database so that the chief of police in Portland could call this center either directly or through Homeland Security. But they have to have access to that information, you are absolutely right. And they ought to produce a common watch list that is available to everybody in the country who needs it.

The President's desire, as I understand it, is to try to build on what is already working. The officers who are assigned to this center will be able or are encouraged to have strong ties back to their home agencies including, I am told, even the right to have access to operational traffic within their agency, which is a very important element.

At the same time, there will be much confusion as the center is being created. The FBI has been trying to do this, the Department of Homeland Security has been trying to do it, and now we have yet a new center. There will clearly be some confusion and Congress needs to keep an eye on it. I understand, for example, in the President's budget that he has just submitted contains $829 million for DHS's information analysis and infrastructure directorate. Is that money then to stay in Homeland Security or does that somehow get shifted to the intelligence community for this function?

Jim and I agree, the intelligence element of homeland security should report directly to the Secretary, and he went through the functions that they need to perform with which I agree and I will not talk about that.

Let me talk about a couple of specific questions the Committee has asked me to address. First, I do not believe that there are any unique legal or privacy concerns raised merely because the DCI will now be responsible for the analysis of domestic intelligence.

However, I would like to point out to the Committee that under current law the DCI, “in his capacity as head of the CIA shall have no police, subpoena, or law enforcement powers or internal security functions." Two aspects of this are worth dwelling on for just a moment.

First, the law draws a distinction between the DCI's role as head of the CIA and as head of the broader intelligence community. This suggests that Congress recognized that as head of the intelligence community he would inevitably have some role in domestic intelligence and law enforcement matters. However, Congress was rightly concerned about the creation of a domestic secret police, and thus barred CIA from having any police or internal security functions.

The second clause of this provision, "shall have no internal security functions" is also worth a moment's discussion. I have always understood it to mean that the CIA may not play any role in domestic law enforcement other than the collection and analysis of foreign intelligence that may relate to law enforcement or domestic security. Indeed, CIA has done that since its establishment.

For example, it collects information relating to espionage directed against the United States, collects information relating to narcotics trafficking, money laundering, and so on. However, as this center is established it would be well to consider carefully the limits of what the DCI and the TTIC will do to be certain that we are comfortable with their roles. Some additional guidelines may be necessary to determine where the line is between intelligence relating

to domestic terrorism, which would be legitimate areas for the center to address, and intelligence relating to purely domestic political groups which should be left with the FBI.

The center should not, for example, be used to analyze information on domestic political groups such as right wing militia or hate groups. It must continue to follow the existing Attorney General guidelines on such matters as the collection and dissemination of information. I, for one, am comfortable with the President's proposal but I believe vigorous Congressional oversight is needed and perhaps some new guidelines.

Finally, Madam Chairman, as this Committee knows, I have been an advocate for some time for creating a domestic security service and I think this is the first step in that direction. I know Senator Edwards introduced a bill yesterday to this effect, Senator Graham has talked about the same thing. I think it is time to seriously give that consideration. Thank you.

Chairman COLLINS. Thank you very much, Mr. Smith.

Why don't we start with the point you made last and I would like to ask Mr. Steinberg your judgment on whether or not we should create a domestic intelligence agency? Many of us have concerns about the civil liberties implications of that and I would welcome your judgment.

Mr. STEINBERG. Thank you, Madam Chairman. I think that the civil liberties issues that we face exist irrespective of where the domestic collection takes place. We have civil liberties issues if the FBI remains the principle domestic security organization or if we have an organization that is separate. On balance, I agree with Jeff Smith that we would be better off with a separate organization. First, because I do believe that a domestic security operation is a very different function than law enforcement. We heard earlier from the early panel about the cultural problems. I think in some respects that if we try to turn the FBI into something which it has not been, we will not get the benefit of what the FBI does well, which is an important law enforcement function, and will begin a new role from a place where they are affected by their traditions. So I think we need a fresh start. I think we need to look at this question, and I think that the advantage of having a separate organization is that we can have a public debate about what the rules are that should govern it. If we were to create such an organization we would be able to have decisions in the statute that created it providing clear guidelines on civil liberties measures, on accountability and the like, and it would allow us to have a fresh debate that I fear we will not have if we simply move the FBI into the domestic security function and away from law enforcement.

I think we do have to remember the difficulties that the FBI had in the past when it did play a bigger role in domestic security. So I do not feel that just simply by keeping it in the FBI that we can necessarily address those problems. I think by creating an organization that is focused on the domestic security function you will have an organization that defines its mission as protecting the American people and is organized to do that in the most effective way.

Chairman COLLINS. Mr. Smith, based on your experience at the CIA do you see duplication between the CIA's Counter Terrorist

Center and the proposed new integration center? How do they differ? It was my understanding that the Counter Terrorist Center was supposed to conduct all-source analysis and in fact Director Tenet just last year said that it was created to enable the fusion of all courses, the same kind of language that is being used now to justify the creation of the new integration center.

Mr. SMITH. I agree, Madam Chairman, and I think what will happen here or what should happen is that the current CTC should get much smaller and it should probably focus very much on overseas collection of intelligence and overseas operations. The analytical function currently being done by the CTC should be moved to this new center and combined with the analytical functions of the Bureau, because I do think unless that shift is made there will continue to be overlap and confusion.

Chairman COLLINS. Mr. Steinberg, do you have any thoughts on

that?

Mr. STEINBERG. I think it is a very good question, Madam Chairman, because we have to ask ourselves the question why the CTC has not been as successful as we want it to be, and whether creating an organization which sounds very much like what the CTC was supposed to be would solve the problem.

I think that there are two reasons why the CTC has not been successful. First is, as you explored at length with the first panel, there is a problem with joint ventures.

There is a question of what is the principal set of responsibilities of the people who work there, how do they think about the problem? I think it is a lesson we learned from the Goldwater-Nickles Act in the military context. That if you do not give a sense of jointness, of being on the same mission to the people who are taking on this task together, they will still feel they belong to the domestic equivalent of the Army, Navy, Marines, and the like, that you are not going to get the kind of coherence and integrated approach that you want. I think that has been one reason why the CTC has not been as successful as it should be, and that I think will be replicated in the new proposal for the TTIC.

Second, I think you have the problem that there is a disconnect between those people who have operational responsibility and the analyst. That there is still a lack of understanding by the analyst of what is needed by the people who are out there in the field to do their job. Under this approach, we have lost the sense of connection between understanding what a border policeman needs to know, what a State and local official needs to know, what a fireman, what a doctor needs to know to carry out their job in homeland security.

The analysts exist in some respects in a vacuum from the mission. I think that has been a problem. We have used this device to assure independence but it has also created a disconnect. I think there are other ways to get the independence and the check on the quality of the intelligence without creating the sense of isolation of the analyst from the broader mission.

Chairman COLLINS. Mr. Steinberg, do you think that the new center, if it does come into existence which I believe it will, should be able to direct the collection of data?

Mr. STEINBERG. Irrespective of where it is located, I think that it is precisely the people who are trying to understand the problem who can help think about where do they want to fill in the holes? What are the problems that they see that are not being attended to? They have a unique ability to see what the requirements are. But again, when you think about it in those terms, the analysts are one set of the community of people who understand what the requirements are, but so are the users. That is, again, another reason why I would like to see the connection to the users because that way you have the full community of analysts and users together thinking about what the requirements are, and getting a more focused collection.

Because, for example, in the area of critical infrastructure, we will now have in the department people who are looking at the questions of, what are the attacks we are most worried about? What are the greatest vulnerabilities we have?

We then need to be able to have them go to the collectors and say, we are worried about whether the terrorists can attack a chemical plant, or cause damage at a nuclear facility. They will understand the problem that needs to be addressed and they can focus the direction of the collectors to that end.

Chairman COLLINS. Mr. Smith, what is your view on that? Should the new center be able to direct the collection of data or just be a recipient and analysis

Mr. SMITH. I do not believe they should be able to direct it directly. By that, I mean they should have a key role, and indeed the leading role, in suggesting what needs to be collected, but that ultimately the DCI has to decide what are the priorities of collection. In the intelligence business there is a lot of competition for scarce assets.

For example, how does one decide how the satellites are targeted? You cannot have the DCI telling a satellite to collect on something and have the head of the center telling that same satellite to collect on something different. That is the DCI's role.

On the other hand with respect to issues related to homeland security, clearly this center has to have a very strong voice.

One other point I think is extremely important. Whether the center is under the DCI or ultimately moved to Homeland Security, it is also imperative that the center be able to send essentially tasking directives to State and local government. The British model, the MI5 is very good on this. They work with State and local-in their case all local municipalities, very directly to say, here are the issues that we are concerned about. Here are the people we are concerned about. Here are the organizations we are concerned about. So that the bobby on the beat in London or Manchester knows what it is that he is supposed to be looking for. That is something that we do not do now and that is something that homeland security needs to do in the future.

Chairman COLLINS. Senator Pryor.

Senator PRYOR. Thank you, Madam Chairman. I just have a few short questions. This is a fascinating discussion because it gives us the opportunity to establish something new that theoretically we could do an extremely good job of setting up and that could be very beneficial to this country and to the world. In the discussions and

proposals where do the two of you see major points of weakness in any proposal?

In other words, we talk a lot about who has control over this and what is the job description of this entity. But what do the two of you see as the major point of weakness, the one thing that we need to make sure that we get right, or the one thing that we will need to work on the most to make sure this is an effective organization? Mr. STEINBERG. If I could start, I think that in many ways the challenge we face on homeland security is a little bit like the challenge we faced at the beginning of the Cold War, at the end of World War II, when we really had to rethink our national strategy. That meant both the substance of our strategy-we developed the doctrine of containment and it had a powerful impact on the organization of our government and how we

Senator PRYOR. I agree with you on that. I think that is a good point.

Mr. STEINBERG. There is a tremendous temptation to do this in a piecemeal fashion. It is hard to make big change in government. You know that, this is the Governmental Affairs Committee. So the temptation is to make incremental changes. To say, the FBI should do a little more here, the CIA will do a little bit more here. There is always resistance. There is always inertia. There are always costs to change.

I think that what the Congress has done in this area has really pushed the administration both on the strategy and the organization to say, think about this as a fresh problem. Recognize that we really have never thought about the vulnerability of the United States as a core part of what we do. It affects our military. It affects our police. It affects the relationships between State and local government, the private sector and government. These are profound changes and we need to have a vision and a strategy that is equal to the profundity of this change.

Mr. SMITH. I agree completely. I mentioned the British a moment ago. We do not need to necessarily adopt MI5 as the perfect model but they start and are charged by the Prime Minister with that very question, what are the threats to the United Kingdom, whether they originate within the United Kingdom or outside of the United Kingdom, that will ultimately manifest themselves within the United Kingdom? It is their responsibility to figure what to do about them. They collect, they analyze, and ultimately work with law enforcement officials to act. The strategy is vitally important. Another issue that I worry about is confusion and who is in charge. The issue of the unity of command that I mentioned at the outset, Mr. Steinberg mentioned Goldwater-Nickles. Congress made an enormous step forward in linking authority with responsibility with resources, and that is very important. A Marine general one time put it more bluntly which is, I want a designated neck, by which he meant a neck around which I can get my hands. That is a very useful concept, and as we organize ourselves we ought to designate necks that the President and the Congress can get their hands around when things go wrong.

Senator PRYOR. Let us talk about MI5 for just a second. I will be the first to admit that I do not know a lot about MI5, but you have mentioned it. My perception of MI5, and maybe I am wrong,