Terrorism Center), the FBI (the newly-expanded analytical section), other appropriate

1

members of the Intelligence Community, representation from DHS (when formed), and supplementing with new hires as necessary.

The NCTC should be an Independent Agency of the Federal Executive Branch, similar to the standing of the Environmental Protection Agency, the Federal Emergency Management Agency, NASA, or the General Services Administration. The new entity should be a full member of the U.S. Intelligence Community. The agency head should be appointed by the President with the advice and consent of the U.S. Senate.

Advantages and Disadvantages of an Independent Agency

The members of the Advisory Panel discussed at length whether the NCTC should be placed within an existing department or agency or within the proposed Department of Homeland Security.

The panel discounted its placement in the Central Intelligence Agency for legal, policy, perception, and cultural reasons. The panel discussed and rejected the notion that this entity could be part of the FBI or an agency within the Department of Justice. Panel members felt that such placement would cause the entity to have too much law enforcement focus-building cases for prosecution rather than detection and prevention.

The panel considered the prospect of placing the entity in the proposed Department of Homeland Security (DHS). While many panel members agree that such placement is a viable option, that alternative was eventually rejected for several reasons. First and most important, DHS will not be the only "customer" of the products of the NCTC. Other key Federal entities-notably the Department of Justice and its agencies, the Department of Health and Human Services, the Department of Defense, the Department of State, and the Department of Agriculture will all require significant intelligence products from the NCTC. States, localities, and elements of the private sector will all be considerable consumers of NCTC products. Moreover, it would be viewed by other Federal agencies as being more responsive to DHS activities and priorities at the expense of other agencies' requirements. As a DHS entity, the NCTC would have to compete for resources with other DHS functions.

The panel concluded that a stand-alone entity, with its own funding, would be more likely to set priorities for its activities more objectively-an "honest broker" for competing requirements-and would not be viewed as tied to any single agency's mission.

The disadvantage to a stand-alone agency is that may simply create more bureaucracy. That argument will be neither more nor less valid than the suggestion that DHS will create new bureaucracy. Moving existing resources and responsibilities from the FBI and from other entities in the Intelligence Community will minimize any real growth of government. The advantages gained in this structure outweigh any such impact, in the panel's view.

The NCTC would be responsible for the fusion of intelligence, from all sources, foreign and domestic, on potential terrorist attacks inside the United States. It would be responsible for the production and dissemination of analytical products to all appropriate "customers," including the Departments of Justice, Homeland Security, State, Health and Human Services, Agriculture, and Defense, and in coordination with those agencies, to designated and cleared officials in States, localities, and the private sector. It would have the authority to levy direct intelligence requirements on the Intelligence Community for the collection of intelligence on potential threats inside the United States. (See further discussion on collection below.)

The NCTC should be the entity that manages the "Collaborative Classified Enterprise” outlined in the National Strategy for Homeland Security, which links Federal, State, and local efforts in analyzing the activities of persons who have links to foreign states or to foreign terrorist organizations. The intelligence and information sharing functions currently being developed through the U.S. Attorney Antiterrorism Task Forces and slated to be moved to the proposed DHS should instead be imbedded in the NCTC.

The Critical Role of States, Localities, and the Private Sector

State and local entities, as well as key segments of the private sector,
currently develop important intelligence and related information on potential
terrorist threats to the homeland. There is currently no comprehensive
system for consolidating all of that information into coherent threat analyses.
In order to accomplish these functions and to establish other important
coordination with States, localities, and the private sector, the NCTC staff
should include significant representation from each of those segments. The
panel envisions the NCTC hiring personnel with related experience at the
State and local level and in the private sector, either on a permanent or
rotational basis or a combination of the two. In addition, functions for
developing guidance and for improving procedures should be informed by an
advisory council comprised of senior officials from States (governors, state
emergency managers, state police, state public health) localities (mayors, city
managers, law enforcement, emergency managers, fire services, emergency
medical technicians, and other local responders) and appropriate private
sector entities (especially representatives from critical infrastructures).
Moreover, formal operational relationships should be established with States
and localities that have created structures and processes with similar
missions that can be used as models for other areas of the country.
Examples include the California Terrorism Information Center (CATIC), the
Los Angeles Operational Area Terrorism Early Warning Group, and New York
City.

It is clear that the Federal government is far from perfecting a system of sharing national security intelligence and other information, developed at the Federal level, with States,

localities, and certain segments of the private sector. While important progress has been made, the flow of intelligence and information is still not completely a "two-way street.” The prevailing view continues to be that the “Feds” like to receive information but are too reticent to share completely. Not all officials at every level of government need to be cleared for classified information. The Federal government must do a better job of designating "trusted agents" at the State and local level and in the private sector, and move forward with clearing those trusted agents-at Federal expense. This should not be a case of the Federal government allowing those agents access and then giving them the "privilege" of paying for it. This is a national requirement--not Federal on the one hand, and States, localities and the private sector on the other. Additional Federal resources are required, and soon, to make this process work.

Improving the Collection Function

Recommendation: That the collection of intelligence and other
information on international terrorist activities inside the United

States, including the authorities, responsibilities and safeguards under
the Foreign Intelligence Surveillance Act (FISA), which are currently
in the FBI, be transferred to the NCTC.

This collection function would be functionally separate from, but physically co-located with, the analytical fusion component.

The Panel makes this recommendation for two reasons. First, while the FBI remains the world's preeminent law enforcement agency, there is a big difference between dealing with a terrorist act as a crime to be punished and dealing with it as an attack to be prevented. We commend the FBI leadership for its efforts to make these changes. But the Bureau's long standing tradition and organizational culture persuade us that, even with the best of intentions, the FBI cannot soon be made over into an organization dedicated to detecting and preventing attacks rather than one dedicated to punishing them.

Second, even if the FBI could be remade, the Panel believes it important to separate the intelligence collection function from the law enforcement function to avoid the impression that the U.S. is establishing a kind of "secret police."

The collection component of the NCTC should be based on the concept of the Foreign Terrorist Tracking Task Force created by the Attorney General in the Fall of 2002multiple agency representation and robust technological capabilities—but with authority to collect intelligence and information within the United States. It would be authorized to collect intelligence only on international terrorism threats. It could not lawfully collect any other intelligence. Counter terrorism intelligence collection outside the United States would continue to be accomplished by the CIA, NSA, and other foreign IC components.

The NCTC would have no "sanction" authority. It would not have arrest powers-that authority will continue to rest with the FBI, other Federal law enforcement agencies, and state and local law enforcement. The NCTC would have no authority to engage in