is in regard to oversight. I think those of us who serve on the Judiciary Committee need to do the same thing. I wonder what suggestions you might have specifically for this committee or for the Judiciary Committee.

Mr. RUDMAN. My sense, having served on this committee-I did not serve on Judiciary-is that if I had a criticism as I look at it then and now, I thought there were occasions we got down into the bushes too much, got too much into micromanaging what really have to be executive decisions.

I think there are some broad policy questions involving the Intelligence Community. They are serious questions. They are addressed in this report. They have been addressed in some of the reports that Senator Roberts spoke about. You kind of do what you like to do. It is probably-it is a lot more interesting going in closed session and talking about some of the covert operations than it is dealing with wiring diagrams of how things ought to be set up but, frankly, I don't know how this committee is run today, I only know how it was run when I was on it a number of years ago, and I thought sometimes we got into the detail too much with the agency. I really believe that there are serious structural issues which have to be battled out and on which there is substantial disagreement. In the final analysis, this committee and the administration will decide how those structures will take place. To me that is where the effort ought to be in my view.

Senator DEWINE. Thank you, Mr. Chairman.
Chairman Goss. Senator Thompson.

Senator THOMPSON. Thank you, Mr. Chairman.

Senator, somewhat along those very lines that you have just been discussing, the issue of what part is the responsibility of the administration and what part is our responsibility as we tackle these issues, how much flexibility should they have, that really goes to the heart of where we are on the homeland security bill. You are right, it is bogged down right now and I am sure you have been following it, but for those who have not followed it real closely, it essentially has to do with two areas.

One is the authority of the President. Presidents since JFK, either through executive order or by statute, have had the authority to abrogate collective bargaining agreements in times of national security. Those who have a different view are insisting that there be additional criteria, that people moved into the new Homeland Security Department, that the President has to determine that their job function has essentially changed in order for him to be able to apply that authority. It is a difference.

Secondly, it has to do with the issue of flexibility, that the person, persons running the new department will or will not have. We are having a big battle up here as to whether or not we should essentially retain the same work rules, the same requirements in Title V across the board. Keeping all the worker protections, keeping all the whistleblower protections and all of the basic things, but in terms of pay, in terms of reward, discipline, termination, levels of appeal and all those things that were created, some of them 50 years ago, we are in a battle royal up here now as to how much

I noted in Director Freeh's testimony, and I would turn to it, in regard to half a dozen of the recommendations he makes, it has to do with these same kind of areas. Compensation, the number of people they need, staffing, exempt the FBI from compensation restrictions of Title V, procurement procedures, which is a part of the homeland security bill. Achieving interoperability, making all these 22 disparate agencies we are bringing in in the homeland security context work together, and restructure the budget to give more flexibility to the DCI, Attorney General and FBI Director to better allocate program funding-in other words, to put people and money where you need it and have some accountability at the top but also flexibility at the top, because we are living in a different age.

I guess you can see where I am leaning in terms of this debate, but I would appreciate your overall view from 30,000 feet or so, if you could, or any more detail if you have followed it that closely as to what direction we should be going in here or how we should resolve what essentially as of this moment has killed the homeland security bill for this year. The American people are going to have a hard time understanding the things I have just been talking about are going to be things that kill the homeland security bill this year.

Mr. RUDMAN. Far be it from me to give political advice, but I would not want to be a Member of Congress if you go home without passing that bill and something bad happens while you are on recess because people are going to think if they had only done the homeland security bill, things would be better off. Maybe they wouldn't have been, but the fact is the perception would be that you didn't do what you should do.

I can answer the question very simply, because the commission is on record. Hart-Rudman laid out very clearly that we believe that because of the national security nature of this particular organization, that there ought to be-we didn't lay them out specifically but there ought to be broad flexibility for that Cabinet Secretary in terms of personnel policies and we were very clear that they ought to be flexible and we made no bones about it-strong language, bipartisan, seven Democrats, seven Republicans. It was not a partisan issue.

What I have suggested to some people, and I am not sure where this debate is right now, why don't you simply take the identical provisions that applied to people at DOD and apply them to this agency. Maybe that is less than the administration wants, maybe that is more than some of those who think labor protections are inadequate, but it certainly seems to be a reasonable compromise. It has worked at DOD. So that would be my suggestion. I think I answered your question.

Senator THOMPSON. Yes, sir. Thank you very much.
Chairman Goss. Ms. Harman.

Ms. HARMAN. Thank you, Mr. Chairman. Hi, Senator.
Mr. RUDMAN. Good morning.

Ms. HARMAN. As you know, I served on the Bremer Commission and have been passionate about this issue of homeland security for as long as I can remember. About an hour ago, in fact, I spoke to Governor Ridge about my view, echoing Senator Thompson, that more needs to be done to unstick this issue in the Senate. He tend

ed to agree. I cannot imagine for the life of me why some reasonable compromise along the lines you are suggesting cannot be reached on this civil service issue. It was reached in the House. I'm not sure what we did was perfect, but the bill passed on a bipartisan vote at 4 a.m. in July in the House and we all expected something would happen in the Senate by now.

My question is this: From where I come in Los Angeles-and I was just there yesterday-people are much more concerned about the potential suicide bomber next door than they are about what Saddam Hussein may have in store for us in a year or so when he gains nuclear capability. Let's hope not. You have made a suggestion. Do you feel that there is a way to mobilize pressure now to get more good minds working on this now to get this bill passed in the Senate? My view would be vote on whatever version they may choose to be on and passed in conference and funded before Congress adjourns.

Mr. RUDMAN. First, let me thank you. I should have mentioned when I credited people with picking up on our suggestions you are in the forefront of that, and I guess I just didn't see you sitting there. Maybe you weren't there. But I want to thank you for what you did and continue to do. I frankly am a little bit appalled at the problem.

I have been involved in some intractable fights here in the Senate where we just couldn't seem to get going, but we eventually got it done. I have to believe it will get done before you leave here. It is just too important to leave undone.

I think a simple solution is to cut it down the middle and say if it's good enough for DOD, it's good enough for Homeland Security, and I think everybody ought to buy into that. That's my view. Maybe the administration won't, maybe some of the Congress won't, but I think it is a reasonable solution. It has worked there for all these years. The Secretary of Defense has a lot of flexibility in some areas. The Secretary of Homeland Security ought to have that flexibility.

That would be my suggestion, for what it is worth. I have been asked by both sides, by the way, to help on this and I have made a number of phone calls, but I am becoming-obviously as I get older my persuasive abilities are lessening.

Ms. HARMAN. I thank you. I know I can't ask another question, but some clear way to state that we do not intend to change existing law, existing law codified by President Carter and operating through five administrations, I would think would be the answer. Mr. RUDMAN. Could well be.

Ms. HARMAN. Thank you, Mr. Chairman.

Chairman Goss. Mr. Condit.

Mr. CONDIT. Thank you, Mr. Chairman. Senator, you've stated that you feel the DCI should have more authority. Right now in the Congress some of the committees are considering giving Under Secretary status to the Secretary of Defense to have an Intelligence Under Secretary. Do you think that is a good idea or a bad idea? Mr. RUDMAN. I think it is a terrible idea. Secretaries of Defense have been trying to run the Intelligence Community in this town. for 25 years and Secretary Rumsfeld is no exception. My friend Bill Cohen is no exception. It is a horrible idea and if you do it, you

might just as well dismantle the Intelligence Community as we know it and call it what it is, the Department of Defense.

it?

Mr. CONDIT. You have left no doubt of where you are.

Mr. RUDMAN. I don't have any doubts.

Mr. CONDIT. Thank you, Senator. Thank you very much.

Chairman Goss. It is wonderful to get a nonevasive answer, isn't

I want to thank all the members of our panel, Ms. White, Judge Freeh, and Dr. Pillar, who will be back this afternoon, particularly Senator Rudman who has been put through the extra paces already before lunch. We appreciate very much the time that you are taking out on this. It is valuable. It is helping us. I know that we have Member interests and Members will be back after lunch and we will continue on with questions after we hear from Dr. Pillar.

We have your testimony, anyway, as you know, so not all is lost, but we would like you to start this afternoon at 2:00 or as close thereto as we can get enough people back here.

Thank you very much. Thank you very much, Senator Rudman. We are in recess until 2:00.

[Whereupon, at 1:10 p.m., the Joint Inquiry Committee was recessed, to reconvene at 2:00 p.m., this same day.]

AFTERNOON SESSION

Chairman Goss. Can I ask the committee to come back to order, please, and invite our guests to be seated. And we are going to start with Dr. Pillar, who is going to tell us a lot, I think, about terrorism, because, as I've said before, I think he is one of the great authorities. And if you haven't read his book, you should. The floor is yours, sir.

TESTIMONY OF PAUL R. PILLAR, NATIONAL INTELLIGENCE OFFICER FOR THE NEAR EAST AND SOUTH ASIA AND FORMER DEPUTY CHIEF OF THE COUNTERTERRORIST CENTER AT THE CENTRAL INTELLIGENCE AGENCY

Dr. PILLAR. Thank you, Mr. Chairman and members of the committees. I appreciate this invitation to testify and this hearing on lessons from past U.S. experiences in confronting international terrorism. And I commend the committees for holding a hearing with this particular focus. Reducing the chances of terrorist strikes against our Nation's interests requires examination not only of a single incident, however tragic and traumatic that is, but also understanding what has and has not been tried in the past, what changes in our approach have already taken place and what possibilities and limits have already been demonstrated.

One lesson from the past is that the principal characteristics of the terrorist threat we face today and the challenges for intelligence that those characteristic pose have been with us for quite some time. The difficulties that the September 11 case presented to intelligence and to law enforcement, for that matter, were all too typical of what we have repeatedly faced in the past. Terrorist groups or, more specifically, the parts of them that do the planning and the preparation for terrorist attacks are small, highly secretive, suspicious of outsiders, highly conscious of operational secu

rity, and for those and other reasons extremely difficult to pene

trate.

The collection challenges go even further. The intelligence target is not just a fixed set of targets. It is anyone, even if not a cardcarrying member of al-Qa'ida or some other known terrorist group, and even if the person has not been involved in terrorist activity in the past, but anyone who may use terrorist techniques to inflict harm on U.S. interests.

Along with the collection challenges, are the analytic ones. The material that counterterrorist analysts have had to work with has always consisted of voluminous but fragmentary and ambiguous reporting, much of it of doubtful credibility, that provides only the barest and blurriest glimpses of terrorist activity. The analysts have long been faced with blizzards of flags or dots, call them what you will, that could be pieced together in countless ways. If pieced together in the most alarming ways, the alarm bell would never stop ringing.

Although the task of tactical warning has always run up against these formidable challenges, the scraps and fragments that intelligence collects often have enabled analysts to offer warning of a more strategic nature. But that terrorist threat from certain kinds of groups, or in certain countries or regions, or against certain categories of targets, or in response to certain kinds of events is higher than it is elsewhere. The result has been a persistent pattern in the Intelligence Community's performance on this subject that has been noted, for example, in the findings of the investigation that was led by General Wayne Downing into the bombing of Khobar Towers in 1996.

That pattern, an absence of tactical warning but good strategic intelligence of the underlying terrorist threat, is what you get when earnest efforts are played to extract what can be extracted from this extremely hard intelligence target. Certainly the Intelligence Community must spare no effort to obtain tactical intelligence on future terrorist attacks against U.S. interests.

But years of experience teach us that even if high priority is given, as it has been, to the development of sources for that kind of very specific information, and even if considerable imagination and resources are applied to that task, truly well-placed sources inside terrorist groups, the kind that can yield plot-specific information will always be rare.

A corollary lesson is that the United States should avoid overly heavy reliance on intelligence to provide tactical warning. The panel that was chaired by retired Admiral William Crowe and examined the embassy bombings in 1998 noted an unfortunate tendency in security managers towards such excessive reliance on tactical warning. Intelligence officers share a responsibility for countering that tendency by reminding consumers what we don't know as well as what we do. To borrow an advertising slogan, an educated consumer is our best customer.

As important as tactical warning is, it represents only a fraction of what intelligence has contributed through the years to counterterrorism, including contributions that have saved lives. Strategic forms of intelligence can be, in fact, even more useful than the tactical as inputs to decisions to security counter