HEARING OF THE SENATE HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS COMMITTEE SUBJECT: LESSONS AND IMPLICATIONS OF THE CHRISTMAS DAY ATTACK: INTELLIGENCE REFORM AND INTERAGENCY INTEGRATION CHAIRED BY: SENATOR JOE LIEBERMAN (ID-CT) WITNESSES: BENJAMIN POWELL, PARTNER AT WILMERHALE AND FORMER GENERAL COUNSEL IN THE OFFICE OF THE DIRECTOR OF NATIONAL INTELLIGENCE; JEFFREY SMITH, PARTNER AT ARNOLD & PORTER AND FORMER GENERAL COUNSEL OF THE CENTRAL INTELLIGENCE AGENCY; RICHARD NELSON, SENIOR FELLOW AND DIRECTOR OF THE CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES’ HOMELAND SECURITY AND COUNTERTERRORISM PROGRAM LOCATION: 342 DIRKSEN SENATE OFFICE BUILDING, WASHINGTON, D.C. TIME: 10:33 A.M. EDT DATE: WEDNESDAY, MARCH 17, 2010

Watch the video of the Testimony here

SEN. LIEBERMAN: Good morning. The hearing will come to order.

Senator Collins and I apologize that two votes went off that we obviously had to be on the floor for. But we thank you for your patience. Today we continue our committee’s inquiry into the intelligence reforms adopted after 9/11. We do so in the fresh context of the failed terrorist attack on Christmas Day, which exposed continuing gaps in our homeland defenses.

Today’s hearing, our fifth in this series, will specifically examine the authorities of the Director of National Intelligence and the National Counterterrorism Center. Our purpose is to determine if those authorities are sufficient or in need of additional reform.

Creation of the DNI and the NCTC were the most critical recommendations made by the 9/11 commission to improve our ability to protect the American people against the threat of terrorism.

More than five years have passed now since the Intelligence Reform and Terrorist Prevention Act, the so-called 9/11 commission act, was signed into law. And that’s why last fall our committee began this series of oversight hearings.

The Christmas Day incident only added urgency to our task and underscored, I think, how much this is a continuing effort to strengthen our ability to detect and counter potential terrorist threats.

In recent weeks, we’ve held hearings on issues raised by the Christmas Day bomber attempt, most recently examining our watch list and prescreening systems. Next month we’re going to hold hearings on our visa-issuance procedures and intelligence analysis and information sharing.

But today, as I said, we’re going to focus in on DNI and NCTC. We want to consider instances in which these two entities have had difficulty carrying out their intended missions, as well as, of course, the many times in which they’ve done exactly what we hoped they would do.

We want to discuss also what, if anything, Congress should do to strengthen the abilities of the DNI and NCTC to respond to terrorist and other national-security threats, perhaps different threats that have emerged since 2004.

The 9/11 commission concluded that no single person or agency was in charge of our sprawling intelligence community, and therefore recommended creation of the Director of National Intelligence to lead the 16 intelligence agencies of our government, including, of course, the Central Intelligence Agency, and to act as principal adviser to the president on matters of intelligence.

The 9/11 commission act gave the DNI a range of authorities to better integrate the intelligence community to promote what the 9/11 commission called the unity of effort that they found was absent before 9/11. The 9/11 commission further concluded that no one was responsible for coordinating the critical activities of key agencies involved in the fight against terrorism. As the commission memorably concluded, no one was in charge of the various efforts that had been ongoing to capture or kill Osama bin Laden.

So the Intelligence Reform Act gave — created the National Counterterrorism center and gave it the responsibility to conduct a new but critically important function in our government, which we called, the statute called strategic operational planning; that is, planning counterterrorism activities on a government-wide basis, integrating all elements of our national power to fight terrorism, and assigning roles and responsibilities to departments and agencies for specific activities based on that planning.

In many instances — many, many instances — the DNI and NCTC have used their authorities very well and implemented critical policies and organizational initiatives to improve intelligence functions and better protect the American people. The NCTC has played a vital role in coordinating federal, state and local agencies to prevent an ongoing series of terrorist plots against the United States, including some recent remarkable acts of prevention, including the arrest of Najibullah Zazi and David Headley.

But in other instances, such as the Christmas Day bombing, Omar Farouk Abdulmutallab, failures have occurred. In key areas, progress at fully implementing reforms has been slow, perhaps due to institutional or bureaucratic resistance from some of the 16 agencies that report to the DNI, or perhaps due, in other cases, simply to insufficient resources or inadequate leadership. Those are the questions that we want to ask today about where there are shortcomings, why they have occurred.

I also want to discuss the policy and legal framework for intelligence-community information systems. Last week the deputy director of the NCTC testified that policy, legal and private-related matters impede the development of advanced search-and-discovery tools that could help analysts spot potential terrorist plots in a way that may have prevented Abdulmutallab from ever boarding that Northwest Flight 253.

This is really a question — as we’ve discussed, you know, after 9/11, everyone concluded that there was an inability to connect the dots in part because various intelligence agencies and other agencies of our government were not sharing information and the dots were not on the same table.

I think our feeling now is that the dots are on the same table. There is a lot of sharing going on. But there are so many dots on the table that it’s hard to many times make the connections that are necessary between them. And we’re focused now on the capacity of technology to assist us in doing that, because for humans it’s very hard to do it, particularly in a timely way. So I think some of the barriers that were cited last week are ones we’ve got to find a way to overcome in the interest of the homeland security of the American people.

I want to thank the three of you, who each bring very relevant and extensive experience to us, for appearing before the committee and sharing your perspectives on the issues I’ve mentioned, and others as well. And I look forward to the discussion after your testimony.

Senator Collins.

SEN. SUSAN COLLINS (R-ME): Thank you, Mr. Chairman.

Over the past several months, this committee has examined the intelligence failures surrounding the attempted terrorist attack on Christmas Day. As part of our due diligence, as the chairman has indicated, we are also evaluating the impact of the Intelligence Reform and Terrorism Prevention Act of 2004 on our nation’s efforts to combat terrorism.

Today we focus anew on one of the most significant issues that we grappled with in the drafting of the intelligence-reform law, and that is the extent of the authority for the Office of the Director of National Intelligence.

The DNI was established to be, in Secretary Powell’s memorable words, the quarterback of the intelligence community, to coordinate the activities of the 16 intelligence agencies scattered across the federal government. Those 16 diverse components carry out an array of missions, each with its own view about how best to carry out its assignment. The intelligence community is resistant to change. But change is precisely what the Intelligence Reform Act directed the DNI to achieve.

To that end, we provided a set of authorities that the DNI would use as tools to encourage, cajole, and in some cases compel action. These authorities included the ability to access all intelligence information collected by the federal government, the lead role in developing the annual National Intelligence Program budget and in ensuring its effective execution; some ability to transfer funds and personnel within the intelligence community — not as much authority in that area as I would have liked to have seen; the ability to manage and direct the tasking, collection, analysis, production and dissemination of intelligence; the authority to develop standards and guidelines to ensure maximum availability of intelligence information within the intelligence community.

These authorities should be largely sufficient for the DNI to accomplish its mission, provided that they are wielded effectively and with the strong support of the president. As Governor Kean and Representative Hamilton testified before this committee in January, the DNI’s ability to lead the intelligence community depends on the president defining the role and giving him the power and authority to act.

The question is, however, whether or not these authorities have been used as often, as effectively, and in the manner that Congress intended. For example, does the institutional resistance of agencies like the CIA make the use of these authorities such an onerous ordeal that the DNI is hesitant to embark upon the journey?

Is the DNI concerned that exercising these authorities more aggressively might create ill will that will make it even more difficult to coordinate activities in other areas? Or are these authorities being undercut by insufficient support from the president or the National Security Council, both of which need to be active to ensure that the DNI works as intended?

As the chairman has indicated, we are also taking a close look at the National Counterterrorism Center. I think that that is as important a reform as the creation of the DNI. And I think, as the chairman has indicated, we’ve seen great successes from the center pooling information that led to the Zazi and Headley cases being brought to the attention of law enforcement and the individuals arrested. I don’t think that would have happened prior to the creation of the NCTC. On the other hand, we’ve also seen the NCTC not work as well as intended in the case of Abdulmutallab.

So our witnesses today offer a great wealth of practical experience in the day-to-day operations of the intelligence community, both pre- and post-reform, and I look forward to hearing their insights on these important questions.

Thank you, Mr. Chairman.

SEN. LIEBERMAN: Thank you very much, Senator Collins.

Senator Collins is right that our three witnesses have been in the system and continue to follow it. So they speak from some experience. In other words, their judgments are informed by experience. One can disagree or agree with them, but they come with some background.

At some point in these deliberations, we’re going to speak in open or closed session with some of the people who are running the agencies now. But we thought this would be a very good way to start.

Mr. Benjamin Powell, we’ll ask you to testify first; former DNI general counsel and currently a partner in the law firm of WilmerHale.

MR. POWELL: Thank you, Senator Lieberman and Senator Collins.

I appreciate the opportunity to appear before the committee to discuss intelligence reform and interagency integration. I’m particularly honored to appear before this committee, given the historic role in intelligence reform played by this committee under the leadership of Senator Lieberman and Senator Collins.

I should also note I’m honored to appear with Jeff Smith and Ozzie Nelson. Jeff is one of the finest national-security lawyers and policy experts in the world on these matters. He is an example to all of us who have worked in this area. Ozzie Nelson is an experienced operator, and the nation is simply safer because of his long service in the military and his work at the National Counterterrorism Center.

I appear before the committee in my personal capacity, and the views I express are my own. I’ve separately provided the committee my biography, and will refer you to it for my background. As general counsel to the first three Directors of National Intelligence, I’ve seen the implementation of the Intelligence Reform Act at the ground level. And while the work of intelligence transformation and integration can appear quite distant from the daily operational activity of the intelligence community, the 9/11 attacks and subsequent events have made clear that this is work with real- world consequences. The Christmas Day attack was another vivid example of the importance of an integrated intelligence community.

I see transformation as not a zero-sum game. The goal is not to diminish the authorities or the capabilities of one organization in favor of another organization such as the DNI. The goal is to have an integrated intelligence community that is more than the sum of its parts.

I want to briefly highlight three points from my written statement. First, the DNI needs senior-level support to succeed. Two, the DNI initiatives to date have been important, some vital, to our security. And finally, since it’s been the subject of much discussion over the years, I wanted to briefly touch on the size of the DNI organization.

First, the DNI needs support to succeed. This means support from the senior national-security team in the executive branch and the Congress. If he does not have that support and backing, transformation will fail. The reform legislation set up a matrix management structure. The DNI must be part director, part coordinator and part diplomat.

The nation has been fortunate to have excellent leaders of the intelligence community in my experience, both the current leaders and the former leaders.

And the nation is truly blessed that there are brave members of the intelligence community willing to undertake difficult missions around the world at peril to themselves, and at times their families and their careers. The workforce is talented, mission-oriented and wants to succeed. Our goal should be to give them the tools for success and free them from the iron-clad rules of bureaucratic behavior that distract from the one shared goal of protecting our country.

Second, the leadership of the DNI has been absolutely necessary for a number of fundamental initiatives. The DNI did not undertake these initiatives in a vacuum. Their success or failure is dependent on other parts of the intelligence community and the government. But make no mistake — the DNI’s office was a necessary organization, even if not sufficient alone. Some observers have claimed that the reform act and the subsequent implementation merely added another layer of bureaucracy and accomplished little. That simply does not reflect the reality of the past five years.

Instead of fairly meaningless charges about another layer of bureaucracy, I would hope that questions would focus on substance, such as, are these IC initiatives useful? Historically how did alternative structures perform? Did they produce the needed integration and transformation of the intelligence community?

Some of the initiatives are discussed in my statement in greater detail. These include reform of the Foreign Intelligence Surveillance Act, stand-up of the National Counterterrorism Center, implementation of joint duty, security clearance reform, deployment of technologies and innovative ways such as the analytic space and intellipedia, and critical work in the cyber area that culminated in the Comprehensive National Cyber-Security Initiative.

This list, of course, omits classified areas that took up significant time and resources of DNI leaders. A few points. Without a DNI, FISA legislation would not have been enacted, serious collection gaps would remain and would have worsened, and the nation would face greater risk. Joint duty is critical and its implementation will be a long-term project. It is an example of the investment of time and effort required to formulate and implement workable policies in the IC structure of matrix management.

Security clearance reform. This area has been a particular focus of this committee’s Subcommittee on Oversight and Government Management. The cost and delays present in the security clearance process impose a large cost on the intelligence community and the larger federal government. In November 2005, top secret investigations took 314 days to complete, with only 8 percent being completed in 90 days. I understand that currently 90 percent are completed within an average of 91 days.

In November 2005, secret and confidential investigations took an average of 153 days, with just 44 percent completed within 90 days. I understand that currently 90 percent are completed within 49 days. I also understand that the decades-old backlog of investigations, which as recently as October 2006 stood at 100,000 cases, has been eliminated. Without the DNI’s office, the nation would not have a comprehensive national cyber-security initiative and be less prepared for the cyber threat that Director Blair recently discussed in his testimony to Congress.

Finally, a quick note on the size of the DNI office. Director Blair has talked about the DNI’s responsibilities for guiding a 200,000-person, $75 billion national enterprise in intelligence. Some facts about the size of the core DNI staff. As of January 2009, Director McConnell spoke in public about a core group of intelligence professionals of 650 people. Under any method of calculation, the DNI is a very small proportion of the entire IC population.

Second, perhaps the proper size of the staff is larger or smaller than the 650 persons that Director McConnell has discussed. I’m sure as with most organizations in government there are many efficiencies and improvements in staffing that require examination. But the debate over the right number of personnel pales in significance next to the questions concerning information-sharing, collection requirements, multi-billion-dollar acquisition program oversight, analytical excellence, and a host of other issues on the DNI’s lengthy list of responsibilities.

Finally, implementation of the matrix management structure created by the Intelligence Reform Act has presented numerous challenges. Many tasks remain undone, and progress on building an integrated, innovative, and more effective intelligence community is likely to be uneven in the coming years. But continued attention on these issues and support for these efforts from the president, the Congress, and senior national security officials is vital if the DNI is to successfully lead the intelligence community into the 21st century. Thank you.

SEN. LIEBERMAN: Thanks, Mr. Powell. Excellent statement and gets us off to a good beginning. Next, Jeffrey Smith. We welcome you back to the committee, back to Congress. We’re glad to see you again. Former counsel at the CIA and currently a partner at the law firm of Arnold & Porter. Good morning.

MR. SMITH: Mr. Chairman, it’s an honor to be here. Senator Collins, a treat as always. I’m very pleased this committee is looking hard at the question of how the statute that created the DNI has worked, and I must be candid. It is not working as well as it should. To prepare for these hearings I spoke to many senior intelligence community officers, including in the ODNI. What I found was disturbing, and leads me to believe there is an urgent need for a serious, in-depth look at the organization and functioning of the American intelligence community.

Congress gave the DNI broad responsibility, but not clear authority to carry out many of these responsibilities. This confusion over authorities lies at the heart of the problem. Senior officials tell me they spend far too much time arguing about these authorities. This creates friction and occasionally anger that distracts from the accomplishment of their important missions. More disturbingly, some officers even speak about mistrust among agencies. That must be addressed.

One of the most prescient observations I heard was that we are slowly replicating the problems of the old DNI. Many believe that dual responsibilities of providing intelligence to the president on the one hand, and managing the intelligence community on the other are sufficiently distinct that they should be separated. In a sense, it’s the reasoning in the Goldwater-Nichols Act that streamlined the chain of command and clarified that military service chiefs were not to exercise operational control over their services. That responsibility rests with the combatant commanders in the field.

But all is not gloom. As Ben Powell said, there have been a lot of things that have been accomplished to the good, but problems remain. I believe the director’s authority should be strengthened in those areas that are essential to the effective management of the community, and in two areas in particular I think we should focus — information-sharing and acquisition. I think they should be clarified in operational areas where there is some overlap and inconsistency, and that goes to what is his basic role, is he the strategic advisor to the president on intelligence, does he do the president’s daily brief, or does he manage the community. Those are two jobs that are full-time jobs in themselves, and a lot of people think one person cannot do both.

There’s talk about the DNI staff being too large. One of them, I think, is the frustration with the proliferation of contract employees, not government officials who task the agencies. One example, a senior agency official told me that contractors at ODNI had recently requested detailed information about an operation. The agency responded that they were not able to comply with the request because the individuals involved in that operation simply didn’t have time to set aside the mission and respond to the request.

The response from the contractors at ODNI was to offer to send another contractor to the agency in order to answer the questions put by the contractors in the first place. The senior agency official expressed frustration that to the best of the officer’s knowledge there was not a single government employee in the loop with respect to that particular request.

Now, I’ve talked to Director Blair about this. He does not seek to micromanage the community or make excessive demands for information. But he points out that he’s got a mismatch between his responsibilities in the statute and his authority to carry them out, and I agree with Senator Collins, some of it is the manner in which they are exercised and the support from the president that has been said as key.

On information-sharing, as this committee knows, I’ve been privileged to serve on the Markle task force, which has spent a lot of time looking at this. I’m happy to talk about this in your questions, but I think there are some things that can be done with technology in terms of making information more discoverable, using an authorized use standard, and permitting data to find data, so that we can indeed not only spot the dots that we need, but then connect them.

Finally, I think on the issue of privacy we need some clear privacy guidelines. What I’ve found in my conversations is that there’s a lot of uncertainty with respect to U.S. person data, what we can do with it. The privacy colleagues on the Markle task force think that the government is being overly cautious in some circumstances, that with this technology more can be done, that this is a question of guidance and, frankly, leadership and support from the Congress.

Given my role on Goldwater-Nichols when I was in the Senate many years ago, you’ve asked me to think a little bit about how could we have a Goldwater-Nichols for the intelligence community.

I think there are a lot of things in the Goldwater-Nichols Act that could be adopted.

And one of them would be to streamline the chain of command, to think of the DNI — pardon me, a little bit as the Chairman of the Joint Chiefs and a little bit like the Secretary of Defense. I would also think of the CIA — which is one of the most difficult management issues here, as a combatant command for purposes of providing all- source intelligence to the president and conducting covert operations.

If we think of it that way, it helps, in my mind, a little bit with some of the challenges that we’ve had with respect to management. I also think we should think about creating a separate national intelligence program. The administration is taking some steps in that direction, but I encourage them and the Congress to go even further.

Mr. Chairman, I think the time has come to take a fresh look at this statute, and I’m very pleased that this committee is asking the hard questions. I think that there ought to be a systematic look at it. It could be done by the Congress; it could be done by the president using, for example, the President’s Intelligence Advisory Board; or it could be done by an outside group with the support of Congress and the president.

I’ve talked to Congressman Hamilton. As you know, they’re very interested in pursuing this. The Kean-Hamilton Commission would be a place to do it. But I think it’s important to do it. This is a good opportunity to do it. And I’m delighted, again, to be here this morning and I look forward to answering your questions.

SEN. LIEBERMAN: Thanks, Mr. Smith. Some really provocative things you said, which I look forward to taking you up on as we discuss what you said.

Next is Richard Nelson, who’s known as “Ozzie.” How many people in the room remember “Ozzie and Harriet?”

MR. NELSON: (Laughs.)

SEN. LIEBERMAN: All right, you see we’re limited now. (Laughter.)

(Laughs.) I should ask how many remember “Ricky.” Maybe that would — (laughter.) Anyway, to return to the seriousness of the moment, Mr. Nelson is a former official in the National Counterterrorism Center’s Strategic Operational Planning Section — actually director. He’s a retired Navy officer and currently is the director for the Homeland Security and Counterterrorism Program at the Center for Strategic and International Studies here in Washington.

Thank you for being here this morning.

MR. NELSON: Chairman Lieberman and Ranking Member Collins, distinguished members of the committee, thank you for this opportunity to discuss this important topic. I’m not sure if it’s good or bad to go before or after the lawyers, but I appreciate the opportunity to testify with them.

I was one of the inaugural planners assigned to the Directorate of Strategic Operational Planning, so today I’m going to focus my remarks on NCTC and its legislative role — mandated role in that capacity.

The Intelligence Reform and Terrorist (sic) Prevention Act addressed some serious weaknesses in our nation’s intelligence community and its ability to combat terrorism. In creating the DNI and the NCTC, the landmark legislation sought to improve collaboration among numerous departments and agencies that deal with our — threats to our nation’s security.

Among the Act’s most significant contributions was its recognition that the our nation’s Cold War national security organization was no longer sufficient to address the complex and myriad transnational threats that we will face in the 21st century.

As with any innovative idea, achieving the aims of legislation will come through evolution. Valuable lessons can and should be learned when ideas and concepts meet implementation. But those lessons should be leveraged to improve upon the original ideas and ensure the vision of its creators is being met. This is the case with NCTC, and particularly with DSOP.

Why do we need a stronger, more effective DSOP? In short, while numerous departments and agencies work aggressively to counter threats as they emerge, the intelligence community and, arguably, the government as a whole still lacks a truly interactive process for addressing terrorism. One needs to look no further than the failure to connect the dots on December 25th to understand why coordination is so important.

Furthermore, because so much of the effort is channeled toward the immediate exigencies of the day, the government has not devoted sufficient long-term thinking about how to develop a common, and ultimately strategic, framework for dealing with terrorism and other — (inaudible) — threats. This has become only more important as we move forward, and coordination with state and local governments becomes more critical, and the lines between the private and public sector continue to blur.

Elements of DSOP must be addressed in three key areas: mission, authorities and personnel. DSOP’s mission must be refocused to ensure its role in and value to the interagency’s CT architecture is understood. DSOP was given the broad guidance to conduct strategic operational planning. The intent was for DSOP to fill the void in counterterrorism planning between strategic-level policymaking and tactical-level operational activities.

In an attempt to close this gap, the term “strategic operational planning” was created and tasked to DSOP. The conflating of the terms, “strategic” and “operational,” has hindered DSOP since its inception and remains a significant problem. These are terms of art and those with background in planning understand clearly that they are separate and unique requirements. By merging these terms, DSOP is stranded in what I call a “planning no-man’s land” between high-level policy and strategy development and operational and tactical level planning.

We have a chance to refocus DSOP’s mission before it becomes ingrained and irreversible, and I recommend that we split into two distinct branches: one that focuses on strategic plans and one that focuses on operational. The strategic part should focus on high-level CT policy, strategy, and resource allocation. It should lead the interagency policy- and strategy-making efforts, including those that require White House approval.

The elements should have an enhanced and a more assertive role in resource allocation and drive the primary input to the Office of Management and Budget to — for resource CT prioritization and investments. While this mandate currently exists, DSOP’s role should be strengthened and enhanced to ensure that requirements are tied to strategic outcomes.

A second part of DSOP should focus on operational plans against terrorist groups. Such a construct provides attainable goals — defeat of a group. The functional group should be — the approach of the National Implementation Plan should be amended so that it can be executed geographically. Whether justifiable or not, the Cold War- based national security infrastructure executes geographically and not functionally.

Authorities: The IRTPA gave DSOP the authorities to conduct its specific mission. Yet no authorities were taken from any other department or agencies in support of DSOP’s creation. Not only did this create overlapping authorities, but it established no compelling reason for department or agencies to participate in the DSOP process as they could continue their counterterrorism efforts under extant powers. These overlapping areas of responsibility must be clarified. Without this, departments and agencies will continue to spend time fighting turf battles when they should be focused at the enemy at hand.

The question of authorities is raised regularly in discussions regarding DSOP. The recent Project on National Security Reform study offers a comprehensive assessment of this issue. Its comparison of authorities between the Office of Drug Control Policy, and DNI and DSOP — three similarly chartered with similar tasks, highlights the disadvantage from which DSOP operates and notes that DSOP is the only entity of the three without authority over people or money.

Many cite DSOP’s explicit prohibition from directing operations as a key reason for its struggles, while some call for empowering DSOP with additional authorities in this area. This should not be done. DSOP lacks the capability and capacity to assume such a role and would fall short of expectations. With no authority over personnel, resources or operations, DSOP has a limited ability to compel interagency participation and thus remains a relatively powerless organization. It also relegates DSOP to the inevitable role — unenviable role of leading process-orientated approaches to substantive problems. Departments and agencies that actually control operations, personnel and resources address substantive CT problems under their own authorities.

Specific to DSOP — to solve this problem, the authorities issue must be addressed across the entire government CT enterprise. Specific to DSOP, it should be given authority to influence both resources and personnel.

In the realm — in personnel, DSOP should be given the personnel to conduct its mission. The issue of personnel remains a significant factor limiting the evolution and ultimate effectiveness of DSOP. To succeed, NCTC must have the right talent. A clear mission with ample authority rings hollow if the appropriate personnel are not brought together to execute what is required.

DSOP has been hindered by the lack of planning talent since in its inception, and, unlike its analytic and knowledge management counterparts in NCTC, no standing of cadre of interagency counterterrorism planners existed from which a terrorism-specific capability could be created.

While the process of building a capacity has begun, it has been slowed by two key factors: the lack of interagency participation and high personnel turnover. First, the interagency must become fully invested in NCTC and the DSOP concepts. By being “fully invested” includes not only recognizing and embracing DSOP’s mission, but also detailing the appropriate number and type of personnel to DSOP, ensuring robust participation in the planning — (inaudible) –

The old adage that “plans are nothing and planning is everything” is only valid when those that are conducting the planning are actually involved in the execution of those plans. Since DSOP does not execute plans, it’s imperative that its efforts include robust participation by those departments and agencies.

Participation in interagency planning entities such as DSOP must be made a part of both the government’s and intelligence community’s human capital system. Personnel, particularly those with operational experience, must be rewarded through pay and promotion to incentivize and to serve as — in such entities as DSOP.

And secondly, personnel turnover at DSOP must be limited. This will include, in part, by changing perceptions regarding the value and credibility of DSOP, but we also must establish a standing career pipeline for interagency CT planners. This will incentivize talent to pursue careers in interagency.

I have submitted more comprehensive remarks for the record. And, again, I appreciate the opportunity to speak today and I look forward to your questions.

SEN. LIEBERMAN: Thanks, very much, Mr. Nelson. That was really interesting.

As I listened to the testimony, I think particularly of yours, Senator Collins probably had the same reaction — I can remember the debates — the extensive debates about the various terms that we put into the 9/11 legislation, and it’s almost as if — but not quite as neat — that we were architects or construction management operation — (laughs) — setting up best to build a building — not as neat because there were more interest at the table than the design and construction teams — (laughs) — because in some sense the people at the table wanted to preserve the existing parts of their building. But anyway, having gone through that self-analysis — (laughs) — I will thank you for your testimony.

And we’ll begin the questions with seven-minute rounds.

Mr. Powell, let me go to the first point you made, which is the importance of senior-level support — government-level support for the director of national intelligence for the position to succeed. And I think that’s a very important and strong point. That’s not the kind of thing you put in a statute or has to happen, but we’re creating something new. It has new supervisory authority — natural inclination of agencies to resist any losses in their own autonomies. So from the unique perspective you have had, would you say that the DNI has received since the creation of the office the support that it needs from the two administrations under which it has now begun to function?

MR. POWELL: Well, I — yes. Thank you for the question, Chairman Lieberman. It’s a critical question, as I mentioned in my statement.

Obviously most of my experience is — although I did serve some number of months in the current administration, obviously I can speak most directly to the former administration. And I speak in my statement — my written statement — some myths about the founding of the DNI and former President Bush’s support for the DNI.

Whatever happened in the summer of 2004 and whatever different testimony was coming from the administration, I do know where the former President Bush ultimately came down on the issue and where he came down in December of 2004. And I observed most directly in discussions, his support was strong — (inaudible) — DNI.

SEN. LIEBERMAN: And how would you describe — he supported it. Yeah. MR. POWELL: Well, a number of ways. There was discussion about whether or not the DNI needed to be in the Oval Office as part of the briefing team, and I think that there was a feeling among the senior national security team that given some questions about the matrix structure that was set up, that it was important from an intelligence perspective but it was important as a message to the administration and to the senior leaders of the intelligence community that this was the person who the president was counting on to lead an integrated intelligence community.

When you look at these initiatives — the Foreign Intelligence Surveillance Act, Executive Order 12333, the work in the cyber area and any number of initiatives — any number of those depended not just on the DNI making a decision but having the backing of the president to make that decision.

Executive Order 12333 is a bit obscure to people out in the public, but it’s the foundational executive order that was signed in 1981. It was very out-of-date. It was not applicable to the current intelligence community that we had in terms of its organization, particularly post- the Intelligence Reform Act. Why had it not been updated since 1981? Endless attempts to update it failed because of interagency disagreement. So it’s an example — and that one, the former president had to bring that to a close.

SEN. LIEBERMAN: Yeah.

MR. POWELL: There were issues that had to go to the former president and he had to rule on them. So it’s just absolutely vital. I mean, it’s vital for any department head who does have direction control and authority over everyone in their department. If they don’t have the backing of the president, they have problems succeeding. In a matrix — (inaudible) — structure like the DNI, it becomes even more critical.

My experience, although limited in the current administration — seemed to be supportive of intelligence transformation, where it was going, but again, I can really only speak until the — essentially the beginning of March 2009 from an insider perspective.

SEN. LIEBERMAN: Okay. Right. So you’re impression from outside has been that the current administration has continued that support of the DNI?

MR. POWELL: Well, I hesitate because most of my information is just based on press accounts and having been on the inside, I hate to rely on press accounts.

SEN. LIEBERMAN: Yeah.

MR. POWELL: I mean, I think it’s been challenging. The administration’s had a lot on its plate. They’ve had a lot of other very important priorities, obviously — things completely different — health care, a number of issues that are on the plate — but every president has a lot of issues at the same time on their plate.

I guess I would say that I think the Christmas Day attack has brought it into greater focus, the importance of these issues. It’s one thing to understand how important they are and to understand how the country is at threat; it’s another thing when you actually have a situation that was frankly minutes away from 300 Americans — there being 300 empty chairs at the dinner table that evening in Americans’ homes. So I think that brings a greater urgency and a focus in a way that talking about the threat simply can’t. So I think you’ve seen renewed focus on it, and it’s fortunate that that event wasn’t successful.

SEN. LIEBERMAN: Agreed.

Mr. Smith, let me ask you to pick up there and go to the most public — not necessarily the most important but the most public manifestation of this question of where — not only where the White House is in backing the DNI but how the DNI has merged with other agencies of our government. I will tell you that when we were struggling to put the DNI together in the legislative process, the greatest push and pull of the people around the table was from — frankly from people representing the Department of Defense worried about incursions that the DNI might make. In fact perhaps that has not been a problem in implementation. Some of that may be because the simple twist of fate that Bob Gates, a former leader in the intelligence community, turns out to be the Secretary of Defense and it works out better.

But there do seem — not that we were naïve about the potential for tensions within the intelligence community with a new overseer — but look, I’m speaking about the public blow-up over whether the DNI would have the authority — this was last year — to appoint senior intelligence officials in foreign countries with the CIA. And the public impression is that the DNI lost that fight. And I wanted you to — if you want to get into that fight, welcome that, but take off from it to the larger question of whether in your opinion the national leadership in both administrations has supported the DNI, and too about the extent to which there remain tensions between components of the intelligence community and the director of national intelligence.

MR. SMITH: That gets to the heart of the issue, Mr. Chairman, and I’m glad you raised it.

With respect to the particular dispute over the DNI’s authority to appoint his representative overseas –

SEN. LIEBERMAN: Right.

MR. SMITH: — I think it’s deeply unfortunate that it had to be referred to the White House. I think everybody involved now would have preferred that to have been worked out internally, but that was not the case, and I can only imagine that the people at the White House did not enjoy having to referee this dispute. And nevertheless, I think the decision by the president was to split the issue a little bit. In some respects the DNI won and in some respects the director of the Central Intelligence Agency won.

But in general my impression from talking to senior people, including people in the White House — there is no doubt that this president supports a strong DNI. They also wish to deal directly with the CIA on those matters for which the CIA is responsible, and I think that’s understandable. The CIA is the operational arm of much of the intelligence community. It conducts covert operations, which are very important to the president. It is the only agency that’s still, quote, “central” and is largely responsible for production of all- source intelligence. So what I think — we have to recognize that fact and find a way to give the DNI the authority that he or she needs to manage the community but without interfering with this relationship between the president and the CIA. And that’s why the notion of a combatant command appeals to me, because the president deals directly with General Petraeus, as he should, and yet the chairman of the joint chiefs and the secretary of Defense are very much involved in that conversation. And we’ve been able to work out those relationships in the Defense Department and we ought to be able to do it in the intelligence community.

One more thought, Mr. Chairman, on your point about the Defense agencies –

SEN. LIEBERMAN: Yeah.

MR. SMITH: It’s worked out for a variety of reasons, including the fact that we have men occupying these positions who’ve worked together in the past who have strong military backgrounds. Another element is that we’re at war. And when that happens, a lot of the issues kind of fall to one side and, within the military, we find a way to work these problems.

There’s another concern I heard expressed, which was that the role of the Defense Department and the role of the war fighters, the supporting war fighters among these defense agencies, is now so dominant that there are some, including in the military, who worry that they may have drifted a little bit from their national mission; that is to say, broader support of foreign policy, what’s happening in those areas of the world that we care about, beyond just Iraq, Afghanistan and al Qaeda.

So these are issues, again, that we need to look at and be alert to.

SEN. LIEBERMAN: That’s very helpful. Thanks. My time’s more than up, but I look forward to continuing in the next round.

Senator Collins.

SEN. COLLINS: Thank you, Mr. Chairman.

I, too, had flashbacks as I was hearing Mr. Nelson’s testimony and reading your testimony, Mr. Smith, about the abrogation word, which I so remember in December of that year calling Senator Lieberman after my chief counsel came up with the word to abrogate as being the way to stop the House Armed Services Committee from sinking the entire bill.

So a lot of the issues that you have raised have a complicated history. And without some of those awkward, admittedly awkward compromises, we never would have gotten a bill through. It was an extraordinarily difficult achievement, but an important one.

I want to talk about information sharing. Last week at our hearing, the deputy director of the NCTC surprised me, at least, by saying that there was limited ability for the intelligence community to search for information across the many data bases maintained by intelligence and law-enforcement communities. And those of us who use Google every day and put in names that weren’t spelled right and then Google tells us, “Did you mean ‘x’?” were really surprised to learn that a misspelling flummoxed the search on Abdulmutallab at one point in the information.

The deputy director, however, was very emphatic in warning us that there was no silver technological bullet. And that was at odds with a lot of presentations that our staffs have had on this issue and the work that you’ve done, Mr. Smith, on the Markle Foundation, which I think has been terrific work that you and Zoe Baird and others have done.

And he said notions of a Google-like search or a federated search are actually of relatively limited value due to legal, policy and privacy issues. And I would like to get a better understanding of what those barriers are, because it’s really troubling to me that we can’t design a system that respects privacy concerns, which I care deeply about, and yet doesn’t prevent us from accessing information.

So Mr. Smith, I’m going to start with you. And then, Mr. Powell and Mr. Nelson, I’d like to hear your views as well.

MR. SMITH: Senator, you put your finger on a really critical issue. And we were a little surprised to hear Mr. Travers’s testimony, and so actually Mr. Powell and I met with him on Monday afternoon to talk about this in a little bit of detail, and we’ve talked about it within the Markle task force, because we too wanted to drill down and understand what he said.

Some of it, I think, may touch on some classified information and some classified systems, so I want to be a little bit careful here. But clearly, with respect to getting access to data bases outside of the intelligence community and some of the other departments, some of these lists and so on, he has felt that he has not been able to reach into data bases, particularly in the Department of Homeland Security and other places, where he would like to be able to have his analysts reach in.

In the Markle task force, we think that there is technology that would permit that and protect privacy. So we intend to spend a little bit more time on this. Mr. Travers has been extraordinarily generous with his time with us. And we’re going to get some of our technical people as well involved to see if we can’t craft a solution that can get at this, because, as a matter of principle and policy, we believe that privacy can indeed be enhanced by these technologies because of things like — (inaudible) — and authorized use. And we think this is an important issue, and we’re going to continue to work on it. We look forward to working with this committee.

SEN. COLLINS: Thank you.

Mr. Powell. MR. POWELL: It’s an absolutely critical question, Senator Collins. Let me discuss it from the perspective of trying to lay out a little bit of the issues that are faced by NCTC and faced by us in the DNI’s office in trying to obtain data sets for NCTC.

As I talk about in my statement, NCTC, since its stand-up, we’ve put over 30 different networks — military, law enforcement and other types of networks — into NCTC with data sets that exceed that number being accessible to NCTC.

I think the committee would want to think about examining a couple of different areas. First, you’d want to look at the memorandum of agreement between the attorney general and the Director of National Intelligence on the search, use, retention and dissemination of data sets containing terrorism with non-terrorism and terrorism information or information exclusively pertaining to domestic terrorism.

Now, that’s a mouthful. And what does it mean in practice? Those guidelines lay out three primary areas in which NCTC can get access to data sets that contain non-terrorism information. Let me be very specific about examples of what I’m talking about. Here I’m talking about data that may be obtained by DHS or other agencies that is not acquired from people who are known or suspected or even that there’s any reasonable suspicion of terrorism activity. And so basically you’re talking about information from Americans and non- Americans that are obtained for travel or other reasons. They’re not obtained if these people have any suspicion about them.

That agreement is going to set out there ways that NCTC can access data: One, account-based access, so think of that as you go to a terminal, log in, do your search, log off, and then go back to your terminal.

Two, search and retention. And what I mean by that is I give a search to the data-set owner, so think of it as a hypothetical DHS. They do the search in a batch or some other thing, and then they give me the results.

Finally, the third area, and that’s called data-set replication. And what we are talking about there is actually ingesting the data into NCTC. That is perhaps the most effective way which allows that Google search capability.

What you will find in those guidelines is you will only allow to do data-set replication of, for some reason, account-based access or the search-and-retention areas do not work.

So what does that mean in practice? I guess the best way to describe it is when you do a Google search on your computer, it goes out and searches the Internet and returns you results from the Internet. Depending on your settings, it probably does not search committee data bases or Senate data bases that are internal to the Senate, nor does it search your individual office’s data bases. So you kind of — Google itself is not a true federated search that searches all of the IT systems that you’re connected to. So there — is my experience, Google-like search capability at NCTC, the problem is the number of data sets that it’s allowed to touch. So we’ve got this memorandum of agreement that lays out for 4th Amendment and privacy concerns this different criteria of access.

Two other areas that are absolutely critical in thinking about this. This data was obtained under specific agreements and arrangements. Each one of those pieces — each one of those data bases need to be taken on their own terms. And there may be restrictions associated with us that were the only reason we’re able to get that data. So, a little bit like the reform legislation, compromise is entailed.

There’s been a lot of public discussion about European PNR data and what the arrangements are at the diplomatic level between the United States and Europe. And there were agreements made, and those agreements, you know, frankly have consequences throughout the government for accessing that data. There’s been public talk in the area of financial-terrorism information and general financial information and agreements placed in those areas.

Finally, the FISA court. You cannot go out and grab unminimized FISA data. There are FISA minimization guidelines that require that that data be minimized according to FISA guidelines before it’s given to NCTC and be made available for anyone to search.

So these are kind of some of the practical things I think you’d want to look at at a baseline level when you’re looking at this. We spent a lot of time looking at the U.S. person guidelines across the agencies to see if we could make them more uniform. And it’s a slog to go through them.

SEN. COLLINS: Thank you. Mr. Nelson?

MR. NELSON: Senator Collins, thank you for that question. Information sharing, we’re never going to have perfect information- sharing, but we need to continue to do better. In my operational experience it was always a source of frustration to me the amounts of data, the number of systems and people trying to bring all of that together to sort it out was always astronomical and I felt very, very challenging.

I also still think we have a lot of efforts to make to overcome this culture of secrecy, as I call it, in the intelligence community. Certainly it’s important and it has its place, but it continues to prohibit information sharing when individuals at the same clearance level won’t share information because there’s not a need to know, which is determined by the individual who actually owns the information. So I don’t know how, you know, some assessments like that can be made.

Why the information sharing piece is even more important, and I can’t talk too much about the civil liberties part, not being a lawyer, is that the federal part of this is going to be relatively the easy part. We’re going to have to come up with ways to share information better with our allies, which is still a huge weakness. And better, to share with state and local governments, especially with all the issues such as homegrown extremism, which has been in the media recently.

And then the private sector. When 85 percent of the infrastructure is owned by the private sector, we are going to have to overcome those. So it’s going to be so critical that we accelerate the use of technology at the federal level because the problem’s only going to get worse and we have to share with other folks. Thank you.

SEN. COLLINS: Thank you.

SEN. LIEBERMAN: Senator Collins. Senator Carper, good morning. SEN. THOMAS CARPER (D-DE): Good morning. Looking at this sea of green. It’s like a puddle of green, wouldn’t you say? I don’t know, maybe some folks didn’t get the memo. But it’s nice to be with all of you on St. Patrick’s Day. To our panel, welcome. Thank you for joining us.

In my own view, the Intelligence Reform and Terrorism Prevention Act that adopted about, oh, half dozen or so years ago has done a fairly good job of streamlining the intelligence community’s command and control authorities. With this act, all of the federal government’s various intelligence entities report to the Director of National Intelligence, as you know. The organization has improved, I think. I hear there remains a serious turf battle — we talked a little bit about that here today — between the Directorate of National Intelligence and the Central Intelligence Agency. One example of that is between the CIA’s directorate of intelligence and the National Counterterrorism analysts when presenting intelligence issues to the rest of the federal government.

I would just ask if each of you would take a minute or so and just comment on this particular turf issue. Let me know if you agree with those observations and share with us any recommendations you might have for our committee how to deal with it. Mr. Nelson, Richard Nelson, also known as Ozzie Nelson, why don’t you lead off?

MR. NELSON: Okay, thank you, senator. I appreciate the question. I’m not an analyst by trade so I’ll make my comments brief. I will say that my personal assessment is the director of intelligence is one of the areas of NCTC which I think has been extraordinarily successful. I think that they have actually been producing some significant work and have made major improvements along those lines. But as far as comparing it to the agencies, I’d have to defer to my colleagues here. Thank you.

SEN. CARPER: All right, thank you. He’s passing the buck to you. What do you all have to say?

MR. SMITH: I’m a little bit like Mr. Nelson. I don’t have –

SEN. CARPER: You’re going to put a lot of pressure on Mr. Powell here. (Laughter.)

MR. SMITH: With respect to the critical question of analytical support to counterterrorism, in preparing for these hearings I talked to a lot of people and that issue did not surface, interestingly enough. It may be an issue, but it was not raised in my conversations. However, there were a lot of other concerns raised that I talked about in my prepared remarks — namely, there is a lot of tension within the intelligence community over the issue of authorities. In my judgment, senior officials spend far too much time arguing about authorities. Some of that is an inevitable result of the way the intelligence community worked in the past, compromises made in the legislation to get it adopted, and I understand the importance of that. But my suggestion has been that this is a time to take a look at those authorities. We’ve had five years of experience. We know what works, what doesn’t work. And see if we can’t adjust those and enhance the ability of the DNI to manage the intelligence community, and at the same time enhance the capacity of the individual agencies to function more effectively. So there are some problems, and I am pleased this committee is looking at them.

SEN. CARPER: Good. You didn’t answer the question I asked, but that was a pretty good answer.

MR. SMITH: Well, I beg your pardon. I’m happy to go again –

SEN. CARPER: No, that was good. Thanks. That was helpful. Mr. Powell?

MR. POWELL: Senator Carper, a critical issue which I dealt with extensively, I think it’s far better than it was. When the DNI was initially stood up there was considerable frustration on two counts, I think, at the senior levels. One, that the president himself personally remained the integrator between foreign and domestic intelligence, and I didn’t think that was a role for the president, for the foreign threats and domestic threats to be landing in the Oval Office, for everyone to have that discussion right there. I thought the president deserved better.

There were still exactly what you pointed out, difficulties in lanes of the road of different organizations producing their own version and take on urgent threats to the nation in the counterterrorism area. I believe in diverse intelligence and diverse views. I don’t believe in giving different factual scenarios to the president. I think we should be able to get our facts together.

So there was a lot of effort in lanes in the road — who produces homeland threat reports, who has the responsibility for putting out the alerts, for putting out the senior briefing, for kind of getting the global picture. We now have, of course, the three times a day, the video teleconferences, the secure video teleconferences run by NCTC. You had some initial issues between resources, between the CIA directorate of intelligence, and the NCTC need to have al Qaeda analysts and people who speak the language and can take a longer-term view of things.

There were some transfers of personnel made over some not inconsiderable public and private controversy. Admiral Redd, the director of NCTC at the time, came up with lanes in the road documents about who was going to do what. I mean, you could argue about the decisions made in those lanes in the road. I think it’s a lot better than it is. I do not hear as much today about the problems, and it may reflect that I wouldn’t because so much of it’s classified, where different agencies are duplicating the same work unnecessarily. So I think the lanes in the road are far better worked out than they once were. It may be that there’s some still duplication out there, but we spent a lot of time, a lot of meetings, a lot of debates about who exactly was producing the picture for the national security team and the Congress.

SEN. CARPER: Thank you. One more question, if I could. Thank you.

I believe each of our witnesses — I think each of you are in the private sector now, is that correct? (No audible response.) All right.

And partly as a result I think you may be better able to present a unique perspective and to speak with candor about the current administration’s counterterrorism policies. I was just wondering if each of you would take a moment. You’ve done this already in part in your testimonies but I’m going to ask you to come back to this again. I was wondering if you all could take a moment to share with us how things are changed since your federal government experience, and based upon current events such as the shooting at Ft. Hood and the attempted Christmas Day bombing last year, just briefly discuss some steps that the intelligence community ought to be doing to close the intelligence gaps we’ve been talking about over the course of the last several months.

MR. POWELL: I can go first. Thank you for the question, Senator Carper. I reflected a lot on this subject. I mentioned to Chairman Lieberman earlier that I think the attempted Christmas Day bombing of the jetliner brought the issues that I talked about in the statement and we’re talking about today a new urgency and a focus. I think for good or bad we were very seized with the issue on a daily basis, and obviously the former president, having been through 9/11, was very seized with the issue and made it an extremely high priority. We could discuss whether that was too high a priority or whether that was good or bad.

But as a result of that, the intelligence community and the DNI I’d say occupied a very central place at the table, and these issues were very central on the administration’s agenda. Obviously this administration, President Obama has talked about how critical it is, how important it is, but there’s a lot going on and some of these issues take time and you need to work through them.

So I think that the — what I’ve observed, at least through the press and talking with people, is a new urgency and focus as a result of the Christmas Day bombing, really bringing home when you’re discussing whether or not NCTC can give access to a database, when you need the attorney general to change some guidelines to enable an intelligence operation or to enable some information-sharing to happen.

It is far less academic I think, post-Christmas Day bombing than perhaps I noticed before.

There are some issues that I’d probably differ with some decisions that were made that I think have perhaps caused some difficulty for the intelligence community. They were made for global and diplomatic and reasons that I think the president and the administration felt very strongly about — I think they’ve had impacts on the intelligence community and that’s just a byproduct of those decisions. They may have been the right ones overall for the country but they have had some negative impacts on the intelligence community.

SEN. CARPER: Okay.

My time has expired. Mr Chairman, should I yield back? I don’t want to –

SEN. LIEBERMAN: I think you have no time to yield, my friend. I think you’re so far over your allotment. (Laughter.)

SEN. CARPER: That’s fair enough.

Mr. Smith, Mr. Nelson, thank you for your testimony today.

MR. LIEBERMAN: Thank you, Senator Carper. Good –

SEN. CARPER: I’ll come back another day for that question.

SEN. LIEBERMAN: Mr. Smith, I want to go to — you said some things at the outset of your opening statement which are really important, which is the general statement that the DNI statute in your opinion is not working as well as it should. And that’s disturbing, was the word you used, and I agree. And the general statement you made was that the office of the director of national intelligence has broad authority — broad responsibility but not clear authority. And you called on us then to strengthen the statute. And I know you’ve invited the process, either within this committee or the Foreign Intelligence Advisory Board or perhaps some outside group, but — talk a bit if you can about where you would begin to strengthen the authority of the DNI.

MR. SMITH: I think it’s largely on the management side, Mr. Chairman. The two or three areas that I looked at in preparing for this were, one, information sharing, and we’ve talked about that. And I think there do need — there does need to be some strengthening of authorities and/or clarification of those authorities, particularly with respect to privacy.

A second area is the acquisition area. There is confusion over some areas, particularly on independent cost estimates — who is responsible for them and so on. Now, some of that’s in the legislation, but what I’ve discovered is there’s still some confusion and, “Is it yours; is it mine; who’s responsible?”

A related area is reprogramming. Again, there’s some uncertainty there. The House and Senate intelligence Authorizations bills have, as I understand it, some language to try to clarify that, but that’s an indication. And when I talk to the staffs of the various agencies, they would tell me, “Well, you know, there’s a big fight going on right now” about some issue or another, most of which could be traced to some uncertainty in this — in these authorities. Now, these are men and women of good will. They really want to do the right job. We should all be proud of how hard they’re working and how dedicated they are to doing it.

SEN. LIEBERMAN: Agreed.

MR. SMITH: But the flip side of that is, they’re very proud of what their responsibilities are and their organization, and they tend to think, “It’s my responsibility; let me do it.”

So as a general matter, I think there are maybe half a dozen or so areas where I would begin to concentrate.

SEN. LIEBERMAN: Would you add to the budget authority?

MR. SMITH: I would. Yes. I’m sorry. I think that serious consideration should be given to further separating the national intelligence program, and that includes some budgetary authority.

Now, the DNI does have — and Mr. Powell is better able to speak to this than I am — some budgetary authority over the allocation of budget.

SEN. LIEBERMAN: Right.

MR. SMITH: And it goes to Senator Collins’s point earlier about has that been used and the risk of having authority that you either don’t use or try to use and then get that taken away from you through some other process.

In my conversations it’s gotten better over the last two of three years; that’s in part because of personalities and in part because of some leadership from the White House and DOD that says, “Look, we don’t — we should not be having these fights.” But the statutory language remains, and as long as that — some of that uncertainty is there, another set of leaders might not be quite so accommodating — both, by the way, in the previous administration and this administration. I think there’s been a lot of progress.

So I would like to have a situation that is less personality- dependent and where the authorities line up a little big more with the authorities line up a little bit more with the responsibilities.

SEN. LIEBERMAN: Let me ask you — continuing in this focus on a particular idea you raised in your testimony, which is to separate the DNI as the manager of the intelligence community from the role that was also given to the DNI under this statute, which is as essentially the chief adviser on intelligence to the president and therefore responsible for the daily briefing to the president. I mean, I — the argument then to a certain extent, repeated by Mr. Powell this morning in terms of judgments that were made early on by President Bush, is that unless the DNI is in there every morning with the president, that he doesn’t have the stature. I’m not clear that — so weigh the balances here and why you think it’s still a better idea to separate those two functions.

MR. SMITH: This is not to say, Mr. Chairman, that the DNI should not be in the room with the president during the briefing, perhaps not every day but certainly be there.

SEN. LIEBERMAN: Right.

MR. SMITH: The question is whether or not the DNI has the responsibility not simply to be there but the person who is actually directly and personally responsible for preparing it, giving it, following it up, and so on.

And I do not know how it is presently working — let me be very clear about that — but the concern I’ve heard expressed is that different DNIs have done it differently; different presidents want it done differently. But the fact of the matter is that the responsibility of personally briefing the president — and, as you know, the PDB is also seen by other senior cabinet officers — that responsibility is so huge and the follow-up to those discussions is so huge and the participation in the policy-level discussions about what to do is so huge that no single individual can do that and effectively manage the community. And that’s why what sort of appealed to me was beginning to think of it a little bit as we had done in Goldwater- Nichols, which was to separate the operational responsibilities to actually do the warfighting in the field from the responsibility to train, equip and maintain the forces that are then assigned to the combatant commanders in the field. It is by no means a perfect analogy and I’m not sure it lends itself necessarily to statute, but nevertheless one hears that perhaps DNIs — and this may be as a result of the way the president wants to do it — but if that’s going to take the majority of their time, it’s a hugely important responsibility, but that means that necessarily there is less time to devote to management. So that is an area where I think people need to give some serious thought as to what that balance is, what the authority should be and what the law should be. SEN. LIEBERMAN: I understand — (inaudible) — I think the Goldwater-Nichols analogy is a helpful one and one that we’ll think about.

So as you’ve thought about this question — I understand what you’re saying. The responsibility for the daily briefing of the president is a big one, and I presume takes the time of the DNI to get ready and the follow-up. But if the DNI did not do it, who would do it, in the best of all worlds as you see it?

MR. SMITH: In the past the practice had been that there was a senior — this was before the DNI was created.

SEN. LIEBERMAN: Yeah.

MR. SMITH: There was a very senior intelligence officer from the CIA –

SEN. LIEBERMAN: But not the director.

MR. SMITH: Not the director. Now, the director would occasionally go, but it was sort of on occasion just to sort of be there or when a particular subject would come up. But there was a whole PDB staff, there was a whole bureaucracy that had grown up. When I was at the agency there were meetings where we would decide what went in the PDB. Different agencies would make presentations.

SEN. LIEBERMAN: And the DCI would have some part in that, I assume.

MR. SMITH: Very little.

SEN. LIEBERMAN: Very little.

MR. SMITH: It was the senior analysts that did it. There is — have even heard some concern expressed — Mr. Chairman, I have no personal knowledge of this, but there is some concern that as you try to bring more agencies into the production of the PDB it begins to look a little bit — the advice the president is getting begins to look a little bit like the advice that the president got prior to Goldwater-Nichols from the joint staff, which was the least common denominator –

SEN. LIEBERMAN: Gotcha.

MR. SMITH: — where it’s a committee product –

SEN. LIEBERMAN: Right.

MR. SMITH: — which is another reason I’m attracted to the idea of having the CIA and/or the NIC — the National Intelligence Council — be the combatant command with a very direct responsibility to the president, like General Petraeus, to do that mission. SEN. LIEBERMAN: Right.

MR. SMITH: And they’re ultimately in charge of deciding that.

Now, the DNI has to make sure that ultimately he or she has a voice in that. But it’s a huge responsibility. And I understand DNIs are too frequently drawn into that.

SEN. LIEBERMAN: So I’m going to wind this up, but just by saying it sounds to me that what you might prefer here is that some senior staff — some senior person under the DNI –

MR. SMITH: That’s correct.

SEN. LIEBERMAN: — in the office of the DNI handle the presidential daily briefing.

MR. SMITH: That’s correct.

SEN. LIEBERMAN: Thanks very much.

Senator Collins.

SEN. COLLINS: Thank you.

I want to make just one comment on the information sharing before leaving that issue and before going on to another question. Mr. Powell was going through the various restrictions, some from the attorney general’s guidelines, some from MOUs that were worked out to get information, some from FISA court decisions.

So obviously this is complex. But what that tells me is some of the restrictions are the result of law. Some of them are the result of policy choices. Some of them are the result of negotiations in order to get information.

Mr. Powell, just quickly, is that generally a fair assessment?

MR. POWELL: Correct, Senator Collins.

SEN. COLLINS: So I really want to work with you after this hearing to better identify solutions. I think both the chairman and I were — at the risk of speaking for the chairman, were alarmed when we heard the testimony that we did from the NCTC deputy director, because it certainly seems to be interfering with accessing information that needs to be accessed. And I think, Mr. Smith, your point that you can design systems that actually enhance privacy while allowing this access is absolutely a critical point. I want to move on to the relationship between the DNI and the CIA. We’ve talked previously in this hearing about the friction, the White House having to get involved in resolving disputes. That really concerns me when it gets to that level. But there’s also been this — I would call it an urban myth in some ways that the Intelligence Reform Act did not define that relationship. And Mr. Smith, you referred to it in your written testimony.

And to me, it’s just so crystal clear, because, as one of the authors of the language, to me, when it says that “The director of the CIA shall report to the Director of National Intelligence regarding the activities of the CIA,” it says “shall.” It doesn’t say “may.” It says “report,” which to me clearly defines the relationship.

But I’m gathering that some people argue that that information or that interpretation is ambiguous. And Mr. Powell and Mr. Smith, I want to ask the two of you about this issue. And Mr. Powell, I’ll start with you, because I’d be interested to know in practice, when you were at the DNI, did the CIA attempt to use that language to suggest that there was ambiguity in the report — in the relationship between the director of CIA and DNI?

MR. POWELL: Senator Collins, there was discussion that there was ambiguity. I would say this. So the answer to your question is yes. There was at times discussion that somehow the statute was ambiguous.

A couple of points about that. First, I’d refer you to the confirmation hearings of Director Hayden and Director Panetta, where they do not suggest that there’s any ambiguity in the statute in the answers to the Congress.

That said, you know, the Intelligence Reform Act was a seismic shift. And still we would hear people claim that there was ambiguity there. I can say that because, as the chief legal counsel to the Director of National Intelligence, I did not see ambiguity.

I spoke to the Department of Justice as to whether they saw ambiguity to it. I never had to go to the formal step of requesting a formal opinion from the Office of Legal Counsel. I did offer that option up to individuals at the Central Intelligence Agency if they continued to find ambiguity. They decided that it was better for me — that they would rather that I did not go to the Office of Legal Counsel.

I advised them as to what the oral advice was from the Department of Justice as to what the ambiguity of the statute was and whether they would like me to pursue it on a written basis. And they said that there was no need and that we could work out the issue that we had. So that was my experience with the statute. It’s certainly consistent with what every director of the CIA has testified about the statute. That said, there is no doubt that there are cultural and organizational issues that are going to take a decade to work out to make this community jell. SEN. COLLINS: Mr. Smith.

MR. SMITH: Mr. Powell has said it well. But there have been instances of which I have heard — and I did not serve in government after the creation of the statute, so this is only things that one is told — that people at the CIA have pointed to the language and CIA’s supporters elsewhere around government have pointed to the language in the statute that says they report regarding activities at the CIA that is different from the kind of language that ordinarily appears in a statute that creates a department that says the head of the department directs and controls the particular agency.

Does that language make a difference? Not really, in strict legal terms, but it’s enough of a difference that if an agency wishes to not adhere to the directions of the director, there is something they can point to and give them an argument.

It is unseemly, in my view, to have these kinds of arguments. But again, I think the committee could benefit from some very frank discussions, not in public, with former directors, both DNI and directors of CIA, who could tell you how some of these have played out. And I encourage you to do that.

SEN. COLLINS: Thank you.

Mr. Nelson, just one quick final question for you. And unfortunately I’m going to have to leave.

I am concerned about the difficulties that you faced in the Directorate of Strategic Operational Planning. And as I said, I readily concede that those words were a compromise, that they sound contradictory.

You mentioned that counterterrorism entities that do not participate face no penalty. It would help them participate or encourage them to participate if they saw more value, and so there’s a tradeoff there.

But what do you think we should do with that responsibility?

MR. NELSON: Well, with the strategic operational planning, as I suggested, I would split it into two. On the strategic part, you have to give them control over some lever. There’s operations. There’s the resources. There’s the personnel.

On the strategic level, you give them the opportunity to drive high-level policy and you give them levers over resources. And it’s not only advising, perhaps, OMB, but perhaps it’s something like some sort of 1206 or 1207 similar type ability to actually allocate funds in support of their operational plans that the other part of the entity would drive. And that gets them — they should be the ones writing the national strategy to combat terrorism or the national strategy against al Qaeda, and the White House should serve as the approval process and kind of massaging it. But that’s where that should come from.

And then, from the operational perspective, we still in the U.S. government lack a planning effort against these groups. We have the national implementation plan, which you’re very familiar with, that has these broad, sweeping concepts, but they’re very difficult to implement in a government that executes geographically.

So we look at the homegrown extremists, for example. They were recruited by various entities — Lashkar-e-Taiba, al-Shabab, al Qaeda, and AQAP. Who in the U.S. government is saying this is the group that we need to go after first; this is the holistic approach against it? Who is assessing that we’re succeeding in what’s working and what’s not working?

And then who’s moving funds around once certain checkpoints have been reached, saying, “Okay, now that we’ve neutralized this group or this threat, we need to move to the next group”? That’s not happening, primarily due to interagency infighting, and again, questions about authorities. Those overseas will say that, you know, in the embassy teams, that they have the priority over there, and folks back in D.C. really don’t.

SEN. COLLINS: Thank you. That’s very helpful.

Thank you, Mr. Chairman.

SEN. LIEBERMAN: Thanks, Senator Collins. I know you have another commitment you have to go on to. I appreciate your presence here.

And I’m going to hold the witnesses a while longer for questioning — promising, the best I can, not to violate in any way the Geneva Convention. I’ll try not to torture you.

I want to pick up with Senator Collins’ questioning of you, Mr. Nelson, because the picture that you painted of NCTC’s authorities and capabilities in this area of strategic operational planning is troubling.

But it’s important — very important for us to hear.

You had an interesting sentence, I want to look for it — oh. NCTC, quote, “is stranded in a planning no-man’s land between high- level policy and strategic development and operational and tactical planning.” End of your quote.

So as I guess — as Senator Collins has suggested or said — we identified that there was in fact a no-man’s land as we were trying — doing the legislative reform. And that it was one that the government needed to inhabit in some way. That there was not sufficient connectivity between the strategic level planning and the tactical and operational planning. And that’s why we created what we did.

So I wanted to ask you a couple of questions about that. And you know, at that time — because we were still so close, really, to 9/11 — we kept coming back to this question of who’s in charge of the hunt for bin Laden. I know that’s not typical, and yet it’s instructive in some way, because we saw a lot of different activities going on, not a plan.

So I want to ask you, from your experience — and you’ve had widespread experience at the National Security Council, the NCTC and the Joint Special Operations Command — would you say, let’s take bin Laden, but who is in charge of the search?

MR. NELSON: Oh, I think that’s a great question.

And again, taking it back to more theoretical and not commenting on the, obviously, the operational aspects –

SEN. LIEBERMAN: Yeah. Go ahead.

MR. NELSON: More generally speaking, this is a problem that continues to plague the government in the counterterrorism community is that there is these — there is no one who’s actually leading these efforts and who’s prioritizing these efforts.

And I use the example, you know, UBL you can talk about today, but let’s talk about the next al Qaeda.

SEN. LIEBERMAN: Yeah.

MR. NELSON: What are the entities that are going to do that? That’s not being done. If it’s a threat that emanates from a particular country, say for AQAP, it will be the embassy there that say they’re responsible for it. If it’s happening under Title 10 authorities in Iraq or Afghanistan, DOD would claim that they have authority.

I would just reference the SOCOM — Special Operations Command example — where they were given the authority to the supportive commander against the war on the terrorism, how much difficulty they had in trying to get the combatant commander — the geographic ones — to actually coordinate with them.

So this remains a significant problem. And I think that until we get some sort of planning process in place that’s attached to the execution of those plans and the assessment of those plans and then funds are moved around so that you can determine who well you’re doing against these groups and these individuals, we’re going to continue to struggle.

SEN. LIEBERMAN: Okay, so — but as I’ve heard you, you recommend splitting strategic from operational and having NCTC do both kinds of planning separately. Is that correct?

MR. NELSON: Well, that’s right. When we tried to implement the legislation, we got beat back from the inner agency on multiple occasions. Every time we trended towards the operational there was resistance; every time we trended towards the strategic, there was resistance.

SEN. LIEBERMAN: From the CIA or from –

MR. NELSON: A multitude of organization — State Department, CIA, even at times the Department of Defense.

SEN. LIEBERMAN: Because your statutory authority was not clear enough?

MR. NELSON: Not clear, because what is a strategic operational plan? And because of that ambiguity, they were — it gave them the tool to minimize or marginalize what SOP’s effect could be and what they actually operated.

If you started doing an operational plan, they would say that’s too operational; that’s too tactical. You’re supposed to be focused more on the strategic. If we trended towards the strategic, they would say no, you should be more focused on the operational.

So simply adding a conjunction in there clears up a multitude of issues.

SEN. LIEBERMAN: So at one point you indicated — you recommend that NCTC have some authority to control and allocate funds to the departments. Is that one way to establish its primacy here? MR. NELSON: We do. We have to give them some sort of lever to compel the agency to participate. And if we’re not going to give them operational authority, then we need other areas we can look at our resources and personnel. And giving them some input — direct input over resources hopefully would encourage interagency participation in these plans.

SEN. LIEBERMAN: Let me give you an example which is, obviously, not so far from reality — leaving aside bin Laden.

In Somalia there’s a — there’s an American who has become a radical Islamic cleric and he runs websites which are in English. And he’s communicating a lot with people in America and people in America are communicating with him. He’s helping to radicalize them. Sometimes he brings them over; they come to see him. He’s become dangerous to the U.S. and in fact, has been implicated in some terrorist attacks in our country.

So let’s just sort of clear the deck of what exists now. It would certainly seem to me that it would be in the interests of our government to have a plan to capture or kill that person. So how would you organize that, if you were redrawing the structure now?

MR. NELSON: I think NCTC has the authority to do this under the current structure. I just think they’re having a difficult time getting (areas ?) to participate.

SEN. LIEBERMAN: Obviously, NCTC doesn’t have the resources itself to carry out an operation.

MR. NELSON: Absolutely. They have no authority. Absolutely.

And as I said, if you — you know, planning is everything, but the planners have to be the ones that are executing.

And you know, in NCTC — this is a role I think also is underutilized is that of arbiter. You know, we have these discussions on any of these issues about whether, you know, for example, the website issue. Should you take the websites down, should you keep the websites up. How does that work?

Some of those decisions go to the very highest levels of government. And as my colleagues mentioned, those that shouldn’t — somebody should be arbitrating those decisions at a much lower level and that’s a role that NCTC could take — undertake, but it can’t do, because it doesn’t have the credibility and the authority currently to do that.

SEN. LIEBERMAN: Let me ask, Mr. Smith and Mr. Powell, if you have an opinion on this question about — how to — there’s a problem, which is how do we coordinate the various branches of our government in planning and carrying out coordinated operations? MR. SMITH: Mr. Chairman, that’s one of the reasons I’m attracted to the Goldwater-Nichols model.

And in Goldwater-Nichols, a combatant command is given the responsibility for a geographic area to go do something — to carry out a mission. The only that doesn’t have that is SOCOM, which has a global mission.

And by the way, we just saw in Afghanistan, General McChrystal decide that he needed greater authority over forces under SOCOM for the very reasons that we’re talking about, which is you don’t want — one of the first things you learn in military life is unity of command. And that has to be and it seems to me it has to be here as well.

I’m not remotely able to talk with the kind of expertise that Ozzie with respect to planning. However, instinctively, I would think that a mission such as the one you described should be given to an operating entity. And that operating entity should have the responsibility to develop the plan and then run it by NCTC much as a combatant command consults with the Joint Staff about any plans they develop.

SEN. LIEBERMAN: So how do we do that? In this case, let’s take the radical cleric that I described and I put him in Somalia for the sake of it being hypothetical.

Who would be the combatant commander?

MR. SMITH: I think — in my view, it should be AFRICOM.

SEN. LIEBERMAN: AFRICOM. Fascinating. So you go to the military command and then have that person coordinate with all the resources — intelligence, State Department, all the rest?

MR. SMITH: That’s correct. Because I think at the moment, the Defense Department has the greatest reach, the greatest capacity.

SEN. LIEBERMAN: Right.

MR. SMITH: But they can’t — they can’t over militarize it. If I could use that expression.

SEN. LIEBERMAN: Yeah.

MR. SMITH: And that’s where the role of the NCTC has to come in — much as the role of the Joint Staff has to come in to say, you’re plan doesn’t take adequate account of this or that. And that then has to represent other — and the advantage of NCTC stepping is they represent, and there are representatives on there, of other departments and agencies of government that would bring a perspective to it, that would bring information to it to refine that plan, but that it would ultimately have to be executed by AFRICOM. SEN. LIEBERMAN: Mr. Powell — that was very interesting. Your reaction?

MR. POWELL: I think that on the specific operational tasking and coordination of them, there are operational de-confliction agreements in place between agencies that I think work fairly well in the field.

It may just reflect a lack of knowledge on my part, but I did not see in the field — I saw the agencies working together. The closer you are to the mission, the more these kinds — some of these debates go away.

I would be very concerned and want to think heavily about bringing a tactical, operational type of planning function away from those agreements, that I frankly think, in my experience, have worked well in specific operational tasks of the kind of hypothetical that you’re talking about, Mr. Chairman.

I think the NCTC have a lot of value to add on the broader issue of not just a operation about a specific person or more at the tactical level, but more what are we doing as a government to counter the fact that there are people here in America who are going to visit this cleric in your hypothetical and becoming radicalized or becoming self-radicalized or accessing websites.

And of course these are by far what we’ve seen recently. Some of the most dangerous threats and the most hardest to detect are people self-radicalized, not necessarily connected to A.Q. central, AQAP, some of the other organizations we can talk about, and obviously the attention that those organizations draw from the United States government.

But there’s a large value in thinking about it at the level that NCTC can about what do we do about that phenomenon and problem. Obviously there’s been talk about problems in prisons. Here in the United States, we can talk about any number of these things.

I think at the tactical hunt level, you know, obviously Mr. Nelson has far more experience in this than I do, but just going back to my military experience and other ways — and I certainly was very concerned from the Director of National Intelligence standpoint, any time that we seem to veer into tactical operational issues or having to become involved with them. I didn’t think that we had the rules, the guidelines, the capabilities present to get involved. Now, some major national issues at times may draw in some of the senior staff, but that was very unusual and rare.

SEN. LIEBERMAN: Okay, it’s a very helpful answer. Let me ask you just one or two more questions. I’ll start, Mr. Smith, in you testimony, your prepared testimony, you discussed complaints by officials in various agencies that the DNI staff often acts as micromanagers and the issues — time-consuming requests and data calls to agencies for information that for reasons that are often not very well understood. You also note that this information-request process quite often appears to be driven by contractors at the DNI. So I wanted to ask you — well, first I’ll ask you, Mr. Smith, because you say that from your perspective, the director, the current director, Admiral Blair, is not interested in micromanaging intelligence agencies. I wonder if you’d speak a little about that and whether you know whether he’s taken steps to address the issue you raise what you might call over-tasking.

MR. SMITH: The answer is I believe yes to all of your questions, Mr. Chairman. The director, Director Blair, does not intend to micromanage. He understands he cannot do that. On the other hand, he has a great many responsibilities under the statute. And he has inherited the structure where there are already a lot of contractors in place.

I have not — and I cannot begin to speak for him, but he is aware of this issue. There are ways that one could try to get a handle on the tasking the ONI, ODNI does so that it is coordinated and so that only tasks are issued that senior leadership truly believes are necessary. I can’t speak because I simply don’t know what the director might be doing to address that issue, but I know he’s — I do know he knows it is an issue.

SEN. LIEBERMAN: Mr. Powell, was this problem, to the best of your recollection when you were at the ODNI?

MR. POWELL: It was continually at the front of issues that were raised with former Director Negroponte, former Director McConnell and now Director Blair. It was an issue of continual discussion every week about the issue of tasking, about the complaints we would read in the newspaper, about this, about issues we would hear in the Congress about these issues.

My first response to those would often be, please give me the specific example that you are speaking about. I often had a very difficult time of finding what the specific example was. Second, the issue was, if we do — if the DNI’s office sends out something that is inappropriate, you should call the deputy Director of National Intelligence, one of them, and tell them that something inappropriate is going on and it needs to be put to a stop.

SEN. LIEBERMAN: I’m sorry. Do you think it was real or do you think this was just bristling by the agencies that were getting used to dealing with the new office of the ODNI?

MR. POWELL: There are no doubt that there were I’m sure requests that were sent out that I did not think were appropriate to be sent out. That said, for the first time we did a contractor inventory of the entire intelligence community and tell you what the functions of these contractors are doing. The Congress found that very interesting. The intelligence community found that very interesting from a budget perspective.

SEN. LIEBERMAN: Too many? MR. POWELL: To do that — I’ll just say that we did the contractor inventory, Senator Lieberman, by the function that I think — I don’t want to make any broad generalizations about it, but it gave you an idea of you could then look to see by function what are people doing in the community, and that gave you data points then to make budget decisions. That, in my experience, is the very first time you got a picture of what the workforce looked like — who speaks what languages across the intelligence community. So all of these things did require data calls.

The law and joint duty is a perfect example. There are a number of things in there by law about promotion rates that people who participate in joint duty cannot be promoted at a rate lesser than their peers who do not participate in joint duty. So it’s a fine balance. I am sure that there are examples where the DNI’s office over-tasked or did something that they should not have. There were rules put in place. At one point I think we — any data requests of this type had to go through a three-star general on the DNI staff to do this.

So this was not something that did not have the director’s attention. I think if you look at the office of the secretary of Defense, the secretary of State’s office, the attorney general’s office, I suspect at times they send out tasking requests that perhaps are not needed.

SEN. LIEBERMAN: (Chuckles.) I’m sure that’s right.

Let me ask you a final question. When Governor Cane and Congressman Hamilton testified before us in late January, they raised the idea, kind of floated of whether the DNI should have a fixed term of service, similar to that of the FBI director, on the theory that that would improve continuity, and to a certain extent, remove the DNI, to whatever extent he’s involved in the political process now, from that process or at least from the transitional government. I’m interested in just getting a quick reaction from the three of you. Mr. Smith?

MR. SMITH: It’s a good idea, very worthy of consideration. I think it’s worked with the director of the FBI and I think it’s a good idea. Some of the downsides: It’s hard to find somebody willing to commit to an extended period. You want somebody who is close to the president, who can pick up the phone and say, Mr. President, you’ve got a problem here and not be intimidated because he or she doesn’t have a relationship with the president.

So it’s a serious question that should be examined. I’m a little like the — if I were to vote today, I’m a little like the Supreme Court; I’m kind of five-to-four against it, but it’s — I could be persuaded.

SEN. LIEBERMAN: Mr. Nelson, how does your Supreme Court rule? MR. NELSON: (Chuckles.) I actually think it’s a very intriguing decision. I would be in support of it. To finish the kind of change that you put forward in the legislation, the ROTBA (ph), it’s going to cause some china to be broken, and that individual needs some political top cover to make that happen.

I was very disturbed and upset — disappointed that the decision was made regarding the appointment of those DNI officials overseas. I think that was the wrong call. I think something like this would have been able to address that.

SEN. LIEBERMAN: Mr. Powell?

MR. POWELL: I’m probably seven-two or eight-one against it. (Laughter.) I should note I clerked for a justice who was often on that one side. So –

SEN. LIEBERMAN: The only time I got to argue a case before the Supreme Court when I was attorney general of Connecticut, we lost eight-to-one, so I’m sympathetic to that justice. (Laughter.)

MR. POWELL: So I think the director of the FBI is a very special case. There’s a history there. There’s a history behind that. The FBI director has access to information n the law-enforcement side in terms of investigating senior officials of the government and other things that are very distinct from the DNI.

My concerns would be, number one, you do have a statute that does require the president’s backing. I would be very concerned if you had, for whatever reason, a place where the DNI was kept out of the national security circle, and seen as part of, you know — really a part from it. I think the information is so critical, the operational issues, the issues we’re dealing with on intelligence, whether it’s Iran, North Korea, Afghanistan, Iraq, cyber, threats coming over the horizon, issues in Africa, all of those things.

I worry about having a lengthy term could really impact that and have a problem. I think it would raise the bar to the extent that you had somebody who was not performing up to the — perhaps the full capabilities that they needed to be. It’d be a very, very difficult thing to remove them. It would then be seen as a very political move. There would be all kinds of allegation.

So I’m — I would be very concerned about any type of lengthy term for a DNI. In my experience, you know, having served as three directors of national — (inaudible) — I’ve just not seen that this evidence of politicization or changing the intelligence or trying to rework it — I think frankly, given the diversity of who produces that intelligence, that’s a very difficult thing to do with the National Intelligence Board and the other analysts who are involved in the process. SEN. LIEBERMAN: Thank you. Thoughtful responses. Thanks very much for your testimony. This has been very, very helpful.

Do you want to add something?

MR. SMITH: Just as a matter of personal privilege, Mr. Chairman, at the outset of his remarks, Mr. Powell said some extraordinarily kind things about me. I’m not sure they were justified.

SEN. LIEBERMAN: Do you want to deny them?

MR. SMITH: I would like to correct them for the record, but I do appreciate them greatly, especially coming from Ben, who’s had himself, an extraordinary career of contributions to this country.

SEN. LIEBERMAN: Well, that’s nice of you to say, very gracious. And really it could be said of all three of you. I appreciate it very much.

You’ve been very helpful today. Senator Collins and I are quite serious about this review, and we’re not intent on legislating unless there’s a reason to legislate, but if there is, we’re not going to hesitate if we think it can improve and strengthen what was begun with the 2004 act.

So I’m going to ask that — I appreciate also that the three of you did some work in preparing for this testimony today, which matters a lot to us, and obviously the full text of your statements will be entered into the record, but Senator Collins and I and our staffs really would like to continue to be in touch with you as we go forward with this oversight. We’re now going to talk to some of the people who are at the agencies now, and probably best start that in closed sessions so that we can get maximum information.

But I’m going to leave the record of this hearing open for an additional 15 days for any statements or questions that others may have. And with that, I thank you for your continuing service to our country.

MR. : Thank you.

SEN. LIEBERMAN: The hearing is adjourned. (Sounds gavel.)

END.

More on the hearing here