How To Fix Our Intelligence

By Michael Duffy/Washington

Maybe it's just as well that in those frightening days after Sept. 11 the nation didn't know what was in the CIA's files about terrorist plots to hijack a plane and fly it into the Eiffel Tower. Or about the secret memos that had been rocketing back and forth between intelligence agencies with titles like "Bin Laden Planning High-Profile Attacks" and "Islamic Extremist Learns to Fly." Or that CIA chief George Tenet looked around in the summer of 2001 and saw that "the system was blinking red." Or that the FBI's chief of counterterrorism said he wished he had 500 analysts tracking the army of Osama bin Laden in those days--"instead of two." Or that few of the 56 FBI field offices around the country could remember receiving any of the special alarms that National Security Adviser Condoleezza Rice says she ordered up before the Twin Towers came crashing down. Had Americans known then that so many worries and so many warnings over so many years had produced so little response in the government agencies assigned to protect us, the future would have looked far scarier on Sept. 12 than the images that had just been burned into the country's heart and soul.

But there had to come a time when the fog would lift and everyone would have to talk about how much was known and why the system had failed; about what had been fixed since, what had not been and what could not be. The 9/11 commission hearings last week finally picked the lock on the most unsettling parts of the 9/11 attacks: how close the government had come to sensing the plot, how far it remained from being able to stop it and how little Americans knew of either tale until now. "There are a lot of problems leading up to 9/11," panel chairman Thomas Kean told TIME, "and the suspicion is that some of them aren't yet fixed. We can't afford that as a country."

Because it has been an almost open secret in Washington for years that the government knew more about the 9/11 plotters than it publicly admitted, it's easy to forget that the full story was almost never told at all. Congress waited almost a year before it formed the panel in 2002, and the Bush Administration fought its creation, its budget and then its duration. But two years of foot dragging created its own momentum for change: the more the White House fought the commission's requests, the more the commissioners became convinced that radical change was needed. By the time they met in public last week for the 10th time, most of them had come to think that a thorough overhaul of the way the nation organizes, collects and distributes intelligence was necessary. Former Navy Secretary John Lehman, a Republican, warned the CIA's Tenet last week, "There is a train coming down the track. There are going to be very real changes made."

CAN THE FBI BE SAVED?

Sensing the inevitable, President Bush moved quickly last week to get ahead of the curve. He opened the door, at least in theory, to naming a new, all-powerful Director of National Intelligence to oversee 15 intelligence agencies. "Let the discussions begin," he said. "And I won't prejudge the conclusion."

Whether Bush and Congress, which would have to approve any major reforms, can truly transform the FBI and the CIA is anyone's guess. Neither political party is overflowing with will--or goodwill--at the moment, and big changes have not been the capital's forte for a decade or more. Washington has not been sitting on its hands since 9/11, but the repairs it has made in the way the feds gather and share intelligence have come mostly at the margins, little fixes to huge federal bureaucracies--in the words of Tenet, evolutionary, not revolutionary, change. That's partly because Washington has been so distracted, mounting and managing two unfinished wars, that it hasn't had time to take itself apart and figure out what's broken. The other reason is that the two agencies most in need of reform--the FBI and the CIA--over the past 60 years have become famously hidebound and self-protective creatures. As four or five outside groups launched probes of--and proposed changes to--FBI and CIA activities after 9/11, the bureau and the agency played a shrewd, wait-'em-out game, allowing small changes proposed by outsiders but drawing a hidden "line of death" at anything dramatic, especially if it undercut their roles, their missions and, most of all, their budgets.

Perhaps because it was the most dysfunctional agency of all, the FBI has done the most to try to heal itself since 9/11. It is practically impossible to adequately describe how unfit the FBI has become over the past 25 years. The bureau had a long string of abysmal failures that included the botched standoff at Ruby Ridge and the betrayal by Robert Hanssen, who spied for the Russians for years while working inside the FBI. And many of the things that went "according to the book" inside the FBI made no sense at all. For years agents were barred from searching open sources, such as the Internet, without first opening a formal investigation. Agents had a deeply ingrained habit of keeping information to themselves and filing paper reports. There was no computer network permitting broad searches for terms like Arabs and flight schools. The FBI's greasy pole was tilted, leaning away from counterterrorism work and toward the traditional pursuit of such crimes as Mob activity, kidnapping and white-collar offenses. Intelligence work? That was the last thing an up-and-coming agent wanted to do. "Traditional agents who weren't good on the street were put into intelligence," said Jack Lawn, a veteran FBI agent who later ran the Drug Enforcement Administration. "There was no measure of success on that side. Convictions, fines, savings and recoveries were the things that [J. Edgar] Hoover pounded into us as important."

Some things have changed. Under Director Robert Mueller, who took over the FBI a week before 9/11, the bureau has made counterterrorism one of its top three priorities and tried to get its 11,881 agents to do something they were for years warned against: work proactively. Meanwhile, the bureau has increased the number of counterterrorism agents from 1,344 to 2,835, counterterrorism analysts from 218 to 406 and linguists from 555 to 1,204. Mueller has made a priority of finding people who don't want to wear a badge or a gun and are simply good thinkers, people who can look at seemingly unrelated events and connect the dots. Agents are now permitted to attend public gatherings in mosques and other religious and academic settings, search the Internet and mine commercial databases used by the financial-services industry. And "the wall"--a set of legal rules that kept agents working on secret intelligence-gathering missions from talking to prosecutors about their observations--has been bulldozed. "Mueller is changing the culture," says Representative Frank Wolf, who oversees the bureau's budget on Capitol Hill. "He's changing attitudes." Will that be enough? Wolf pauses a minute, and then says, "There is a passage in the Bible about putting new wine in old skins."

Other FBI experts echoed this, saying Mueller has the right idea but adding that the layers of agents and bureaucracy beneath him are reluctant to follow his direction. The bureau has been slow to recruit sources in Islamic circles in the U.S., and a top FBI official told the 9/11 panel that while the FBI knows "10 times" more about Islamic militants in the U.S. than it did before 9/11, "its knowledge is at about 20 on a scale of 1 to 100." Despite its recent hiring boom, the bureau still lacks sufficient Arabic, Urdu, Farsi and Pashto linguists. In a preliminary report, the commission said the FBI fails to translate "thousands of hours" of audio-surveillance tapes "in a timely manner." When conversations of suspected terrorism-related subjects are translated, the commission concluded, they are "usually not disseminated broadly, not uploaded into a searchable database and not systematically analyzed for intelligence value." Mueller responded that all counterterrorism tapes are reviewed within a day, while translations in criminal cases such as fraud may be postponed.

A shortage of surveillance specialists makes round-the-clock monitoring of suspects difficult, if not impossible, in many cities. This means that if the FBI tracks down someone dangerous in, say, San Antonio, Texas, it might not be able to keep an eye on him. Despite Mueller's focus on terrorism, agents are sometimes pulled away to handle traditional criminal cases. A long-awaited and badly needed computer overhaul is overbudget and behind schedule. Which means, the commission stated, "the FBI still does not know what's in its files." A longtime FBI analyst put it this way: "The FBI director wants to change. The question is whether anyone below agrees with him."

"HEY, WE'RE THE CIA ... "

If the FBI is somewhat open to outside reform, the CIA is ever on guard against it. The agency has always been better than the FBI at doing bureaucratic judo, working the press or finding a CLASSIFIED stamp for documents that it may not want to see the light of day. The commission found and disclosed a number of these last week that suggested the CIA was slow to report, if not detect, the jihadist army that was forming on the horizon in the 1990s. The commission reported that though al-Qaeda was formed in 1988, the CIA "did not describe" the organization comprehensively on paper until 1999. For years the agency believed that bin Laden was a financier rather than an engineer of terrorism--even after it received what a commission report called "new information revealing that bin Laden headed his own terrorist organization, with its own targeting agenda and operational commanders." And though the CIA drafted "thousands" of reports on aspects of al-Qaeda's operation beginning in June 1998--some of them for the "highest officials in the government," the panel said--the agency never produced an "authoritative portrait of [bin Laden's] strategy and the extent of his organization ... or the scale of the threat his organization posed to the United States."

The commission found that the CIA shares some of the FBI's recessive genes: 18 months passed between the time the agency was told that hijacker Khalid al-Midhar had obtained a U.S. visa and the time the CIA put his name and that of his traveling companion, also a hijacker, on a government watch list. Tenet told his top managers in 1998 that the CIA was "at war" with bin Laden, but the word never really filtered down through the agency, much less to other arms of the intelligence community. The CIA had follow-through problems. The German government gave Langley's Counter Terror Center a tip in 1999 about a terrorist suspect named Marwan, along with a phone number in the United Arab Emirates, but the CIA was slow to run it down--and never went to overseas governments for help. Marwan turned out to be Marwan al-Shehhi, the pilot of United Airlines Flight 175, which crashed into the South Tower of the World Trade Center.

In the face of the commission's preliminary findings, the CIA seemed unable to decide whether to apologize or come out swinging. Tenet acknowledged that the CIA "made mistakes" and warned that it would take an additional five years to rebuild the clandestine service. In what is perhaps the closest anyone in the Bush Administration has come to a formal acknowledgment of responsibility, Tenet said, "We all understood bin Laden's attempt to strike the homeland, but we never translated this knowledge into an effective defense of the country." But Cofer Black, head of the CIA's clandestine service who holds the storied title of director for operations, was unbowed. "I've heard people say this country wasn't at war. I want to tell you, Mr. Chairman ... we conducted ourselves at war ... We did the best we could under the law and with the resources provided and under our defined rules of engagement."

That attitude seemed only to feed the commission's growing appetite for reform. "We've been struck," said Lehman last week, "by a real difference between our interaction with the FBI and our interaction with the agency. The bureau ... has fundamentally admitted they're an agency that is deeply dysfunctional and broken ... whereas the attitude we kind of get from the CIA is ... 'Hey, you know, we're the CIA,' ... kind of a smugness and arrogance toward deep reform."

IS AN INTEL CZAR NEEDED?

Wherever the commission is headed--it is expected to issue a unanimous report in July--it's not clear that the Bush team is in a mood to go along. A handful of congressional Republicans called for the resignation of commission member Jamie Gorelick after Attorney General John Ashcroft in his testimony blamed her for erecting the infamous "wall" between intelligence and criminal investigations when she was Deputy Attorney General under Clinton. As it turns out, Gorelick had simply distilled case law going back to the early Reagan Administration, and Ashcroft's Justice Department abided by the same policy for a time even after 9/11. Commission Republicans were--to a person--privately steamed at Ashcroft for his move, and Democrats thought they saw the hand of the White House hidden in the gambit.

Even in this environment, some changes are certain, particularly at the FBI. House Republican Wolf is preparing legislation that would create what he calls a "service within the service" at the FBI to focus on intelligence gathering, not law enforcement. It would be staffed with its own corps of spies recruited from college campuses, the CIA and other agencies. According to his allies in Congress, Mueller is leaning toward this idea himself. Meanwhile, support is growing on the Hill for a plan drafted by two-time National Security Adviser Brent Scowcroft that would create a new intelligence czar with budget and program authority over the CIA and nearly a score of other intelligence units now under the Pentagon's control.

The change is long overdue. When the CIA was created in 1947, the Director of Central Intelligence was supposed to become head of all the intelligence networks, government-wide. But over the years the Pentagon created its own intelligence arms, and it now commands the lion's share of intelligence budgets, much of them spent on satellites. CIA directors have complained of this split-screen arrangement for years, noting that they can hardly be responsible for solid intelligence if they don't control the purse strings. Two years ago, Scowcroft, acting as chairman of the President's Foreign Intelligence Advisory Board, proposed to fix that disconnect once and for all.

But in the wake of 9/11 and the apparent failures of the U.S. intelligence community, Bush quickly shelved the Scowcroft plan. The report was so sensitive that Bush has yet to provide a copy to Congress, and Scowcroft was not allowed to give the 9/11 commission a detailed brief on its findings. The plan went into a coma in large part because Secretary of Defense Donald Rumsfeld opposed any dilution of Pentagon authority over the spy networks. For months no one at the White House wanted to tangle with him, but that fear may have waned. Tenet has long been been thought to support the Scowcroft plan but can't say so without angering Rumsfeld, something Tenet more or less admitted last week. "I'm sitting in the middle of a structure," he said. "I do have a relationship with the Secretary. I care about it a great deal."

How will we know if Bush is serious about reform? One member of his party put it this way: "The question will be whether the guy at the top [in charge of intelligence] has any real budget authority. If he doesn't, it's not real." Kean told TIME last week that he was heartened by Bush's sudden interest in an intelligence overhaul. "I think the good part of the week was the President's statement that he's open to change." But many think Bush is merely buying time, weighing his options and waiting to gauge the reaction when the commission issues its final report. That was the approach he took the last time big changes were proposed, when Congress threatened in 2002 to create a new Department of Homeland Security. Bush opposed that move until it became inevitable. And then he made it his own.

--Reported by Perry Bacon, Timothy J. Burger, John Dickerson, Viveca Novak, Elaine Shannon and Douglas Waller/Washington and Helen Gibson/London

With reporting by Perry Bacon, Timothy J. Burger, John Dickerson, Viveca Novak, Elaine Shannon and Douglas Waller/Washington and Helen Gibson/London