MASSACHUSETTS INSTITUTE OF TECHNOLOGY

DEPARTMENT OF CHEMISTRY
ROOM 6-208
CAMBRIDGE, MASSACHUSETTS 02139

JOHN M. DEUTCH TEL (617)253-1479

FAX (617)258-5700
INSTITUTE PROFESSOR E-Mail: jmd@mit.edu

Senator John Warner, Chairman Senator Carl Levin,

Committee on Armed Services Committee on Armed Service

Senate Susan Collins, Chairman Senator Joseph Lieberman

Committee on Governmental Affairs Committee on Governmental Affairs

Senator Pat Roberts, Chairman Senator John D. Rockefeller, IV

Senate Select Committee on Intelligence Senate Select Committee on Intelligence

Senators: August 14, 2004

The Senate Select Committee's Report on the U.S. Intelligence Community Prewar
Intelligence Assessments on Iraq and the 9-11 Commission Report present a convincing
record of Intelligence Community (1C) deficiencies and provide a compelling case that
major change is required. However, successful intelligence depends above all on
dedicated and capable individuals who are trained and motivated to work cooperatively.
These individuals in the 1C must be enabled by a sound organizational structure with
clearly aligned responsibilities and authorities.

Currently, the Director of Central Intelligence (DCI) does not have the authority
necessary to perform critical intelligence functions that support efforts to combat
terrorism, combat the spread of weapons of mass destruction, and military operations. In
considering changes to the structure of the 1C, the central question that Congress must
decide is how much executive authority to give to the new National Intelligence Director
(NID).

My experience as DCI and Deputy Secretary of Defense leads me to suggest that the best
balance is to increase the authority of the NID for planning and budgeting but to leave
authority for execution of the NID approved programs with executive department and
agency heads. In this regard, some of the recommendations of the 9-11 Commission go
too far and others not far enough. I propose five modifications of the 9-11 Commission
recommendations that I believe will better serve the security interest of the United
States.

1. The NID should be directly responsible to the President and confirmed by the Senate.
The individual should serve at the President's pleasure and should not have a fixed term.
The NID should not be located in the Executive Office of the President because the 1C is

Page 1
 only one actor in the interagency process. The President should rely on the National
Security Council and National Security Advisor as the single mechanism in the
Executive Office of the President for managing the interagency process.

2. The NID must have responsibility for planning, programming, and budgeting an 1C
community-wide, multi year program. This means giving the NID budgetary and
planning responsibility for all of the National Foreign Intelligence Program (NFIP) and
Joint Military Intelligence Program (JMIP) and some of the activities in the Tactical
Intelligence and Related Activities (TIARA) program. The Secretary of Defense should
rely on the NID for the intelligence planning and budgeting required for intelligence
support to military operations. Only if the NID is given this expanded budgetary
authority should the position of NID be separated from the Director of CIA. If the NID
is not given budgetary authority, the position will be irrelevant.

3. The NID should have shared, not sole authority, with the head of the executive
department to recommend to the president appointment of individuals to head 1C
agencies. I believe it a mistake to require that positions of deputy NID for foreign
intelligence, defense intelligence, and homeland intelligence be created or be 'double
hatted.' These positions should be staff functions for the NID and cannot have line
authority over the component agencies. Because of the requirements for battlefield
intelligence, the Secretary of Defense must have day-to-day responsibility over the NSA
(for example, to provide communications security) and the NGA (for example,
geospatial imagery to support tactical targeting). In today's world, a future Secretary of
Defense might well decide not to have an Undersecretary for Intelligence but rather an
Undersecretary for Command, Control, Communications and Intelligence that is more
oriented to support of military operations. The National Reconnaissance Office (NRO)
should be managed by the Secretary of Defense as part of the DOD space acquisition
system, executing a program plan put together by the NDI.

4. The proposed National Counterterrorism Center (NCTC) with joint intelligence and
operations makes sense. But the extension of the 'center' concept to other activities
cannot be made with confidence. The analogy of joint command in the Department of
Defense is imperfect, because all defense activities are under the executive authority of
the Secretary of Defense. The proliferation of centers performing collection and analysis
begs the question about the functions performed under such an arrangement in the
component 1C agencies, especially NSA and DIA.

5. The 9-11 Commission report does not adequately define the relationship of the NID to
the FBI. I believe the NID should have planning and budgeting authority over all
intelligence activities of the FBI. This is the only way to have an integrated intelligence
collection and analysis effort against the terrorist threat. Dissemination of information
with national security implications should under the direction of the NID.

I regret that the 9-11 Commission did not give favorable consideration to separating
domestic intelligence from the FBI and placing domestic intelligence in a new entity
reporting to the NID in similar alignment to the CIA and foreign intelligence. This
would have permitted the Attorney General to focus on assuring that the rights of U.S.

Page 2
citizens are respected and that the 1C obeys U.S. laws. The Attorney General now is in
the undesirable position of having a conflict between collecting domestic intelligence
and defending civil rights.

There are many complex issues involved in implementing the recommendations of the
9-11 Commission. Moreover, organizing the government to meet the terrorist threat is
only one of the serious security challenges we face. There are also the problems posed
by North Korea, the Taiwan Strait, Iran, and combating the spread of weapons of mass
destruction. All require intelligence analysis to support policy and action. It is unwise
to decide on a major reorganization of the national security structure in the months
immediately before a presidential election, based on the recommendations of a group
chartered for the particular purpose of examining the causes of the 9-11 tragedy. The
1947 National Security Act, its 1949 and 1958 amendments and the 1986 Goldwater
Nichols Act were not adopted during a presidential election year and I suggest the
Congress, as well as the Bush administration or a Kerry administration, deserve to give
intelligence community organization further deliberate thought.

Sincerely yours,

John Deutch

Cc: Senator Ted Kennedy

Senator Arlen Specter
Chairman Porter Goss
Congresswoman Jane Harman

Page 3
 "National Intelligence Reforms"
A Critique

The discussion paper proposes, in my view, a structure for the intelligence

community far more complicated and stovepiped than is the present system. It
will be fiercely opposed by almost every element of the community and will have
almost no chance of acceptance. In addition, it is difficult to understand why it
will not make inter-departmental communications more complicated and
stovepiped than they are today.

Perhaps unconsciously, the diagram itself shows fourteen stovepipes with

a mixture of operational and staff responsibilities.

Now to specifics.
The CIA is totally eviscerated.
1) The CIA director, who now reports to the president, would now report to
the executive officer, who reports to the DNI, who reports to the president.

2) The CIA's operational functions are to be divided among seven or eight

directors general who are not responsible to him, as he retains only analytical
functions.

3) The CIA director loses substantial control over the personnel he does
retain to the NIA Chief of Intelligence Personnel and to the NIA executive
officer.

4) The CIA loses control over his own budget.

The FBI is cut in half.

1) Its present law enforcement functions are, of course, outside of the
diagram.

2) While the plan calls the domestic intelligence function the "FBI National
Security Intelligence Service", it is in fact an MI5. Its head is appointed by the
DNI (with the concurrence of the AG or the FBI, depending on which page you
read) and reports to the DNI. That office also controls budget and personnel. No
matter what it's called, it's not part of the FBI.

The Defense Department loses effective operational control over NSA,

NGA and NRO. In addition, it loses budget authority and perhaps even
assignment and promotion authority over the uniformed personnel in those
agencies.

Even the president is restricted in his appointing authority.

 This is not a system with any chance of acceptance; it is not a system that
should be accepted, as it would be highly disruptive in the short term and more
bureaucratically complex in the long term.

Several of its supporting suggestions, however, have real merit.

A single point of oversight over all IT systems and the creation of standard
IT protocols would be a major achievement.

An organized method of collection of openly available information is a

good idea, though why it requires a separate organization I don't fully
understand.

And a far more transparent budget is a good idea.

A Modest Proposal

We do know that in the almost three years since 9/11, a number of

changes and reforms in the intelligence community have been implemented,
some modest, some dramatic. They focus the actual, historic system we inherit,
not a blank slate. To the extent possible and appropriate, we should try to build
on what we already have.

We should encourage the already dramatic reforms in the FBI, insuring

that intelligence career tracks are at least as inviting as those in law enforcement,
and perhaps asking Congress to ensure an adequate intelligence budget.

As the administration has alredy encouraged intelligence sharing by the

creation of TTIC, apparently with some success, let's build on that success.

Now TTSC is a co-operative, relatively low-level bureaucracy, dependent

on co-operation.

Perhaps it should be a statutory agency, with a director nominated by the

president and confirmed by the Senate. Perhaps it can be granted authority to
mandate sharing and co-operation. Perhaps it can be authorized to direct
collection in certain areas it deems appropriate across all present elements of the
intelligence community. Perhaps it can have certain other authorities.

We need to get this right and get it accepted.

Slade
 COMMISSION SENSITIVE
May 28, 2004
National Intelligence Reforms

An Imperative for Change

The attacks on the United States on September 11, 2001, exposed severe shortcomings in our
intelligence capabilities. We did not have effective access in countries where we have no official
presence and we were unable to penetrate hard targets like terrorist organizations operating
abroad or cells established in the United States.
Our investigations have confirmed grave dysfunctions in our national security intelligence
establishment. They are of two kinds, structural and cultural.
The structural problems are the simplest to understand and their remedies straightforward. The
government agencies charged with foreign and domestic intelligence are the creatures of a
different age with laws, regulations, and organization fashioned for external wars and internal
threats of the last century where strict separation of foreign and domestic activities was desired.
That legacy of nation-state focus, legislated walls and compartmentalized information cannot
deal with transnational threats that operate seamlessly at home and abroad with speed and agility.
Our most senior intelligence officials do not have authorities, access and accountability to do
what is expected of them. Nor do they have the power to make the great organizational changes
necessary to correct these problems.
The Commission therefore recommends specific sweeping organizational changes.
Focusing on the Mission
1. Organize the national intelligence agencies - CIA, NSA, NGA, NRO, and the FBI's
counterterrorism/counterintelligence elements (hereinafter the National Security
Intelligence Service) - into a new structure where responsibility, authority and
accountability for the collection, analysis, and dissemination of intelligence are aligned
under a Director of National Intelligence (DNI).
• The DNI would lead the national intelligence agencies and be the President's
senior intelligence advisor. NSA, NGA, and NRO would remain within the
Department of Defense for administrative and logistical purposes.
• The Secretary of Defense would have responsibility for the Defense Intelligence
Agency (DIA), the intelligence entities of the military services, the Joint Military
Intelligence Program, and all tactical intelligence. DIA would continue to
coordinate on national estimates on behalf of the Secretary.
• The intelligence entities within the Departments of State, Treasury, Energy, and
Homeland Security would remain within their respective departments and be
responsible to their respective cabinet secretaries; they would continue to
coordinate on national estimates and receive full access to intelligence collection
data.
• Establish within the Federal Bureau of Investigation a National Security
Intelligence Service (NSIS) responsible for the intelligence missions of the
Bureau, in particular counterterrorism and counterintelligence. The Department
of Justice and the FBI would be responsible for NSIS, which would be funded
through a national intelligence appropriation and its Director would be selected by
the DNI with the concurrence of the Director of the FBI.

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 COMMISSION SENSITIVE
May 28, 2004
2. The President would appoint, and the Senate confirm, a Director of National Intelligence,
separate from the head of the CIA, to lead this new structure with a small executive staff.
The DNI would recommend to the President nominees to be appointed as the directors of
the national agencies, with the concurrence of the relevant cabinet Secretaries, and the
directors of the national mission areas. He/She shall be held accountable for integrating
the national intelligence agencies into a fully integrated, global intelligence network. The
DNI would also:
• Establish intelligence priorities, formulate collection and analytic strategies and
establish intelligence policies; formulate a consolidated budget and execute an
appropriation for national intelligence; oversee the management of the national
intelligence agencies and approve national intelligence estimates.
• Build workforce cohesion and expertise by appointing one official responsible for
rationalizing the multiple personnel systems across the national intelligence
agencies and to create incentives for working across agencies on national security
missions, such as transnational terrorism.
• Fix information sharing among agencies by assigning authority to one official to
set security standards and establish information technology protocols; and hold
that official responsible for changing the security culture from one of restricting
information because of a "need to know" to one that creates incentives for the
"need to share."
• Strengthen financial controls and accountability of the national intelligence
agencies - CIA, NSA, NGA, NRO and the FBI's counterterrorism/
counter-intelligence elements - by establishing one appropriation for national
intelligence and appointing a Chief Financial Officer for national intelligence.
3. The DNI should organize the national intelligence agencies around missions, not
collection capabilities much as the Goldwater-Nichols legislation organized the Defense
Department around missions in 1986; a senior official analogous to a "combatant
commander" would direct, for the DNI, the work of these mission areas (e.g.,
transnational terrorism, weapons of mass destruction proliferation, China, Russia, etc.).
These missions would be expected to change over time as the national security interests
of the nation change as determined by the President.
4. Strengthen human source intelligence overseas be establishing a new clandestine service
of agents that operate entirely under non-official cover which can facilitate greater access
to terrorists and terrorist organizations as well as penetrate the activities of other
transnational actors more effectively than has been accomplished through traditional
official cover arrangements. This new service would be responsible to the DNI; the
1,000 agent service should be fully operational within 36 months.
5. Strengthen competitive strategic analysis by ensuring: 1) the independence of
departmental intelligence entities; and 2) giving full access to collection by these entities
(those within the Departments of State, Treasury, Defense, Energy and Homeland
Security). Establish an independent Executive Research Service to support the National
Security Council with analysis of openly available information on national security topics
and by facilitating the use of outside experts to advise the government.
More important than organizational reform is dealing with the second category of dysfunction<-t—~N
we have broadly defined as cultural; process over output; bureaucratic careerism; groupthink; a /
law enforcement rather than preventive mindset; deep aversion to covert operations; andfganaC /
abusive litigation. These problems cannot be solved by organizational changes howeverbold. I
COMMISSION SENSITIVE
 COMMISSION SENSITIVE
May 28, 2004
They can be changed only by appointing, confirming and supporting proven leaders of talent and
experience to the top positions of the intelligence establishment. It is they who must sweep away
the irrational security, classification and career path obstacles to create a new, agile innovative^_
career environment in which excellence not mediocrity will flourish. -^"""^

Immediate Action Required

To implement its recommendations, the Commission urges the President to immediately
establish, through Executive Order, an eighteen-month Intelligence Transition Task Force to
develop legislation and implement the reforms. The Task Force should include staff selected
from the law enforcement and intelligence communities. The Task Force should report to the
President through an advisory board consisting of the White House Chief of Staff, the National
Security Advisor, and the Chairman of the President's Foreign Intelligence Advisory Board.

The Task Force would be responsible for the following:

1) Drafting legislation and^r an Executive Order to implement the reforms through the FY
2005 Intelligence Authorization Act;

2) Develop a detailed strategy and timeline for implementing the reforms within 12 months
of passage of the legislation; and

3) Report regularly to the President to resolve any conflicts.

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 Page 1 of2

Dan Marcus

From: Slade Gorton

Sent: Friday, May 28, 2004 2:35 PM
To: Kevin Scheid; John Lehman; Jamie Gorelick; Richard Ben-Veniste
Cc: Front Office
Subject: RE: Draft Intelligence Reforms -- Please Comment

With respect, I see no differences between this proposal and its predecessor. It is "sweeping", as
sweeping as was the creation of the Homeland Security Department and will be accompanied by as much
confusion and disruption as is evident in HSD. It has the merit of clearer lines of authority and the obstacle that it
will be uniformly opposed by almost all existing agencies.
It is disingenuous to say that the new NSIS remains within the FBI. The DNI controls its budget, its
personnel and its mission. Its only connection with the FBI is its name and that the latter's director must concur in
the appointment of its director. It will lose all cross-fertilization with the FBI's law enforcement functions and thus
the invaluable FBI contacts with thousands of local law enforcement agencies. It is an MIS, whatever you may
call it, reporting not to a Cabinet secretary, as in the UK, but to the DNI. This may be what we want, but if so, we
should be willing to call it by its proper name.
The heart of this proposal with respect to structure is found in paragraph 3. As I see it, this describes what
the CIA does now. These "mission directors" will either report to the DNI or to a deputy who is for all practical
purposes the CIA director. I see no separate CIA. In fact, you could simply empower the CIA director with all of
the authority you give to the DNI; operations would be supervised by the "mission directors" in paragraph 3.
The authority and range of control you give to the DNI in paragraph 2, priorities, planning, oversight,
personnel, technology and information sharing will not be accomplished with "a small executive staff." It will
require a large and compartmentalized staff.
I question that one personnel system is needed or even desirable for such disparate kinds of operatives
as those who now work for the NSA, the NGA, the NRO and the CIA.
And even these recommendations don't integrate the intelligence work of State, Treasury, Defense
(what's left of it), Energy and Homeland Security. You'll still require a TTIC for that.
I continue to believe that we can get almost al, if not all, of the benefits you seek, without the opposition
and disruption, by making TTIC a statutory agency with a director appointed by the president and given the
statutory authority to require the production of all intelligence from all agencies and the duty to distribute it
appropriately. The director should also have the right to direct the collection of intelligence and the duty to report
to the president any failure to comply.
If we feel the necessity for a more centralized budget process, let the final form of the intelligence budget
go through, and be submitted by, the NSC.
I fully agree that culture is even more important than structure. Paragraph 4 is a vital recommendation,
but where we will find these agents is left unstated. And one presumes that all presidents now seek leaders of
proven talent. The more profound question is how you find, promote and reward permanent staff with skills and
imagination and keep them from becoming risk-averse over long careers.
And finally, no, no, no to a presidential task force. 18 months after we disband, its recommendations will
be just one more message to the Congress to be chewed over by partisans. We are a unique commission. We
should make our recommendations- whatever they are- directly to the President and the Congress with a sense of
urgency and a request for immediate action.

Slade

From: Kevin Scheid [mailto:kscheid@9-llcommission.gov]

Sent: Friday, May 28, 2004 10:04 AM
To: John Lehman; Jamie Gorelick; Gorton, Slade (SEA); Richard Ben-Veniste
Cc: Poysky, JoAnn (SEA); Jutta Freyer Price
Subject: Draft Intelligence Reforms - Please Comment

Commissioners:

5/28/2004
 Page 2 of2

Attached is a revised set of proposed intelligence reforms that attempts to address concerns that several of you
had expressed with the previous proposal. It was developed from the briefing you received several months ago
on the implications of the 9-11 attacks for US intelligence. It also takes into account many of the reforms currently
underway at the FBI and the CIA. At its core, this package of reforms tries to do the following:

Put.gne_eereonjn charge Of pU||jng our national intelligence capabilities together as an agile global
network of human and technical collectors and all-source analysts. This reverses the trend of the past
decade of these capabilities being pulled apart making it more difficult to share information, plan
strategies and work transnational threats across foreign and domestic lines. The DCI no longer has the
influence his predecessors had over the large collection agencies (NSA, NGA, NRO) and is left to advise
the President largely with only human sources. Intelligence is most effective when HUMINT, SIGINT,
IMINT, Open Sources and all-source analysts work together as one enterprise.
Preserve the intelligence capabilities of the Department of Defense to execute war plans, maintain
surveillance operations, and have access to intelligence data in support of the combatant commanders. It
also seeks to address Secretary Rumsfeld's primary concern with the DNl concept, what he characterized
as a resulting lack of competitive analysis if you put all the intelligence agencies under one person.
These reforms would preserve and strengthen competitive analysis.
Build on the efforts of the DCI to strengthen the clandestine service, but to do so with more expediency
and with capabilities that can have greater success against non-state targets like terrorists - undeclared,
non-official cover officers. And
Build on the work of the Director of the FBI to establish an effective intelligence capability with in the
Bureau that has clout, expertise, a career service and links to the foreign intelligence agencies.

Please provide me with your comments and I will try adjusting the draft accordingly by next Wednesday. Once
the four of you are in agreement on the draft I will circulate it among the other commission members for review
and comment.
Please advise.

Kevin Scheid

5/28/2004
 National Intelligence Reforms

Background: The attacks on the United States on September 11, 2001 exposed severe
shortcomings in our intelligence capabilities. We did not have effective access in
countries where we have no official presence; we were unable to penetrate hard targets
like terrorist organizations operating abroad or cells established in the United States.

Our investigations have confirmed grave dysfunctions in our national security

intelligence establishment. They are of two kinds, structural and cultural.

The structural problems are the simplest to understand and their remedies
straightforward. The government agencies charged with foreign and domestic intelligence
are the creatures of a different age with laws, regulations and organization fashioned for
external wars and internal threats of the last century where strict separation of foreign and
domestic activities was desired.

That legacy of nation-state focus, legislated walls and compartmentalized information

cannot deal with the kinds of transnational threats operating seamlessly at home and
abroad with speed and agility. Our most senior intelligence officials do not have
authorities, access and accountability to do what is expected of them. Nor do they have
the power to make the great organizational changes necessary to correct these problems.

The Commission therefore recommends specific sweeping organizational changes.

More important than organizational reform is dealing with the second category of
dysfunction we have broadly defined as cultural; process over output; bureaucratic
careerism; groupthink; a law enforcement rather than preventive mindset; deep aversion
to covert operations; fear of abusive litigation. These problems cannot be solved by
organizational changes however bold. They can be changed only by appointing,
confirming and supporting proven leaders of talent and experience to the top positions of
the intelligence establishment. It is they who must sweep away the irrational security,
classification and career path obstacles to create a new, agile innovative career
environment in which excellence not mediocrity will flourish.

To accomplish such change these leaders must have new community wide authorities
over personnel policies, certain budgets and appropriations, and security classifications
and clearances.

Some of these changes can be done by executive order, many will require legislation, and
to succeed all will require major changes in Congressional oversight. We are making
specific recommendations for congressional oversight reform.

To implement its recommendations, the Commission believes the President should

establish, through Executive Order, a six-month Intelligence Transition Task Force to: 1)
help develop legislation to implement the reforms; 2) develop a strategy for
implementing the reforms; and 3) report to the board on the status of the implementation.
This Task Force would report to a board consisting of the White House Chief of Staff, the
National Security Advisor and the Chairman of the President's Foreign Intelligence
Advisory Board. The Task Force should include selected commissioners from the 9/11
and Iraq commissions and a staff selected from the law enforcement and intelligence
communities.

The Commission recommends the following:

1) Establish a National Intelligence Authority (NLA), which would be headed by a
Director of National Intelligence (DNI). Confirmed by the Senate, with Cabinet rank
(Executive Level One), without a cabinet department. The United States Intelligence
Community as it is currently organized would be disbanded.
a) The National Intelligence Authority would include the existing and planned
capabilities of: the CIA; the FBI National Security Intelligence Service, the
national imagery capabilities of the NGA; the national signals intelligence
capabilities of the NSA; the national imagery, signals, and communications
acquisition programs and infrastructures of the NRO; the advanced science and
technology capabilities of the CIA, NSA, and NRO; other specialized national
collection activities; and the all-source analytic capabilities of the CIA and the
FBI.
b) The mission of the DNI is to oversee and direct the global network of human and
technical systems and organizations to collect, analyze and disseminate national
intelligence to the President and the members of the National Security Council,
whether the information originates within the United States or abroad. He/she is
to have the powers and authorities necessary to bring about such changes as may
be required to accomplish that mission.
c) The DNI would have the authority to nominate to the President the Director of
CIA, the Directors of NSA, NGA and NRO with concurrence of the SECDEF,
and Director of FBI's National Security Intelligence Service (NSIS) with
concurrence of the Attorney General.
d) An executive office for executing his/her responsibilities would support the DNI
with such functions as: personnel management, security policy, information
technology policy, budget and financial control, an inspector general,
institutionalized lessons learned reviews, and support to customers, particularly
the Department of Defense and the Department of Homeland Security.
e) Establish the position of Chief of National Intelligence which would be the senior
career intelligence professional (Executive Level Two) who would support the
DNI in his role as the President's senior intelligence executive and who would be
responsible for conveying intelligence to the President, the NSC and the DSC.
i) The National Intelligence Authority would be organized by national security
missions established by the President. Each mission area (e.g., global
terrorism, WMD proliferation, counterintelligence, China, Russia, emerging
threats, etc.) would be led by a Director General of National Intelligence. The
Director Generals would report to the Chief of National Intelligence. The
Director Generals would be the government's highest-ranking intelligence
 official (Executive Level Three) responsible for their mission area and
responsible for both analysis and operations.
ii) The national intelligence agencies - CIA, NSA, NGA, NRO, NSIS, and other
national capabilities - would be responsible for training, equipping, and
manning the national intelligence mission areas and supporting the Director
Generals of National Intelligence. The heads of these agencies would report
to the Director of National Intelligence (Figure One).
2) Integrate Domestic Intelligence while ensuring civil liberties by creating within FBI
an independent National Security Intelligence Service (NSIS) with complete access to
all investigative intelligence and without law enforcement culture. Director of NSIS
to be selected by DNI, with concurrence of FBI.
3) Establish an NIA Chief of Intelligence Personnel to establish NIA-wide standards of
recruitment, training, certification and promotion to provide flexible assignments and
career paths across intelligence agencies and areas; to ensure the regular infusion
throughout the ranks of agents, analysts, and managers of thinkers from diverse
disciplines and professions with and without the government; to establish reserve
programs similar to the uniformed services, and generally to foster innovation and
creativity and stifle bureaucratic careerism.
4) Strengthening competitive analysis to ensure the President and senior national
security officials receive accurate, timely, complete and well-vetted intelligence
products; as well as the complete vetting of government views and improved analytic
quality control measures. Strengthen all-source, strategic intelligence analysis
capabilities within the CIA/DI on transnational topics through: required overseas
tours by analysts, additional training in transnational issues, significant financial
incentives for skills development, as well as financial incentives to recruit linguists,
additional analysts with area or scientific expertise.
a) Strengthen and keep independent, departmental intelligence elements like the
Defense Intelligence Agency, the military service intelligence units and the State
Department's Bureau of Intelligence and Research. Strengthen their capability
through the setting of priorities, overseas tours, training in transnational issues,
and language training.
b) Establish an Executive Research Service (300 positions) separate from the
National Intelligence Authority and the policy departments. It would direct the
collection, translation, analysis and production of national security-related
research solely on the basis of openly available information. It would be
responsible to the National Security Council. It would contract out research and
build research relationships with academia and research organizations.
5) Fixing the information sharing problems among the intelligence and law enforcement
communities that have come to light from the investigation of the September 11
attacks:
a) A new approach of managing and sharing "meta-data" should be established to
combine information about intelligence reporting, open sources and law
enforcement cases into one database. This meta-data would provide "pointers" to
 the content generated by, and protected within, the intelligence collection
agencies including the FBI. This meta-data file would be available to all analysts
for research. [This approach is similar what was recommended by the Scowcroft
Review and the Markle Foundation Task Force on Creating a Trusted Information
Network for Homeland Security]
b) Establish the position of NIA Chief Information Officer, independent of any
intelligence agency, reporting to the DNI, for oversight of all major IT systems
and the establishment of standard IT protocols across intelligence and law
enforcement agencies to facilitate seamless, real time information integration.
c) The NIA/CIO would execute a strategy to phase out legacy systems, acquire
compatible replacement systems, make recommendations to the DNI on
information security and approve all major information technology acquisitions in
the NIA.
6) Establish an NIA Chief of Security responsible for developing a common set of
security rules, guidelines and programs across the National Intelligence Authority to
allow for improved information sharing, the breakdown of unnecessary
compartmentation, the increased protection of vital sources and methods and a
streamlining of the background investigation process for new hires.
7) Strengthen human source intelligence both overseas and domestically through a
phased national strategy to migrate case officers out of official cover status and out of
US embassies abroad; and the expansion of the FBI's NSIS as a domestic collection
arm of the Bureau. This transformation of our HUMINT capabilities, both
domestically and abroad, should be a national priority with a "fully operational
capability" achieved within three years. CIA should accelerate its current efforts to
reduce the nation's dependence on foreign liaison services, "walkins," and expand
unilateral collection in all regions, whether the US has a presence there or not.
8) Strengthen DNI financial controls over the National Intelligence Authority by
establishing an appropriation for national intelligence and developing the associated
financial systems for managing that appropriation.
a) Declassify the aggregate budget amount for national intelligence. Details of the
appropriations act would be classified and reported in a consolidated classified
annex to the President's Budget prepared at the direction of the DNI.
b) Establish a "National Intelligence Appropriations Act" that would include
funding for: 1) the Intelligence Community Management Account, 2) the Central
Intelligence Agency, 3) the National Security Agency, 4) the National Geospatial-
Intelligence Agency, 5) the National Reconnaissance Office, 6) the FBI's
National Security Intelligence Service, and 7) other national intelligence
capabilities not identified above.
c) The National Intelligence Appropriations Act would be made to the Director of
National Intelligence, who would be held accountable for executing those funds
and their oversight. To meet this responsibility, the DNI would appoint a Chief
Financial Officer (CFO) for the National Intelligence Authority.
d) The CFO would allocate resources to the national intelligence agencies in
accordance with OMB apportionment guidelines, the DNI's direction, and the
authorization and appropriations acts.
04/22/04 THU 15:47 FAX ®002
-22-2004 14=14

April 13, 2004

The Honorable Susan M. Collins

United States Senate
Washington, D.C. 20510

The Honorable Carl Levin

United States .Senate
Washington, D.C. 205 10

Dear Senator Collins and Senator Levin:

Thank you for your letter regarding the division of responsibility among certain counterterroiism
elements of the United States Government (USG). We have provided you and your staff with
information describing the mission, responsibilities, and relationships of the Terrorist Threat
Integration Center (TTIC), the Department of Homeland Security's Information Analysis and
Infrastructure Protection Directorate (LAIP), and other government elements with terrorism
analysis responsibilities. Based on your questions, this letter focuses on counterterrorism
analysis within the Federal government

Primary Responsibility for Terrorism Information Analysis

TTIC has the primary responsibility in the USG for terrorism analysis (except information
relating solely to purely domestic terrorism) and is responsible for the day-to-day terrorism
analysis provided to the President and other senior policymakers. We presume that all terrorism
information has a link to international terrorism unless determined otherwise. Where
information has been determined to have no such link to international terrorism, the FBI has
primary responsibility with regard to the analysis of such information. This FBI responsibility,
like TTTC's, is independent of where the information was collected.

IAIP has the primary responsibility for matching the assessment of the risk posed by identified
threats and terrorist capabilities to our Nation's vulnerabilities. IAIP is also responsible for
providing the full-range of intelligence support — briefings, analytic products, including
competitive analysis, "red teaming," and tailored analysis responding to specific inquiries - to
the DHS Secretary, other DMS leadership, and the rest of DHS. DHS also has significant
responsibilities with regard to "purely domestic" terrorism threats, particularly in support of its
critical infrastructure protection, Customs, immigration, and other statutory responsibilities.

USG counterterrorism elements retain such terrorism analytic responsibility and capability as
necessary to support their own counterterrorism mission, and to carry out specific functions
assigned to them by statute or Presidential directive.
THU 15:47 FAX p.03
14=14

Terrorist Threat Integration Center (TTIC)

TTIC has no operational authority. However, TTIC has the authority to task collection and
analysis from Intelligence Community agencies, the FBI, and DHS through tasking mechanisms
we will create. The analytic work conducted at TTIC creates products that inform each of
TTIC's partner elements, as we]] as other Federal departments and agencies as appropriate.
These products are produced collaboratively by all of these elements, principally through their
assignees physically located at the TTIC facility, but also working closely with their
headquarters elements.

The DCI Counterterrorism Center (CTC)

The Director of Central Intelligence Counterterrorism Center (CTC) conducts worldwide

operations and collection activities to detect, disrupt, and preempt actions of al-Qa'ida and other
terrorist groups. CTC continues to conduct analysis to support its mission. CTC may conduct
other analysis at the direction of the DCI or at the request of the Director of TTIC. The DCI, in
consultation with the other leaders of the Intelligence Community and no later than June 1,2004,
will determine what additional analytic resources will be transferred to TTIC.

DHS Directorate of Information Analysis and Infrastructure Protection (IAIP)

Whereas TTIC's terrorism analytic mission is global in nature, lAIF's mission is singularly
focused on the protection of the American homeland against terrorist attack. This is unique
among all intelligence, law enforcement, and military entities whose missions both extend
worldwide and to subject-matter areas and purposes well beyond counterterrorism. This focus
allows IAIP to concentrate its energy on protecting against threats to homeland targets, while
working closely with other USG components that have overseas-focused, or both oversees- and
domestic-focused, missions, to ensure unity of purpose and effort against terrorism worldwide.
IAIP brings several unique capabilities to the US Government The Directorate maps terrorist
threats to the homeland against our assessed vulnerabilities in order to drive our efforts to protect
against terrorist attacks. Furthermore, through its combination of intelligence analysis and
infrastructure assessment, IAIP is able to independently analyze information from multiple
Intelligence Community sources, as well as from its fellow DHS entities. Lastly, IAIP is able to
provide key information to the American citizenry, accompanied by suggested protective
measures.

lAIP's singular focus on the homeland allows it to carry out ail missions assigned to it by the
Homeland Security Act, including the following:

• Facilitating the creation of requirements, on behalf of the Secretary of Homeland Security

and DHS leadership, to other DHS components, and to the larger intelligence, law .
enforcement, and homeland security communities, in order to integrate homeland security
information from all sources with vulnerability and risk assessments for critical infrastructure
prepared by IAIP;

• Providing the full-range of intelligence support -- briefings, analytic products, including

competitive analysis, "red teaming," and tailored analysis responding to specific inquiries,
and other support - to the DHS leadership and the rest of DHS;
 THU 15:48 FAX
5-22-2004 14:14

• Working with the FBI and others to ensure that homeland security-related intelligence
information is shared with others who need it, in the Federal, state, and local governments, as
well as in the private sector;

• Serving as the manager for collection, processing, integration, analysis, and dissemination for
DHS' information collection and operational components (Coast Guard, Secret Service,
Transportation Security Administration, Immigration and Customs Enforcement, Customs
and Border Protection), turning the voluminous potentially threat-related information
collected every day at our borders, ports, and airports, into usable and. in many cases,
actionable intelligence; and

• Supporting the DHS Secretary's responsibility to administer the Homeland Security

Advisory.System, including independently analyzing information supporting decisions to
raise or lower the national warning level.

FBI

The FBI's Countarterrorism Division (CTD) has three core responsibilities: I) managing
counterterrorism operations on the territory of the United States to detect, disrupt, and preempt
terrorist activities; 2) conducting analysis to support its own operations; and 3) producing and
disseminating to all Federal counterterrorism elements and, as appropriate, State and local law
enforcement officials, intelligence reports resulting from these operations.

FBI analysis within CTD exploit all available intelligence and information to drive FBI terrorism
operations (hat will lead to the identification and disruption of terrorist activities. FBI also has
the responsibility for analyzing law enforcement and investigative information that has been
determined to have no connection to international terrorism-

It is important to identify the role of me new FBI's Office of Intelligence as it relates to the
division of responsibility among certain USG counterterrorism elements. The FBI Office of
Intelligence, which provides CTD's imbedded analytic capability, also performs the analytic
work necessary to inform the FBI's collection tasking. This analytic product is designed purely
to guide the work of the FBI in responding to collection requirements. In addition, the Office of
Intelligence provides the full range of intelligence support to FBI components.

Finally, working with IAIP, TTIC, and other USG counterterrorism elements, CTD and the FBI
Office of Intelligence ensure that all terrorism information collected by FBI, both abroad and
within the United States, is shared with, and integrated into the work of, other USG
counterterrorism elements in accordance with law, Presidential policy and direction, and written
agreements such as those referenced herein.

Conclusion

Regardless of the particular analytic roles of any USG counterterrorism element under our
control, we have committed all such elements, consistent with the President's policies, to share
terrorism information (as defined by the Memorandum of Understanding on Information
Sharing, dated March 4,2003) with one another to ensure a seamless integration of such
 A THU 15:48 FAX 0005
.^R-22-2004 14*15 P>05

information. Nothing in this explanatory letter is intended to modify the definitions or

obligations of this MOU or other relevant directives or agreements. •

The President and Congress have not directed, and. as a matter of effective government and •
common sense, should not direct, that all USQ functions related to terrorism, including defense,
intelligence, domestic law enforcement, diplomatic, economic, and a host of others be carried out
by a single department or agency. In order both to ensure that no vital piece of intelligence is
missed and to ensure that all departments and agencies, as well as our national leadership,
receive the best possible analytic support, it is necessary to treat the analysis of terrorism-related
information as a shared responsibility.

We look forward to continuing to work with your Committee as we strive to enhance our ability
to protect our Nation from terrorists seeking to harm us. If you have any questions about this
matter, then please have your staff contact Phil Lago with the Director of Central Intelligence at
703-482-6590, or Eleni Kalisch with the Director of the Federal Bureau of Investigation at 202-
324-5051, or Ken Hill with the Secretary of Homeland Security at 202-282-8222, or Cymhia
Bower with the Director of the Terrorist Threat Integration Center at 703-482-3354.

Sincerely,

Thomas f. Ridge Robert S. Ml

Secretary, Director.
Department of Homeland Security Federal Bureau of Investigation

•rgeJ. Tenet S y/JohnO. Br

Director of Central Intelligence ( ^/ Director,
Terrorist Threat Integration Center

•TOTflL P.05