Return to Transcripts main page

CNN Live Event/Special

9/11 Commission Hearings Resume

Aired April 14, 2004 - 09:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


BILL HEMMER, CNN ANCHOR: George Tenet is in the room here. We have heard him testify under numerous occasions over the past several months. But clearly, this is an opportunity for him to explain what was happening in the days and years prior to 9/11 and how since that time he recommends going forward.
There is George Tenet and now Governor Kean, the commissioner of the 9/11 committee.

THOMAS H. KEAN, COMMISSION CHAIRMAN: Our first witness today is the Honorable George J. Tenet, director of the Central Intelligence Agency. And I notice he's accompanied by the distinguished deputy director, Mr. John McLaughlin.

KEAN: This is Director Tenet's second appearance before us in open public session, and we are very pleased with his help, and pleased again to welcome him.

Director Tenet, will you please rise and raise your right hand?

Mr. McLaughlin also, I guess, if you're going to join him.

Do you swear or affirm to tell the truth, the whole truth and nothing but the truth?

Thank you very much. Please be seated.

Director Tenet, if you'd like to proceed with your opening remarks.

GEORGE J. TENET, DIRECTOR, CIA: Thank you, Mr. Chairman. I welcome the opportunity to be here again.

On March the 24th, I expressed my personal feelings for the loss I felt for the families who lost loved ones. My colleagues at CIA and throughout our intelligence community feel the same sense of loss. That we did not stop these attacks haunts all of us to this day.

And what we're doing here is essential, not only because we have to be open and honest about the past, but also because we have to be clear-minded about the future.

Mr. Chairman, some context. By the mid 1990s, the intelligence community was operating with a significant erosion in resources and people and was unable to keep pace with technological change. When I became DCI, I found a community in the CIA whose dollars were declining and whose expertise was ebbing. We lost close to 25 percent of our people and billions of dollars in capital investment.

The pace of technological change challenged the National Security Agency's ability to keep up with the increasing volume and velocity of modern communications. The infrastructure to recruit, train and sustain officers for our clandestine services, the nation's human intelligence capability, was in disarray.

We were not hiring new analysts, emphasizing the importance of expertise, or giving the analysts the tools they needed. I also found that the threats to the nation had not declined or even stabilized, but had grown more complex and dangerous.

The rebuilding of the intelligence community across the board became my highest priority. We had to invest in the transformation of the National Security Agency to attack modern communications. We had to invest in a future imagery architecture. We had to overhaul our recruitment, training and deployment strategy to rebuild our human intelligence critical to penetrating terrorist cells. And we had to invest in our people.

And while we were rebuilding across the board, we ensured that investments in counterterrorism continued to grow while other priorities either stayed flat or were reduced.

Mr. Chairman, I'm not going to go through what the rest of the world looked like. You understand it.

TENET: Building our overall capabilities would be instrumental in how we positioned ourselves against al Qaeda, its terrorist organizations that represented a worldwide network in 68 countries and operated out of a sanctuary in Afghanistan.

We also needed an integrated operations and collection plan against al Qaeda. We had one.

I have previously testified about the 1999 strategy that we called the plan. The plan required that collection disciplines be integrated to support worldwide collection and disruption and penetration operations inside Afghanistan and other terrorist sanctuaries.

In 1998, after the East Africa bombings, I directed the assistant director of central intelligence for collection to ensure that all elements of intelligence in the community had the right assets focused on the right problem with respect to al Qaeda and bin Laden.

We convened frequent meetings with the most senior collection specialists in the community to develop a comprehensive approach to support the Counterterrorism Center's operations against bin Laden. He told me that, despite progress, we needed a sustained, longer-term effort if the community was to penetrate deeply into the Afghan sanctuary.

We established an integrated community collection cell focused on tracking al Qaeda leaders, identifying their facilities and activities in Afghanistan. The cell, which often met daily, included analysts, operations officers, imagery officers and officers from the National Security Agency. We used these sessions to drive signals and imagery collection against al Qaeda and to build innovative capabilities to target bin Laden and the al Qaeda organization.

We moved to satellite to increase our coverage of Afghanistan. CIA and NSA designed and employed a clandestine collection system inside Afghanistan. The imagery agency intensified its efforts across Afghanistan and more imagery analysts were moved to cover al Qaeda.

The imagery agency gave al Qaeda interest in targets its highest priority in the intense daily competition for overhead imagery resources.

We established an integrated community collection cell that focused on tracking al Qaeda leaders and identifying and characterizing their facilities.

When the Predator began flying in the summer of 2000, we opened it in a fused, all-source environment within the Counterterrorism Center.

TENET: All of this collection recognizes the primacy of human and technical penetration of the al Qaeda leadership and network and the necessity to get inside the sanctuary in Afghanistan. This integration was the context of the plan that we put into place in 1999.

Between 1999 and 2001, our human agent base against the terrorist target grew by over 50 percent. We ran over 70 sources and sub- sources, 25 of whom operated inside of Afghanistan.

We received information from eight separate Afghan tribal networks. We forged strategic relationships consistent with our plan with liaison services that, because of their regional access and profile, could enhance our reach. They ran their own agents into Afghanistan around the world in response to our tasking.

The period of early September 2000 to 2001 was also characterized by an important increase in our unilateral capability. Almost half of these assets and programs in place in Afghanistan were developed in the preceding 18 months.

By September 11th, a map would show that these collection programs and human networks were operating throughout Afghanistan. This array meant that when the military campaigned to topple the Taliban and destroy al Qaeda began in October, we were already on the ground supporting it with a substantial body of data and a large stable of assets.

Mr. Chairman, I've outlined in my statement our analytical product. I don't mean to short shrift it, but I know you want me to stay within 10 minutes. I think that there was depth and clarity across a range of products and a range of venues. I believe that that product got to our policy-makers, including the most senior policy- makers, in many forms. How do I assess our performance? The intelligence that we provided our senior policy-makers about the threat al Qaeda posed, its leadership and its operational span across over 60 countries and the use of Afghanistan as a sanctuary was clear and direct.

TENET: The warning was well understood, even if the timing and method of attacks were not.

The intelligence community had the right strategy and was making the right investments to position itself for the future against al Qaeda. We made good progress across intelligence disciplines. Disruptions, renditions and sensitive collection activities no doubt saved lives. However, we never penetrated the 9/11 plot overseas.

While we positioned ourselves very well with extensive human and technical penetrations to facilitate the take-down of the Afghan sanctuary, we did not discern the specific nature of the plot.

We made mistakes. Our failure to watchlist Hazmi and Mihdhar in a timely manner or the FBI's inability to find them in the narrow window at the time afforded them showed systemic weaknesses and the lack of redundancy.

There were at least four separate terrorist identity databases at the State, CIA, the Department of Defense and the FBI. None were interoperable or broadly accessible. There were dozens of watch lists, many haphazardly maintained. There were legal impediments to cooperation across the continuum of criminal intelligence operations. It was not a secret at all that we understood it, but in truth, all of us took little action to create a common arena of criminal and intelligence data that we could all access.

Most profoundly, we lacked a government-wide capability to integrate foreign and domestic knowledge, data, operations and analysis. Warning is not good enough without the structure to put it into action. We all understood bin Laden's attempt to strike the homeland, but we never translated this knowledge into an effective defense of the country. Doing so would have complicated the terrorist calculation of the difficulty in succeeding in a vast open society that, in effect, was unprotected on September 11th.

During periods of heightened threat, we undertook smart, disciplined actions. But ultimately all of us acknowledge that we did not have the data, the span of control, the redundancy, the fusion or the laws in place to give us the chance to compensate for the mistakes that will always be made in any human endeavor.

TENET: This is not a clinical excuse. Three thousand people died. It was not -- no matter how hard we worked or how desperately we tried, it was not enough. The victims and the families of 9/11 deserve better.

Mr. Chairman, I've gone into changes that have been made to the Terrorist Threat Integration Center, other things that we have done through beginning, during and after 9/11 in terms of the integration of the community. We can talk about those things. I wanted to close just on four or five points about the future of intelligence and issues that you might want to consider as you think ahead to structures you may want to propose.

The first thing I would say is, we've spent an enormous amount of time and energy transforming our collection operational and analytical capabilities. The first thing I would say to the commission is that the care and nurturing of these capabilities is absolutely essential.

It will take us another five years to have the kind of clandestine service our country needs. There is a creative, innovative strategy to get us there that requires sustained commitment, leadership and funding. The same can be said for our other disciplines. Something has to be said about the importance of intelligence and how we look at this discipline for the country quite publicly.

Second, we have created an important paradigm in the way we have made changes in the foreign intelligence and law enforcement communities beginning with the Counterterrorism Center and evolving through the creation of TTIC with the fusion of all-source data in one place against a critical mission area.

This approach could serve as a model for the intelligence community to organize our most critical missions around centers where there's an emphasis on fusion, the flow of data, the fluid integration of analytical and operational capabilities.

Capabilities are important. The organization around missions where those capabilities are fully integrated in whatever structure you want to create I think is the way ahead in the future and that's the way we're moving.

TENET: Third, in the foreign intelligence arena, the most important relationship -- aside from the president -- that a DCI has, is with the secretary of defense. Rather than focus on a zero-sum game of authorities, the focus should be on ensuring that the DCI and the secretary of defense work together on investments tied to mission.

Why? Because together the investments that we make together in accounts that we don't jointly manage I believe have enormous power when they're synchronized, and the secretary of defense and I have been working just to achieve that.

Fourth, the DCI has to have and operational and analytical span of control that allows him or her to inform the president authoritatively about covert action and other sensitive activities.

Finally, our oversight committees should begin a systematic series of hearings to examine the world we will face over the next 20 or 30 years, the operational end state we want to achieve in terms of structure, and the statutory changes that may need to be made to achieve these objectives. And none may be required, but I believe some will be.

I have no doubt others will have other ideas. That completes my opening statement, Mr. Chairman.

KEAN: Thank you very much.

Questioning this morning will be led by Commissioner Kerrey.

BOB KERREY, COMMISSION MEMBER: Director Tenet, first of all, before I get into the questions, I want to say that I think it's five general things that's got to be understood that made the job of being director of central intelligence in the '90s exceptionally difficult.

The first is that -- and we're going to have to deal with it in report that there were significant numbers of Cold War-residual problems that we had to deal with. And I think part of the problem was we were so busy celebrating our victory in the Cold War, we didn't pay attention to Yugoslavia, we didn't pay attention to the trouble that could occur as a consequence in the Middle East, we were struggling to figure out how to deal with transitional problems in the former Soviet Union, et cetera, and, indeed, I think Afghanistan is one of those Cold War-residuals that a lot of us in the 1990s simply weren't paying enough attention to.

Secondly, I do think -- with great respect to your last statement, I do think that you lack authority and have substantial responsibilities that aren't matched up. And the evidence of that is the last time I checked, I think 35 congressional committees call you up from time to time to ask you to testify on a variety of different subjects, which, to say the least, sucks up a lot of your time.

KERREY: Thirdly, absent political leadership, there's nothing you can do. You're providing intelligence; you don't make the decisions.

Fourthly, I think congressional oversight is exceptionally weak, especially on the Senate side.

Fifthly, let me point out, because some of my questions deals with your term prior, that there was a very tough transition. John Deutsch left in December 1996. Tony Lake was nominated; it took forever. I think you were not confirmed until July of 1997. That was a very, very difficult and very risky transition, in my view.

Lastly, let me say that, unlike other DCIs, you probably for the rest of your life will be, like Judge Kevin Thomas Duffy, who was the judge in the World Trade Center cases, the Brjinka (ph) case, you're likely to forever be a target. And in other words, you have taken considerable risk beyond what former DCIs have done. And I want to thank you for that.

That said, let me get into some questions. I want to first talk about the Cole.

A lot of our commissioners have asked questions about the Cole, Director Tenet. It's been raised repeatedly. My own view is that it goes to the heart of our problems of dealing militarily with a significant unconventional military challenge. And what's hard for me to come to grips with today is why, with the evidence that we had, that the attack was al Qaeda, that we were -- and an operative that was connected to the bombing of the embassy in Nairobi, why were we so cautious? And why did both President Clinton and President Bush -- why couldn't they see military alternatives to cruise missiles and basically the Normandy invasion?

It seems to me that our failure to respond militarily, in particular the presidential directive that was put together in 1998 that failed to give the Department of Defense primary authority in dealing with al Qaeda and terrorism, it seems to me that that contributed substantially to our failure to prevent 9/11.

I'll just give you a chance to respond to that because there are several questions tucked in there. But do you think PDD 62 was a mistake? Do you think that we waited too long to respond militarily to an organization that we knew had declared war on us and called to jihad thousands of Islamic men to fight the United States of America?

TENET: Mr. Senator, you've talked to all the policy-makers -- and I'm not going to fudge the question; I'm not the policy-maker. They have to calculate the risks, the geopolitical context, what was going on at the time, the nature of the Pakistani regime, what Central Asia looked like, whether or not force could have been used. I can't make those decisions.

I will say that -- and I've said publicly -- the most important strategic decision that was ultimately made was to take down the sanctuary.

When you took down the sanctuary, your operational opportunities increased, intelligence increased, you put the adversary on the run. It generated an enormous amount of intelligence opportunity that was very helpful.

KERREY: But we heard yesterday that -- Mr. Pickard tell us that bin Laden and the Afghan sanctuary and those camps, he was turning out more individuals than we were turning out either at the CIA or FBI. And yet our military leaders through both the Clinton and the Bush administration will give you all kinds of reasons why the targets weren't sufficient. And yet after we were attacked in 9/11, we deployed this special operations in connection with your individuals that were enormously effective.

It seems to me that we had capability, in short, that either didn't get to the attention of the president -- he didn't know about it -- or for some reason it wasn't used. And it seems to me that it would have had a very negative impact upon al Qaeda's capability of attacking the United States.

TENET: Senator Kerrey, I can't take you beyond that -- my previous answer. These were tough and difficult policy calls that people were making and I'm just going to have to leave it at that.

You've heard from all the policy-makers. They all thought about these issues. They were complicated issues. And I'll leave it at that.

KERREY: Let me get into my second line. And again -- I'm going to focus on a period of time during the transition, so some of this -- your transition, so some of this you're going to have to be answering both for yourself and perhaps for Director Deutsch as well, or whether or not the communication came to you.

But one of the most remarkable things that the staff has uncovered -- and you heard a piece of it in the testimony of the staff statement -- was that Jamal al Fadl comes into court in 2001 and describes what he said when he walked in in 1996.

KERREY: What he said was that al Qaeda was a significant military force. What he said was that Osama bin Laden headed a terrorist organization of his own. He said it was an organization that was far more than a mechanism to raise money for his terrorist financing role. What he said was that this organization was intended to be the foundation for an Islamic army, and it declared the United States as its main enemy long before the public declaration in August of 1996.

What he said was that Osama bin Laden had sent top leaders of its weapons trainers into Somalia to shoot down -- to provide the Somalis with the weapons used to shoot down the U.S. helicopters and train them in how to use them to accomplish exactly they did in October of 1993. What he said was that bin Laden's organization had done the same thing for the Yemeni squad that carried out the attack aimed at the United States troops in Aden less than a year before.

And you heard again in the staff statement, we had a national intelligence assessment in '96, I believe, or '95.

TENET: '95 and '97.

KERREY: And what we got was an update that didn't include any of this. What we got was an update that didn't include the information that this individual says in court that he delivered to us, and he said it was corroborated.

So why? Why wasn't it not in the update? Why didn't the president of the United States and the key policy-makers get this information?

TENET: I'm sure -- well, now you're making the assumption that because it was not in the national intelligence estimate, this data was not broadly disseminated, explained and understood by people at the time, and I believe it was.

JOHN MCLAUGHLIN, DEPUTY DIRECTOR, CIA: I don't recall, Senator, whether that particular individual, in his testimony, was included specifically in the '97 update.

What I do know is that in the staff statement, the staff statement failed to note that in the '97 update we included information that people associated with bin Laden had been surveiling institutions in the United States, and that therefore we concluded the likelihood was growing that he would attack in the United States. That was, I think, the most significant finding in the '97 NIE.

And it was also in this period, 1996, that we formed the bin Laden issue station. So we were very focused on this issue.

TENET: This is a critical issue.

KERREY: I think so.

TENET: No, it's a critical issue. You're making an assumption that because of it's not in a national intelligence estimate that the way we were organized to brief people, pass product out, talk to them about this meant that people weren't getting this kind of data. That's just not true.

KERREY: Well, I'm not making that presumption. I'm making, first of all, the presumption that the NIE is a foundational document that lots of people use and that -- I mean, this is a very specific set of information that he said in trial he provided to us. And we continue to regard bin Laden -- you heard in the staff statement -- we continue to regard him as a relatively small threat.

I didn't know. I didn't know in 1996 or 1997 that bin Laden was responsible for sending forces down into Somalia to shoot down our Black Hawk helicopters. I didn't have a sense that this is what he was doing.

And let me just ask you -- I mean, I know that this is your transitional moment, so -- this is '96 to '97. Did you ever have a conversation with President Clinton where you told him that al Qaeda was a substantial military effort, that they were responsible for shooting down our helicopters in Mogadishu, that there was a substantial military threat to the United States of America, that we ought to ramp this guy up to the top of the list?

TENET: Sir, I will go back and look at my -- I didn't come prepared with what happened in '97. I'll go back and look at my records, look at the data dissemination, go back through the meetings that were held at the time and give you an answer to the question.

KERREY: Director, the reason I think this is central because we have heard -- I mean, I have heard a series of excuses from Sandy Berger, Bill Cohen, Madeleine Albright, Don Rumsfeld, Condoleezza Rice -- all kinds of rationalizations. And one of the things I've heard over and over and over was, "The American public wouldn't have supported any action had we taken action before 9/11."

Now, I've got to tell you, I think if the president of the United States of America had come and said that Osama bin Laden and al Qaeda is responsible for shooting down a Black Hawk helicopter in Mogadishu in 1993, I believe that speech would have galvanized the United States of America against bin Laden and would have prevented -- I think would have given you permission to do operations that you didn't have permission to do; would have changed the whole dynamic.

I mean, I just can't believe that if the president of the United States had said that in 1994, '95, '96 -- I mean, whenever -- you've got the walk-in in '96 -- if he'd have done it in '96 or '97, I just can't believe that public opinion wouldn't have been on his side just like that. Don't you think so?

TENET: Sir, I'll go back and look at it all and come back to you.

MCLAUGHLIN: I might mention, in that connection, since, Senator, you're talking about the extent to which various publications in this period included warnings about bin Laden and also his activities and the role of Afghanistan and so forth, I mention what I had said earlier about the '97 NIE.

In 2001, there was an NIE that I don't think your staff statement mentions about Afghanistan. It included a extensive discussion of the camp structure, the camp architecture, in Afghanistan. It noted that the Cole bombers had trained in those camps. It noted that Ressam, who had been involved in the millennium plot, had been in those camps.

So that's something that was laid out in a national intelligence estimate. And as the director has pointed out, it's a matter of argument whether that galvanizes policy to do something or not.

KERREY: I appreciate -- we heard -- now that we've seen this August 6th presidential daily briefing -- after we've seen that August presidential daily briefing, it was causing me to, sort of, have serious questions about how these daily briefings are organized.

But my guess is, the president has not seen the -- President Bush has not seen the information about who al Qaeda was; that -- my guess is that President Bush today -- he may be discovering it for the first time, that we knew in 1996 that bin Laden was responsible for shooting down helicopters in Mogadishu. You know, and this was in the trial in 2001. And it doesn't appear to me that he was briefed in transition. It doesn't appear to me that that was brought to his attention.

In other words, I think even as late as 2001, we were describing bin Laden as a terrorist, not somebody that had a substantial army and substantial capability and a history that went back long before 1998.

I mean, you -- the president says you meet with him practically every day.

KERREY: Did you bring that presentation to him? Did you describe, as the walk-in did in 1996 -- as he described in the trial in 2001? Did you bring that information to the president and say, "This is an army that's been engaged in an effort against the United States of America all the way back at least until 1993"?

TENET: Well, whether I took it back in '93 or not, sir, I don't recall. But we certainly walked through al Qaeda, its organization, the threat it posed, its previous affiliation with bombings and activities over a concerted period of time.

But I'll go back and look at whether that was specifically raised. I don't recall it. KERREY: I appreciate it. I'm going to do something I shouldn't do, which is yield back my time before my green light -- my red light goes on.

KEAN: First time you've done that, sir.

All right, Commissioner Lehman?

JOHN F. LEHMAN, COMMISSION MEMBER: Thank you.

Director Tenet, I want to join Bob in expressing my real admiration for the job you've done. I mean, you are a very entrepreneurial, gutsy guy who has worked very, very hard on this problem. You were one of the few officials who grasped the threat very early on. And you were responsible, your leadership, for making the agency run faster and jump higher during your tenure. And I admire you for that.

Another one of your virtues is that you're a team player, and I think you have resisted the temptation to join in in recommendations for changes, because you're part of the administration.

But last night, I think things changed a bit, in that the president has now endorsed major reforms, institutional reforms, and I think that frees you up a little more to answer some questions.

First, we've been struck by -- and when I say "we," I mean most of the commissioners and all of the staff -- by a real difference between our interaction with FBI and our interaction with the agency. The bureau, while it's been defending various actions and issues, has fundamentally admitted they're in an agency that is deeply dysfunctional and broken, and make no bones about it.

LEHMAN: Whereas, the attitude we, kind of, get from CIA, institutionally, is that, "Hey, you know, we're the CIA." A kind of a smugness and even arrogance toward deep reform.

I'm not ready for your answer yet, but...

(LAUGHTER)

This is all preamble.

(LAUGHTER)

TENET: I'm warming up, sir.

LEHMAN: Go ahead, you can interrupt if...

TENET: No, sir. You're on a roll.

LEHMAN: But that report that you heard this morning was a damning report. Not of your actions or the actions of any of the really superb and dedicated people that you have, but it was a damning evaluation of a system that is broken, that doesn't function. And all I have to do is reread the PDB which the agency resisted so strongly our declassifying, and the key line is, "We have not been able to corroborate some of the more sensational threat reporting, like the intention of bin Laden to hijack U.S. aircraft."

All the king's horses and all the king's men in CIA could not corroborate what turned out to be true, and told the president of the United States almost a month before the attack that they couldn't corroborate these reports. That's an institutional failure.

And I'm here to tell you, and I'm sure you've heard it before, there is a train coming down the track. There are going to be very real changes made. And you are an invaluable part of helping us come to the right conclusions on that.

So now I have a few questions. First, why shouldn't we have a DCI who worries about the community with the authorities to do that, without having to worry about the day-to-day running of the CIA?

TENET: Can I get a little preamble time myself?

(LAUGHTER)

LEHMAN: As long as it's on his time.

TENET: It's on Senator Kerrey's time.

First of all, I want you to know that I have serious issues with the staff statement as it was written today. I have serious issues about how the DCI's authorities have been used to integrate collection, operations.

When the staff statement says the DCI had no strategic plan to manage the war on terrorism, that's flat wrong. When the staff statement says I had no program strategic direction in place to integrate, correlate data and move data across the community, that's wrong.

I just want to say to you that I would like to come back to the committee and give you my sense of it, at the same time telling you, it ain't perfect. And by no stretch of the imagination am I going to tell you that I've solved all the problems of the community in terms of integrating and in lashing it up. But we've made an enormous amount of progress.

I would tell you also that -- this is the perspective I lived. Nobody else can live what I lived through. I believe that if you separate -- if you separate the DCI from troops, from operators and analysts, I have a concern about his or her effectiveness, his or her connection.

Now, you may want to have a different structure. You may want to have a different CIA, sir, in terms of how you manage it, so there may be some things we can do there. But I wouldn't separate the individual from the institution. You may manage it differently, because I believe that one of the concerns I have is, if you create another layer and another staff between something that's supposed to provide central organization, all-source analysis and operations, we've created another gap and a distance.

So I wouldn't design America's intelligence community 56 years later the way the National Security Act designed it. I would recognize that the key operational principle is not who is in charge of the wire diagrams, but the way data flows, is integrated between analysis and operations. And in the 21st century, technology is your friend, not an enemy, and from a security perspective, it also makes your life easier.

I would be very focused on organizing around missions and ensuring the capabilities were built, but the mission focused and centers drove the way we operated against the things that mattered most to us in terms of the foreign intelligence target.

You can structure on top of that. You can lay anything you want on top of that, sir. But I think that that integration is what's key. And you can figure out the wire diagrams and the authorities any way you want.

TENET: I would tell you that the lesson is, yes, of course, we need more change. Of course.

I think -- you know, if I can tell you if I had made -- if I failed or made a mistake, I've been evolutionary in terms of the community. Maybe I should have been more revolutionary.

I sit back at night and look at a war in Iraq, a war on terrorism, conflict in Afghanistan and all the things I have to do and recognize, you know, no single human being can do all these things. I understand that.

So maybe some structure is required.

But I would also urge the commission -- and I will come back to you formally -- to take a look at some significant things that have happened in the management of the community, of our resources, of our people, of our collection, of our training, of our education because they are building blocks that, quite frankly, I'm proud of.

LEHMAN: Well, I think that you're really making my point. I think that my experience in this town has been, there are only two things that matter in doing management and oversight because everybody makes the same amount of money. You can't give bonuses to people and your hiring and firing is somewhat limited.

You've got the ability to hire and fire the top people if they don't perform and pick the ones that do perform and promote the ones that do perform, and you've got appropriations power. And neither of those things do you have for the responsibilities of cross-community. You've wielded them very well within your agency, but all have you for cross-agency -- cross-community -- is exhortation and the power of your logic, which has been powerful, but not powerful enough against big bureaucracy.

So why shouldn't you -- let's step into my Alice in Wonderland and you've been detached from CIA. You don't have to run it anymore. You are now a DCI who is principally seized of solving the problems that we have identified and you've struggled with for these years.

Why shouldn't you have the power to hire and fire -- more importantly -- the head of NSA, the head of the FBI intelligence section, or a separate MI-5, the head of the CIA, the head of all of the alphabet soup that are really national intelligence assets?

LEHMAN: Why shouldn't you have that?

TENET: Well, let me talk to you about my Alice in Wonderland -- just to talk through this a little bit.

You could do that, sir, but I want to bring back an issue that I think is quite important here.

We need to understand the relationship between the DCI and the secretary of defense in a very, very fundamental way. Why?

You have an organizational structure today that basically has -- three or four of the major organizations are combat support organizations. They provide tactical support to the military as well as support the national intelligence needs.

And somehow in the structure that you create, he must be a partner in designing this framework to ensure that we don't miss -- or don't crack a seam that we're trying to build together -- because he executes tactical and other programs that in effect add to the power of what the DCI can do.

But we have to wrestle with that in some way. So everybody wants to empower this individual with all kinds of powers. And all I'm asking is: Yes, could a DCI be more powerful? Have more executive authority? Execute budgets, joint personnel policies?

You know, the question ultimately is: Is there Goldwater-Nichols framework here that works? Is there some new framework that we have to put in place? All I want to focus on is: Don't throw the baby out with the bath water. Don't miss the capabilities that have to be grown. Don't separate those capabilities from a chain of command that can only execute them and then figure out how that mesh works.

Now, the person you describe probably would survive for about 20 minutes in terms of what's going on in this town. And you probably went a little bit too far, but look -- we have to be open to thinking like this.

I've done it one way. It ain't the perfect way -- and within the structure that I lived in, the power of persuasion and cajoling is absolutely important.

TENET: Because you know at the end of the day you still have to lead. You can have all the authority you want. It may not matter. So it's a little bit more complicated but all of it should be on -- all I'm saying to you commissioners, it should all be on the table.

But before we rush to a judgment don't we want to know what the world's going to look like? Don't we want to understand, with some precision, where do you want to end up? And I think you have to focus on that fusion of capabilities around mission first and foremost, and then decide the rest. It will flow from there. The power of forcing that collaboration in and of itself breaks down the walls.

LEHMAN: Well, I agree that the people and the personalities are the most important of all. But, for instance, no matter how forceful you are, you have been unable -- and no one without the real authority over appropriations could sort out the chaos of our security system, our background investigations, our classification system. No one can do that without power.

The networking -- Goldwater-Nichols is not one of my favorite pieces of legislation, but one of the things that it really achieved, which is a tremendous improvement, is forcing and giving the CINCs the ability to force the ability to the services to work together.

For instance, special operations forces operated off aircraft carriers. They could never do that before because it was an authority that could force the commonality, the protocols, if you will. Like everybody in the commercial world uses the Internet protocols. There are no protocols for the intelligence community for sharing. This is an IT problem. It's a deep, embedded, functional problem throughout the community for common protocols for information.

That is really an issue of appropriations being cut on the Hill or not being allocated within the agencies to do it. We heard testimony from the FBI who wanted to do that kind of thing and still hasn't done it because of the appropriations.

So why shouldn't you, as the new DCI, have that appropriations authority at the top level, not -- one of the bad things about Goldwater-Nichols is it's increased layers of bureaucracy at the center.

LEHMAN: We don't want that.

TENET: No, we don't.

LEHMAN: But the GE, another good company model, where you have a very small powerful staff at the center and execution done in the departments, is the model that is beginning to take shape in our mind. What do you think of that?

TENET: It's a good model, sir.

I mean, the power -- the smaller the staffs, the more power you have over execution, the better off you're going to be at the end of the day. With real metrics and power to move people and data as you need to to achieve better execution is a smart way to think about this discipline for the future. LEHMAN: Now, I said this train is coming down the track. And you used the word revolution rather than evolution. I think that's a perfect way for people to understand this.

You've done a terrific job in the evolutionary change, but it's clearly not been enough. Revolution is coming.

How do you do revolution without losing sight of the business that you're in? You can't take your eye off the ball. Do you think this can be done in a rational way?

TENET: Frankly, my personal view is that you really do need an outside group engagement, recommendations to come forward. I think it's -- people like me and John and people working in the business can certainly inform.

I've got a group now I've put together on revolutionary change in the intelligence community, and ideas that are flowing to me. I think you need something established to come back to you, react to you, push you and prod you and get you out of your skin and your daily responsibilities to get this done in the right way.

I think it's hard when you're sitting -- I mean, the day I retire, I'll be a great person to sit on one of these things, and I'd love to do it.

(LAUGHTER)

But I think that the important thing is, it's very hard for people when they're sitting in the in-box on the crisis of the day to be reflective. And occasionally I have reflective thoughts. It's not often enough to deal with a problem like this.

I think you've got to separate the current group to allow -- we can give you the data, give you our experience and talk to you about it. But I think you almost need a separate group of people who have been around this.

But you also need people who have revolutionary ideas about technology and how it works and a new mindset, because the people you're recruiting aren't 30-year veterans anymore. You're attracting a whole new labor force that doesn't remember the Cold War, and they expect a structure that's going to be more agile and mobile and more technologically proficient.

TENET: So we've got to take this in a different direction.

The only thing -- I have to keep coming back to a point. My worst nightmare is that somebody's going to show up and say, "All that human investment is wrong. All that technical investment is wrong." Where we've positioned ourselves has to be sustained creatively and innovatively, and I think you've got a way ahead in that regard that's quite impressive.

And once people lose sight of where the country needs to be, the starts and fits in cycles that this community has gone through has to stop. Let's get budgeting on a two- or three-year cycle. Let's allow us to build programs in depth. Let's really look at basic expenditures over the course of time. Let's put the metrics in place.

But I'll tell you, you can't build this community in fits and starts. It won't happen and the country will suffer. And you know, this, I think, is a debate that has to be joined quite publicly.

Everybody talks about military capability or law enforcement capability. Well, we sit behind the green door. And for the bang for the buck, the American taxpayer gets a hell of a lot for what we give them. And you know, we ought to find a way to talk to the American people about it as well, because I think they'd be supportive.

LEHMAN: Well, I had the preamble. I guess I ought to let you have the closing paration (ph).

Thank you. That's very helpful.

TENET: Thank you, sir.

KEAN: Thank you.

I just have a couple of questions, if I could.

First of all, I'd like to say in many ways how much I admire you -- how much I admire you in a town that's as polarized as I've ever seen it. You're the only high official who has managed to get the confidence of two presidents, and I think that's very much to your credit, sir.

I'm waiting -- I will wait anxiously. The staff statement is an indictment in many ways of the agency. I await your answer to some of those things in the staff statement.

I also recognize that this is an agency which was devastated earlier by, in many cases, I think mistaken critics in the Congress.

KEAN: Mistaken or otherwise, a lot of good people left. It was very hard to rebuild the agency. You were unable to recruit on most of the good campuses in this country for a number of years.

But when you tell me to -- you said it the second time now, five years to rebuild, I wonder whether we have five years. When you say five years to rebuild the agency, that worries me a little bit.

TENET: Five more years to rebuild the clandestine service.

Well, sir, you know, you have an infrastructure, you have a recruiting framework, you have a quality control, you have a student- to-faculty ratio, and you have a big pipeline. We built all of that in to make sure we can get this done.

Nobody was paying attention to the plumbing. It's not sexy. You got to pay attention to the plumbing.

And the bottom line is, to do this right, to build the platforms and access and cover and technology that we need -- it's budgeted for, the president has recognized it -- it's going to take another five years to build a clandestine service the way the human intelligence capability of this country needs to be run. That is just the fact from my perspective.

We've made an enormous amount of progress in the first five years because we had a plan. We had a rhyme, we had a reason, we had a discipline. And I don't think people appreciate that the way they should.

KEAN: Probably the most important criticism -- one of the most important criticisms made of the whole intelligence apparatus is you don't talk to each other, or haven't in the past, and there's a lack of communication.

I guess specifically I'd like to ask, what actions are being taken now to make sure, for instance, that the FBI's legal attaches and the CIA's station chiefs at least are working in tandem?

TENET: Well, Mr. Chairman, it's interesting.

Back five or six years ago when the FBI first started to go overseas in big numbers, the first thing that Louis Freeh and I sat down and decided was that we were going to start having training conferences and interaction between the chiefs of station and the legates. And it's migrated over the course of time.

And I think if you go overseas and talk to my chief of stations and our legates around the world, you will find an intimacy and an understanding about their responsibilities and roles that is the basis of interaction and communication from senior levels, the way we train and the way we talk to each other.

So I know that there was a lot that wasn't right about communications.

TENET: But I'll tell you, the first thing I did with Director Freeh is every quarter we sat down with the senior management of the FBI and the CIA. Every year, four times, we sat down and looked through common problems and how we could work through them -- operations, investigations, how we could train better and work better together. And that started as soon as I became director.

So now, what we needed and have worked on consistently in doing -- that all has to be migrated down to training and education at the earliest levels of people's career, cross training. We're going to have an FBI special agent come through our clandestine training course for the first time in history in the next running of that course.

It's important, because we need to give them more training and insight about intelligence operations. We went over there and are helping them build their analytical capability. We're trying to help them build their reports cadre.

Their communications architecture is something Bob has to fix himself to ensure that that communication is fulsome across lines. I would also say that the implication of the intelligence community can't talk to each other is wrong. There is architecture, data flow and movement of data across our agencies every single day.

Building that bridge with the law enforcement community, as the Terrorist Threat Integration Center will do when you have FBI case files, our operational files, domestic databases sitting in one place, it's exactly the model that will succeed. But the data has to show up.

KEAN: You are very good at building relationships with your colleagues in government, there's no question about that. But one of your successors might not be.

Whose responsibility, if there's a dispute, for instance, between the two agencies regarding the best strategy, let's say, against a particular enemy and do the people in the field understand how those disputes are resolved?

TENET: Well, the way it operates today, deputy chief of our counterterrorism center is a senior FBI official. There are over 20 FBI officers who sit in my center today. We have officers over there. I've invited the committee to come out to sit through a 5 o'clock meeting.

TENET: We have real operational issues that we put on the table. We have now an American division inside of CTC that basically talks to the bureau about, "How do we best manage this case? What's the data that we seek? What's the operational strategy that we should employ?" And we're fusing that in a very real way.

Now, when the Counterterrorism Center and the Counterterrorism Division and TTIC all go to one building, the image you should have is not, you walk into the building and the CIA goes right, the FBI goes left and TTIC sits on the throne. The image you should have is that Bob and I are going to sit down and figure out what are the integrative structures across those lines that will create the kind of operational fusion we need so that we're fully informed about how best to proceed in a specific case. That's the future of the cooperation.

KEAN: Thank you, sir.

Commissioner Ben-Veniste?

RICHARD BEN-VENISTE, COMMISSION MEMBER: Good morning, Director Tenet.

TENET: Morning, Commissioner.

Let me first say that I have enormous respect for your dedication, and the dedication of CIA officers who I have met, in their desire to complete the mission. The people at Alex (ph) station and that has come out earlier -- that name has come out earlier in these hearings, not by us -- who I have interacted with are heroes and dedicated individuals who I sense died that day on September 11th, in a way that many Americans did, but perhaps more particularly because of their efforts over a long period of time to deal with these committed, brutal, inhuman enemies of the United States.

I want to talk about the PDB briefly.

BEN-VENISTE: I think the individual who produced this PDB and her supervisor are entitled to a debt of gratitude for attempting to bring to the attention of the president of the United States the possibility -- and given all the information we knew -- that despite indications leading to the notion that this incredible threat level that we were experiencing in the summer of 2001 leading to the horrific, dramatic, horrendous -- whatever adjective you want to use because there were many employed -- spectacular attack by bin Laden might well occur in the United States -- to me is extraordinary.

She was prescient. She was right.

The biggest word I saw in the PDB, aside from the title, was the word "nevertheless" leading the second to last paragraph. And that is despite the fact that the information could not have been corroborated regarding the use of the hijacking of airplanes, she said, "Nevertheless, FBI information since that time indicates a pattern of suspicious activity in this country consistent with preparation for hijackings or other forms of attack," and then goes on to talk about FBI efforts.

Now, obviously, she did not get the best information from the FBI, but she got what she could.

We know that the director of the FBI at that time did not get the PDB information and was not contacted, nor was the attorney general at the pulse of the FBI, to get all of the information currently extant.

You had indicated when we last spoke -- and I reminded you of the information sent to our commission by CIA, which was commenting on our staff statement before your testimony which was derived from the statement made to us privately by Dr. Rice who said that this PDB was prepared at the president's request.

BEN-VENISTE: At that time, on March 19th, you said to us, "The author of this piece and others familiar with it say they have no information to suggest that this piece was written in response to a question from the president. We do not know who reported that to the commission, but we do not believe it's accurate. The information we have is that it was prompted by an idea from another CIA employee."

Subsequently, you wrote to us, "The PDB article was in response to a series of events. Throughout the spring and summer the president was shown a number of pieces outlining intelligence indicating that al Qaeda was planning a large attack. During these discussions the president raised questions about whether the intelligence pointed to threats inside the United States.

"Although there was no formal tasking, the president's questions were discussed at a PDB planning session. At that time it was decided to do a piece laying out what we knew about Osama bin Laden's interest in striking inside the United States. When this item was presented in the PDB on August 6th, with Dr. Rice present, the briefer introduced the piece by referring to the president's earlier questions.

"In summary, although the August 6th PDB piece was technically self-initiated, it was prompted by the president's questions and interest."

Now, incidentally, Dr. Rice has testified she was not present.

MCLAUGHLIN (?): She was not present. We were in error.

BEN-VENISTE: OK. Let me talk about the issue of planes as weapons.

KEAN: The gentleman's time has expired.

(LAUGHTER)

BEN-VENISTE: That was a fast 10 minutes.

KEAN: It was quite a preamble.

Do you want to finish your question?

BEN-VENISTE: Yes, I do, if I may.

KEAN: Go ahead and ask your question.

BEN-VENISTE: Let me just follow up on this one area, although I have several.

The G-8 planning -- which I think the G-8 occurred in July of 2001.

BEN-VENISTE: We know that the Italians closed the airspace over Genoa -- and indeed they closed it over Naples for the pre-planning session, and then over Genoa. I don't think that was noise control. I think that had to do more with a threat of the use of airplanes used by suicide pilots.

But even a couple of months before September 11th we know that there was a planning session by NORAD where military officials considered a scenario in which a hijacked foreign commercial airliner flew into the Pentagon -- months before.

And so, people clearly were thinking about this possibility. You had information in August that came from the FBI regarding an Islamic jihadist in the United States named Zacarias Moussaoui, who had been in a flight school in Minnesota and he had been trying to learn to fly a 747 despite the fact that he had absolutely no background in aviation.

He could not explain a bank account of $30,000-odd deposited in cash. He could not explain his presence in the United States. He could not explain why he was trying to learn to fly a 747.

Now, this information came to you via the FBI because the FBI could not -- in their interpretation -- use the information to get a warrant to search Moussaoui's computer, et cetera, under FISA, according to their thinking.

BEN-VENISTE: So they looked to CIA to get that information.

The FISA court protects against improper prosecution, violating laws with respect to the potential of prosecuting this man.

My question is this.

Given the threat level, given the knowledge about planes as weapons, given the fact of Moussaoui's arrest, why was it that you didn't put the question of prosecuting Moussaoui to the side and go after the information which may well have led to unraveling this plot?

TENET: I'd have to go back and look at all -- when we talked in private session, we wanted to come back to Moussaoui. I have not gone back and reviewed all of that data at the time as to why I would make a decision to forego prosecution. That's not a call I could make.

But, Commissioner, I want to go back and prepare and look at all of the things that were on the table at the time. And I'd be happy to sit down with the commission and walk through everything that was happening at the time. And I'm not trying to duck. But we need to sit down and go through this. We said we would when...

(CROSSTALK)

BEN-VENISTE: And I'll tell you parenthetically, the FBI agent was criticized for going directly to the CIA instead of going and running this through headquarters, which would have taken even more time.

LEE H. HAMILTON, COMMISSION VICE CHAIRMAN: Mr. Roemer?

TIMOTHY J. ROEMER, COMMISSION MEMBER: Thank you, Mr. Vice Chairman.

Nice to see you, Mr. Tenet.

I want to just say, on behalf of the commission, that there is probably nobody that we have interviewed that has been as generous with his time and as helpful to the 9/11 commission as you. And we very much appreciate that time and that attention and your expertise.

I want to try to ask as many questions as Mr. Kerrey, Ben-Veniste and Lehman put together in my five minutes and see if you can help me by giving me some short answers, Mr. Tenet.

TENET: Depends on the questions. But go ahead, sir.

ROEMER: Let's see.

In the Woodward book, you say, immediately upon learning of the 9/11 attacks, that it's al Qaeda and you mention somebody in a flight school.

ROEMER: I assume that's Moussaoui. Is that correct? TENET: These are words attributed to me. I don't recall that piece of it, but I know I got up immediately and said, "It's got to be al Qaeda."

ROEMER: And do you have the information at that point on Moussaoui?

TENET: Yes, I was briefed on Moussaoui in late August.

ROEMER: August what?

TENET: I believe it's the 23rd or the 24th.

ROEMER: August 23rd or 24th. Is Mr. Pavitt or Mr. McLaughlin briefed on that as well?

MCLAUGHLIN: Yes, sir. I was briefed, I think, several days before.

The director was out of town. I heard it first in a very abbreviated manner. And then I think the director was briefed in a...

ROEMER: What was the date that you were briefed?

MCLAUGHLIN: I can't recall.

ROEMER: Middle of August? August 15th? Earlier?

MCLAUGHLIN: No, I just don't recall. It was some time in August. It was just a couple of days before the director.

ROEMER: Now, do you all share this information, then, with other people at CTC and FBI and other places? What do you do with this information?

TENET: I believe that the context of the information -- and again, I've got to go back and review all of this carefully.

The context of this information is, is it came to us from one of our domestic field stations, who was asked to provide some assistance in dealing with this FISA request. That's the context it came to us.

And I believe in that time period we immediately tried to undertake a way to figure out how to help the FBI get data and deal with this particular problem. But I'd really want to go back and check records.

ROEMER: With this interesting, curious, fascinating piece of data, do you share this data at the September 4th principals' meeting with other people in the room at that point when you're discussing this policy that has taken seven months to make its way through the process on al Qaeda?

TENET: It wasn't discussed at the principals' meeting since we were having a separate agenda. My assumption at the time was, Mr. Roemer, that this was something that would be laid down in front of the CSG and people working this at the time.

ROEMER: Why would you assume that that would be...

TENET: Because all terrorist...

ROEMER: Why not bring it up to the principals? This is the first principals' meeting in seven months on terrorism. Why wouldn't that be something that you would think would be interesting to this discussion?

TENET: The nature of the discussion we had that morning was on the Predator, how we would fly it, whether we...

ROEMER: But it's an overall policy discussion about al Qaeda and how we fight al Qaeda.

TENET: Well, it just wasn't -- for whatever reason, all I can tell you is just it wasn't the appropriate place. I just can't take you any farther than that.

ROEMER: Would it have made any difference if you had mentioned -- did you ever mention it, for instance, to the president -- your briefing the president from August 6th on?

TENET: I didn't see the president. I was not in briefings with him during this time. He was on vacation. I was here.

ROEMER: You didn't see the president between August 6, 2001, and September 10th?

TENET: Well, no. Before -- saw him after Labor Day, to be sure.

ROEMER: So you saw him September 4th -- at the principals' meeting?

TENET: It was not at principals' meeting.

ROEMER: Well, you don't see him...

TENET: Condoleezza Rice -- Condoleezza -- I saw him in this time frame, to be sure.

ROEMER: OK. I'm just confused. You see him on August 6th with the PDB.

TENET: No, I do not, sir. I'm not there.

ROEMER: OK. You're not -- when do you see him in August?

TENET: I don't believe I do.

ROEMER: You don't see the president of the United States once in the month of August?

TENET: He's in Texas and I'm either here or on leave for some of that time, so I'm not here. ROEMER: So who's briefing him on the PDBs?

TENET: The briefer, himself. We have a presidential briefer.

ROEMER: But you never get on the phone or in any kind of conference with him to talk at this level of high chatter and huge warnings during the spring and summer to talk to him through the whole month of August?

TENET: We talked to him directly throughout the spring and early summer almost every day.

ROEMER: But not in August?

TENET: In this time period, I'm not talking to him, no.

ROEMER: Does he ever say to Dr. Rice or somebody else, "I want to talk to Tenet. Tenet is a guy that knows this situation, has been briefing me all through the spring and the summer. Tenet understands this stuff. His hair's been on fire. He's been worried about this stuff." Is that ever asked? Or are you ever called on to...

TENET: I don't have a recollection of being called, Mr. Roemer. But I'm sure that if I wanted to make a phone call because I had my hair on fire, I would have picked up the phone and talked to the president.

ROEMER: It was just never made.

TENET: No.

ROEMER: Last question and I'll be quick.

On the NSC staff, Mr. Clarke is there for a long period of time. People have various opinions of Mr. Clarke. There's a great deal of turnover on the NSC staff from 2001 on. Is that correct? Mr. Clarke resigns or moves on in 2001, General Downing (ph), General Gordon (ph), Fran Townsend (ph), is that correct, the line up of people? How does that impact your ability to get information and communicate with the CSG, if at all?

TENET: I don't believe that it does because there's a standing structure in place. Somebody else may be running it. But my understanding is it continues to work the way it always has.

ROEMER: Despite the importance of personal relationships, you are one of the best in this town and...

TENET: Well, I don't go to the CSG myself. But I think if we talked to our people, I think our people would say we continue to go to these meetings and impart data.

ROEMER: But you talked extensively with Dick Clarke is my understanding.

TENET: Well, I don't know if extensively is correct. ROEMER: OK. Often?

TENET: Well, I don't know how often in that time period. I mean, there were phone calls, but I can't tell you it was extensive during this time period.

ROEMER: OK. Thank you.

And thank you for helping me with the questions.

TENET: Thank you.

KEAN: Congressman Thompson?

JAMES R. THOMPSON, COMMISSION MEMBER: Mr. Director, I'm going to try one more time on the PDB of August 6th, and then I'm going to stop talking about it. Because sometimes when the PDB is read here or on television stations, it's only sort of half read. So I'd like to read the whole sentence if I can.

On the first page of the PDB, and you'll grant me, I suspect, that almost all of the information in the PDB relates to the period 1998 or 1988, three years before September 11th.

THOMPSON: Is that correct?

TENET: Most of the data is in this time period, and the second page, as you know, is more current data as...

THOMPSON: Right.

TENET: ... the result of the specific walk-in that comes in -- that there is a CSG held on on May 15th through May 16th, and then there's the specific data about surveillance in New York.

So there's -- most of it at the front end is historical in nature, or it's background is what I'd call it -- older data -- and then you flip the page and you get to more current data.

THOMPSON: OK.

Near the bottom of the first page it said al Qaeda members including some who are U.S. citizens have resided in or traveled to the U.S. for years and the group apparently maintains a support structure that could aid attacks.

If we are to credit Tom Pickard's testimony yesterday, the 9/11 plotters in fact did not turn to any group of supporters within the United States to aid their attacks. Is that correct?

TENET: I think to the best of our knowledge that's true.

THOMPSON: OK.

MCLAUGHLIN (?): What the analyst was thinking about there was the fact that some of the defendants in the East Africa bombing trial had resided in the United States at one point in their past.

TENET: Right.

MCLAUGHLIN: So she was connecting dots, if you will.

TENET: Right.

THOMPSON: Last paragraph on that page.

"We have not been able to corroborate some of the more sensational threat reporting such as that from a service in 1998" -- three years earlier -- "saying that bin Laden wanted to hijack a U.S. aircraft to gain the release of Blind Sheik or other U.S.-held extremists."

And that turned out not to have anything to do with September 11th, is that correct?

TENET: And the concept of corroboration of course is, Commissioner Lehman, did you get another piece of HUMINT? Did you get another piece of SIGINT? Is there a walk-in who's come in to tell you the same plots?

So corroboration is just: Do you have more than one source and is it valid? So that's what we meant by corroboration.

THOMPSON: Top of the second page.

"Nevertheless, FBI information" -- so this is something coming to you from the FBI, not your self-generated -- "since that time indicates patterns of suspicious activity in this country consistent with preparations for hijackings or other types of attacks."

THOMPSON: But the only reference here is "including recent surveillance of federal buildings in New York, which turned out to be, according to the FBI, Yemeni tourists."

Is that right?

TENET: That's what we've been told, yes.

THOMPSON: "The FBI is conducting approximately 70 full field investigations throughout the U.S. that it considers bin Laden- related."

FBI testimony here yesterday sort of downplayed the notion that there were 70 full field investigations going on because they said each person being looked at constituted a separate full field investigation, something that was sort of news to us on the panel yesterday.

TENET: I'd have to leave it to the director this afternoon to clarify whether the number is correct or incorrect.

THOMPSON: OK. On page eight of your prepared statement, Mr. Director, you say, "Fourth, the DCI has to have an operational and analytical span of control that allows him or her to inform the president authoritatively about covert action and other very sensitive activities."

What does that mean?

TENET: It means to me that there are a range of activities, the president grants authorities for the director of -- you pick whatever you want him to be -- that I believe that that person has to be intimately tied to the directorate of operations carrying out that covert action and has to have an ability to understand other sensitive collection and other activities with some intimacy to be able to tell the president authoritatively, not only how you're operating, but what the risks are, what the political downsides are.

Somebody has to be responsible and tied to the people who are carrying out those activities is what I meant.

THOMPSON: And we don't have that now?

TENET: No, we do.

THOMPSON: We do?

TENET: You have it in the form of the current DCI.

THOMPSON: You?

TENET: Yes.

THOMPSON: OK. And we should not change that, in your view?

TENET: Well, I think it's something you need to think about quite carefully. I wouldn't.

THOMPSON: OK.

TENET: Again, as I came back, you can restructure the way I'm structured. But I would not take that kind of line authority from a person that has a direct report for the president, who also has a chain of command to the people who are executing these operations.

THOMPSON: Is there any reason why the domestic intelligence functions of the FBI could not be placed under the CIA?

TENET: Lots of good historical reasons, lots of privacy reasons. Just lots of reasons, sir.

TENET: I think that this is not appropriate. I would not want to be in a position where the DCI, given our statutory framework, our laws, our privacy, our history -- I don't think it's appropriate.

THOMPSON: Why is...

KEAN: This is your last question, Commissioner. THOMPSON: Why is privacy more of a concern under the CIA than it would be under the FBI?

TENET: Well, sir, since -- I don't want to be flip about this, since we operate almost extensively in an overseas environment, we operate with a certain degree of impunity with regards to other countries' laws. Since we're operating clandestinely and collecting clandestinely, and we're not going to a judge to tap somebody's -- whatever we're doing, or launching surveillance, it's a different context for us.

THOMPSON: Yes. But you could do what the FBI does now, right?

TENET: Probably not, sir.

THOMPSON: Couldn't. OK.

Thank you, Mr. Director.

TENET: Not with a criminal arrest, legal and other things. That is not something that I think we are competent to undertake in the current structure.

THOMPSON: Thank you, Mr. Chairman.

KEAN: Commissioner Gorelick?

JAMIE S. GORELICK, COMMISSION MEMBER: Thank you, Mr. Chairman.

Mr. Tenet, welcome back. You've given us a great deal of your time and we very much appreciate it.

It's very important, I think, for us to understand your roles as both director of central intelligence and as head of the CIA, both before 9/11 and afterwards. Let me ask you just two sets of questions.

You have gone to great lengths to say to us that you are not a policy-maker. Is that right, that you don't play a policy-making role?

TENET: Yes, that's my belief.

GORELICK: Yet when Dr. Rice was testifying before us about the summer of threat, what she says is that there was indeed an intensity across the government. She says, coming from the top because the president was meeting with the director of central intelligence.

And so my question, just to be very clear about it is, you don't have any authority currently -- and maybe ever, if you have your druthers -- over the FBI, do you?

TENET: No.

GORELICK: And you don't have any authority over the Department of Justice, do you? TENET: No.

GORELICK: Or the FAA, is that correct?

TENET: Correct.

GORELICK: And in fact, although your folks briefed the attorney general, you did not instruct any of these other agencies to do anything after your briefings. Is that correct?

TENET: That's correct. I believe that the data that we provide and the context to the CSG and the structure that informs actions that people are going to take.

GORELICK: Right. So your principal role is to inform and have that information on its own generate whatever activities within their domain.

TENET: Now, from time to time, particularly in the foreign environment, when we're going to deal with a foreign leader, I may cross the line because of my knowledge of the individual or previous conversations, and so you're asked a question in that regard. So I -- you know...

GORELICK: Right. And we know about the role you played in the Middle East peace and so forth and we appreciate that. But in this context, there was nothing emanating -- no operational activities outside of the intelligence domain emanating from your briefings or instructions that you carried?

TENET: I'm sorry. I don't understand the question.

GORELICK: You've answered my question. I want to go on to the policy question.

Looking to the future, you had a very interesting exchange with brother Lehman about what you might or might not be open to advising us to do as a country to restructure the way in which we are organized in the intelligence community, bearing in mind that 80 percent of the intelligence resources now reside outside -- at least 80 percent -- outside your span of control.

Now, in the spring of '01, the president of the United States, much to his credit, asked you in NSPD 5 -- in a presidential order -- to stand up an outside group to look at the structure of the intelligence community. And he asked Brent Scowcroft, the former national security adviser and current head of the president's Foreign Intelligence Advisory Board, to lead that effort.

GORELICK: And that report came in, I believe, in late '01 or maybe at the turn of the year, but not long after 9/11. Brent Scowcroft has briefed us on his recommendations, and, in fact, we now have a copy of his report.

And so I would like to ask you, very specifically if I can, and not to pin you down to definitive proposals, but really to ask you your view on some of these ideas, which were never implemented.

One, he says it's very important to have a separate appropriation that goes directly to the director of central intelligence for the CIA, the NSA, the other offices that currently reside over at the Department of Defense, so that you have the ability to direct that activity. Do you think that is a good idea or a bad idea?

TENET: I'm not certain.

GORELICK: OK, how about that the director of central intelligence have the ability to hire and fire the heads of those agencies?

TENET: Look, let's put all the cards on the table here, OK? I talked about a relationship with the secretary of defense that I really believe in, OK? And, you know, this is the kind of issue he and I have to sit down, sort out, and talk about. And I'll come back and we can talk about it.

I just think, you know, I am sitting in the middle of a structure, I do have a relationship with the secretary, I care about it a great deal, and I haven't reflected on all of these ideas. You have questions, and I just need a bit more time to think about where I am.

GORELICK: I think that's fair enough. And we were all just hoping that since the president had indicated a new openness to change, maybe you were a little more liberated to talk about it now.

GORELICK: And if this is not the right time, we'll be happy to hear from you in whatever way you would like to get back to us.

But we do have some very good work product created by people that...

TENET: I'd be pleased to do that.

GORELICK: ... that do meet the description of an outside group of thoughtful people, and we would very much like your views on it.

TENET: And I would appreciate that.

GORELICK: Thank you very much.

TENET: Thank you.

KEAN: Commissioner Fielding?

FRED F. FIELDING, COMMISSION MEMBER: Thank you, Mr. Chairman.

Director, thank you for coming back.

TENET: Yes, sir.

FIELDING: You know, you've been called an evolutionary. I think we all also appreciate the terrific job that you did candidly as a rehabilitator, which you had to do before you could become an evolutionary. And we're just trying to figure out where the revolutionary phase of this comes in.

But understand that there are criticisms to be leveled and there are a lot of probing questions, and the reason for that is the obvious reason: We've had a terrific intelligence failure, and it gets worse as we probe a little deeper and learn more about it.

To get back to Commissioner Lehman's train coming down the track, we also, at this phase, want to make sure that when we get there, we don't create a train wreck, if you will, ourselves. So we need your advice, and we need your guidance to the extent that you're comfortable giving it to us.

There is a great deal of concern -- and I understand from your testimony today that you really don't share with us the concern of wearing the hat of DCI and running the CIA. Because we wonder with your enthusiasm, how you can do both.

TENET: Well, I might structure the CIA a bit differently. I might have a different span of control. If I, for example -- if you were going to organize the community around these mission centers, I might have a separate deputy to handle that piece. I might create a new structure for me in terms of inside this organization. There are ways to do this in terms of its reorganization. I can do that without statute, by the way, unless we had a bigger piece.

So I'm not adverse to the idea. I'm saying that there may be structural ways to do this smarter once you think about what end state you want to achieve is all I'm saying.

FIELDING: Well, no, I appreciate that clarification because I had misunderstood.

Now, let me throw you into the pool a little more since we're probing for ideas.

FIELDING: Would it assist you now as DCI and in charge, if you will, of the intelligence community, would it assist you if the FBI's domestic intelligence function was separate from its investigative and its law enforcement and prosecutorial function?

TENET: I don't believe so and I'll tell you why.

First of all, I would say the first thing that's important -- and Bob Mueller will talk about this this afternoon, I'm not going to go into the changes and how he thinks about this -- we've been running operations with the FBI against targets for 30 years.

In terms of their trade craft and how they operate with us and how we jointly recruit people, this is well known, well understood between us. Where he's trying to take the organization is is to put a primacy, particularly in the terrorist arena, put a primacy on the intelligence gathering aspect of it and put the prosecution of it behind. I think he would also argue that prosecutorial power may actually have a benefit in terms of his ability to recruit someone, in terms of an enticement, an enhancement or how you talk to somebody.

But I think that the way to do this is to keep that together and then grow within the FBI a separate kind of officer with a separate kind of training and a separate kind of career path, where the intelligence mission is not divorced from the prosecutorial mission, but is something, you know, you can grow in quite a different way.

I mean, the devil is all in the recruiting, the training, the promotion precepts. And how you reward that individual for the work is really where you're going to make hay here, but I wouldn't separate it.

FIELDING: And you think that the culture is amenable to that in the FBI?

TENET: Well, I know the director's amenable to it and I know the director's working on it. And I think if you look at -- yes, I think the answer's yes.

I think the institution understands that this is absolutely essential.

FIELDING: Thank you.

Let me just ask one other question.

FIELDING: In your March testimony you called al Qaeda a learning organization. And, obviously, we know the DOD has got rigorous lessons-learned projects on everything that they do and it improves their performance. I don't sense that the intelligence community has that kind of a lessons learned across the board.

TENET: Oh, boy.

FIELDING: What steps can you take to accomplish that?

TENET: Sir, I think we do it a bit differently than the defense structure does. I mean, John, you may want to comment on this since you've been around a while (UNINTELLIGIBLE).

MCLAUGHLIN: I think you'll find in the defense structure, as you know, sir, that they have a formalized process. In the intelligence business, because it's so fast moving and so iterative, I would call our lessons-learned process more of an iterative one. We're constantly re-evaluating what we do. We're constantly looking at efforts we've had under way and asking ourselves: Why did that work? Why didn't this work?

So it isn't as formalized. It isn't done by panels. Although on occasion we do commission a group within the agency to step back and look at...

TENET: Or outside. MCLAUGHLIN: ... as, for example, we are on some of our Iraq work now. We're doing for six months an extensive, in-depth look at every single source we used and we are developing lessons from it.

In the terrorism arena, because it's been such a fast-paced fight and really a war -- I think as Cofer Black made the point yesterday, that we've literally been at war on this problem for years -- the lessons learned have been incorporated into our daily activity much the way you do in the middle of a battle, much the way you do on the battlefield.

FIELDING: I understand that. But sometimes memories shape as time passes, and that's the reason I would urge that you reconsider that.

MCLAUGHLIN: I wouldn't suggest to you for a moment that this is perfect or that there aren't things we could do better on this score, but I'm just suggesting that we have a different rhythm and pattern than the military on this.

FIELDING: OK. Thank you.

Thank you both very much.

Thank you, Mr. Chairman.

KEAN: Senator Gorton.

SLADE GORTON, COMMISSION MEMBER: Mr. Tenet, we're here, of course, because of a massive intelligence failure.

GORTON: But you point out at the very beginning of your testimony that there were other challenges facing the United States -- and you list four: China, Taiwan, North Korea, India, Pakistan and the Balkans.

In those cases -- just for balance here -- do you believe that you supplied your two presidents with accurate enough and complete enough intelligence so that they were enabled to make wise policy decisions in those four arenas?

TENET: In each case, I would tell you, for example, the Balkan crisis, obviously, was a different crisis because you were supporting military operations.

Without getting into all the targets here, each of these particular cases, if you separate the conflict, have different gaps in knowledge that we constantly seek to close -- and I don't want to do a net assessment in front of you. So depending on the question, performance is going to be plus or minus. Well, I think we did well. But you know...

GORTON: I wanted to give you an opportunity to answer yes...

TENET: Yes.

GORTON: ... give me a qualified yes.

TENET: Well, I have to be honest because it's not perfect across the board while you're building capability and closing gaps, but...

GORTON: Now I want to go, and I'm going to -- with my limited time, I'm going to ask you three questions in one speech, and I hope you can remember each of them and answer each of them. But they have to deal with the last page of your testimony in which you make five recommendations. And they relate to number 2, number 3, and number 4 -- which I may say editorially seemed to me to be perfect Beltway recommendations.

The rhetoric is impressive, and the actual policy advice is practically zero, at least as far as I'm concerned.

TENET: Well, I wrote them, sir. So I appreciate that.

GORTON: The second of those starts with that wonderful line, "We have created an important paradigm," which scares me at the beginning. But it has to do with the reorganization of the mission of fusing intelligence information and speaks about the Counterterrorist Center and the creation of TTIC.

So the portion of the question is: Do you mean in this statement that we now have a very good structure for this fusion and we simply need to perfect it personally in the way in which you answered a question to the chairman of the commission, or do you think that the structure still needs to be changed in one respect or another?

GORTON: Now, I'm going to finish this, because the light will go off.

(LAUGHTER)

Your number three has to do with this relationship about what you've been asked previously between the DCI and the secretary of defense. And I'd like you to tell me just a little bit more about whether you feel that the present structure is a workable structure, really simply depending on the relationship between the DCI and the secretary of defense, or whether you think that there could significantly be structural changes there but you just don't want to talk to them about them now, because you're getting along pretty well with Rumsfeld and you want to be on the same page when you make such a recommendation.

And then the fourth one really troubles me.

(LAUGHTER)

In the fourth one you say, "The DCI has to have an operational and analytical span of control that allows him or her to inform the president authoritatively about covert action and other very sensitive activities." Does that mean that prior to 9/11 or post-9/11 you do not believe that you could authoritatively advise the president about covert action and sensitive activities? TENET: Let's work backwards. No, the answer, of course, I did. I'm trying to say in a future model. What I don't want you to do is separate those functions from an individual. That's all I'm trying to say to you.

GORTON: OK. So, just let it alone.

TENET: Yes. Create whatever structure you want, just don't separate that span of control because something will break...

GORTON: OK.

TENET: ... that's all I'm trying to tell you.

With regard to the second one, yes, the relationship is absolutely the essential component of what makes this work. The creationship of a structure at the Department of Defense that Don has put in place to build a tactical program and mesh it with a national program is quite substantive and important.

And the other thing I'll say to you is nobody cares more about intelligence than this secretary of defense. Is it in large part a relationship issue? The answer is yes. Can you count on that relationship in the future? The answer is no, so you need to think about it in structural terms.

The first question is, structure is a good one because it's up and running, it's going to mature, and you've got the right principles in place. Now we have to populate it and move it. But it's in the right place.

The most important thing about its success is we need to make sure that the domestic data shows up. That's the most important thing, because unless you have all the data in one place, you can't talk about competitive analysis, you can't talk about red teaming. It all has to be there.

So the most important thing that has to happen is that architecture to ensure that the data shows up. And we need to keep pressure to make sure that happens, otherwise you're going to have a lot of data and no left hand to meet the right hand.

GORTON: Thank you. Those were all precise and enlightening answers.

KEAN: One final question Commissioner Ben-Veniste has asked, and told me he could do it in 30 seconds.

BEN-VENISTE: I never said that.

(LAUGHTER)

But I do have one question, Mr. Director.

First, the commission was provided with the SEIBs, the senior executive intelligence brief, and I want to refer to the one of August 7, 2001. And I want to compare it to the PDBs, and particularly the PDB of August the 6th, 2001.

BEN-VENISTE: Let me just tell you that the information in comparison has deleted from the SEIB, from the sentence, "al Qaeda members, including some who are U.S. citizens, have resided or traveled to the U.S. for years and the group apparently maintains a support structure." The words "that could aid in attacks" doesn't appear in the SEIB nor does the final two paragraphs of the PDB, which contain all of the updated and current information.

Now, the attorney general of the United States testified yesterday that he was out of the loop, did not receive the PDBs, but he did receive the SEIB, as did other Cabinet officials who have responsibility for law enforcement, such as Customs, INS and so forth.

Can you tell us who it was that makes the decision to send material on to the other executives who do not get the PDBs?

MCLAUGHLIN: Commissioner, it's a little difficult to reconstruct all of that looking back. But in talking to people about it, a couple of factors on the table here.

The SEIB was a very new publication at that time. We were still developing the rules for how to do it.

I think the first omission you mentioned I'm guessing was probably an editorial change by someone on the staff who was shortening the article for the SEIB.

The latter changes that you referred to, the rule that we were using at the time was that information we did not have written documentation for -- which in this case, some of that information fell into that category because the analysts had gotten it on the phone from her FBI colleague -- we didn't put in the SEIB unless we had written documentation.

And other information we didn't put in if it had an operational content. That is, there was an ongoing operational matter -- as there was in the case of the call-in in Dubai, where we were aggressively following up trying to find this person.

MCLAUGHLIN: And those are essentially the reasons that we -- sometimes we will also not include information if there's a law enforcement dimension to it that could be affected by disseminating it widely. But a mix of reasons like that was behind it, and the decision is made in our Directorate of Intelligence where these publications are put together.

BEN-VENISTE: Thank you, Mr. Chairman.

KEAN: Thank you, Director Tenet and Director McLaughlin. Thank you again for your cooperation, and thank you for all your help today.

TENET: Thank you.

MCLAUGHLIN: Thanks. DARYN KAGAN, CNN ANCHOR: We've been listening in to CIA director George Tenet as he testifies for a second day in public, under oath, before the 9/11 commission on Capitol Hill. The CIA director talking about the future of intelligence for this country, and saying that it will be another five years, he believes, until the U.S. can get its intelligence system in the exact form that it needs in order to protect this country.

Our national correspondent Bob Franken is covering the hearings on Capitol Hill, and he joins us now with more about what director Tenet had to say.

BOB FRANKEN, CNN CORRESPONDENT: Well, you know, what we've been hearing in the last couple of days, Daryn, is an overriding theme, the Cool Hand Luke theme, that what we've had here is a failure to communicate. We've heard about the FBI and its inability to communicate within its own agency and the rest of government. The staff report that came out today said there was a real failure on the part of the intelligence community to communicate among the various agencies and with intelligence agencies overseas. Problems that need to be fixed. And as you pointed out, Tenet, George Tenet said, it's going to take quite a while.

KAGAN: Bob Franken listening in to those hearings. Those hearings will continue...

(BEGIN VIDEO CLIP)

TENET: First thing I would say to the commission is that the care and nurturing of these capabilities is absolutely essential. It will take us another five years to have the kind of clandestine service our country needs. There is a creative, innovative strategy to get us there that requires sustained commitment, leadership and funding.

(END VIDEO CLIP)

FRANKEN: As the chairman of this commission pointed out, the plans may be long range plans, but the danger is immediate.

(BEGIN VIDEO CLIP)

KEAN: When you tell me -- you said it the second time now. Five years to rebuild. I wonder whether we have five years. And that's what -- when you say five years to rebuild the agency that worries me a little bit.

(END VIDEO CLIP)

FRANKEN: One huge improvement, according to the CIA director, Tenet, is that there is a much better, much more routine communication between his agency and the former rival, the FBI.

Well, we'll find out more about that this afternoon, when the head of the FBI testifies. Robert Mueller, expected later today -- Daryn. KAGAN: And, Bob, question for you. Why George Tenet appearing twice before this panel?

FRANKEN: Well, he of course is one of the keys to this whole story. Intelligence is considered part of the failure, part of what has to be improved. There's also a discussion about coming up with some sort of domestic intelligence agency.

I should point out that both Tenet and we'll find out later Bob Mueller vigorously oppose that.

KAGAN: And we can see the panel behind you taking a break. Actually, we're going to take a cue from them and we're going to do just that. So, Bob, we'll be back with you from Capitol Hill. We're taking a quick break, and we'll be back after this.

(COMMERCIAL BREAK)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


Aired April 14, 2004 - 09:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: George Tenet is in the room here. We have heard him testify under numerous occasions over the past several months. But clearly, this is an opportunity for him to explain what was happening in the days and years prior to 9/11 and how since that time he recommends going forward.
There is George Tenet and now Governor Kean, the commissioner of the 9/11 committee.

THOMAS H. KEAN, COMMISSION CHAIRMAN: Our first witness today is the Honorable George J. Tenet, director of the Central Intelligence Agency. And I notice he's accompanied by the distinguished deputy director, Mr. John McLaughlin.

KEAN: This is Director Tenet's second appearance before us in open public session, and we are very pleased with his help, and pleased again to welcome him.

Director Tenet, will you please rise and raise your right hand?

Mr. McLaughlin also, I guess, if you're going to join him.

Do you swear or affirm to tell the truth, the whole truth and nothing but the truth?

Thank you very much. Please be seated.

Director Tenet, if you'd like to proceed with your opening remarks.

GEORGE J. TENET, DIRECTOR, CIA: Thank you, Mr. Chairman. I welcome the opportunity to be here again.

On March the 24th, I expressed my personal feelings for the loss I felt for the families who lost loved ones. My colleagues at CIA and throughout our intelligence community feel the same sense of loss. That we did not stop these attacks haunts all of us to this day.

And what we're doing here is essential, not only because we have to be open and honest about the past, but also because we have to be clear-minded about the future.

Mr. Chairman, some context. By the mid 1990s, the intelligence community was operating with a significant erosion in resources and people and was unable to keep pace with technological change. When I became DCI, I found a community in the CIA whose dollars were declining and whose expertise was ebbing. We lost close to 25 percent of our people and billions of dollars in capital investment.

The pace of technological change challenged the National Security Agency's ability to keep up with the increasing volume and velocity of modern communications. The infrastructure to recruit, train and sustain officers for our clandestine services, the nation's human intelligence capability, was in disarray.

We were not hiring new analysts, emphasizing the importance of expertise, or giving the analysts the tools they needed. I also found that the threats to the nation had not declined or even stabilized, but had grown more complex and dangerous.

The rebuilding of the intelligence community across the board became my highest priority. We had to invest in the transformation of the National Security Agency to attack modern communications. We had to invest in a future imagery architecture. We had to overhaul our recruitment, training and deployment strategy to rebuild our human intelligence critical to penetrating terrorist cells. And we had to invest in our people.

And while we were rebuilding across the board, we ensured that investments in counterterrorism continued to grow while other priorities either stayed flat or were reduced.

Mr. Chairman, I'm not going to go through what the rest of the world looked like. You understand it.

TENET: Building our overall capabilities would be instrumental in how we positioned ourselves against al Qaeda, its terrorist organizations that represented a worldwide network in 68 countries and operated out of a sanctuary in Afghanistan.

We also needed an integrated operations and collection plan against al Qaeda. We had one.

I have previously testified about the 1999 strategy that we called the plan. The plan required that collection disciplines be integrated to support worldwide collection and disruption and penetration operations inside Afghanistan and other terrorist sanctuaries.

In 1998, after the East Africa bombings, I directed the assistant director of central intelligence for collection to ensure that all elements of intelligence in the community had the right assets focused on the right problem with respect to al Qaeda and bin Laden.

We convened frequent meetings with the most senior collection specialists in the community to develop a comprehensive approach to support the Counterterrorism Center's operations against bin Laden. He told me that, despite progress, we needed a sustained, longer-term effort if the community was to penetrate deeply into the Afghan sanctuary.

We established an integrated community collection cell focused on tracking al Qaeda leaders, identifying their facilities and activities in Afghanistan. The cell, which often met daily, included analysts, operations officers, imagery officers and officers from the National Security Agency. We used these sessions to drive signals and imagery collection against al Qaeda and to build innovative capabilities to target bin Laden and the al Qaeda organization.

We moved to satellite to increase our coverage of Afghanistan. CIA and NSA designed and employed a clandestine collection system inside Afghanistan. The imagery agency intensified its efforts across Afghanistan and more imagery analysts were moved to cover al Qaeda.

The imagery agency gave al Qaeda interest in targets its highest priority in the intense daily competition for overhead imagery resources.

We established an integrated community collection cell that focused on tracking al Qaeda leaders and identifying and characterizing their facilities.

When the Predator began flying in the summer of 2000, we opened it in a fused, all-source environment within the Counterterrorism Center.

TENET: All of this collection recognizes the primacy of human and technical penetration of the al Qaeda leadership and network and the necessity to get inside the sanctuary in Afghanistan. This integration was the context of the plan that we put into place in 1999.

Between 1999 and 2001, our human agent base against the terrorist target grew by over 50 percent. We ran over 70 sources and sub- sources, 25 of whom operated inside of Afghanistan.

We received information from eight separate Afghan tribal networks. We forged strategic relationships consistent with our plan with liaison services that, because of their regional access and profile, could enhance our reach. They ran their own agents into Afghanistan around the world in response to our tasking.

The period of early September 2000 to 2001 was also characterized by an important increase in our unilateral capability. Almost half of these assets and programs in place in Afghanistan were developed in the preceding 18 months.

By September 11th, a map would show that these collection programs and human networks were operating throughout Afghanistan. This array meant that when the military campaigned to topple the Taliban and destroy al Qaeda began in October, we were already on the ground supporting it with a substantial body of data and a large stable of assets.

Mr. Chairman, I've outlined in my statement our analytical product. I don't mean to short shrift it, but I know you want me to stay within 10 minutes. I think that there was depth and clarity across a range of products and a range of venues. I believe that that product got to our policy-makers, including the most senior policy- makers, in many forms. How do I assess our performance? The intelligence that we provided our senior policy-makers about the threat al Qaeda posed, its leadership and its operational span across over 60 countries and the use of Afghanistan as a sanctuary was clear and direct.

TENET: The warning was well understood, even if the timing and method of attacks were not.

The intelligence community had the right strategy and was making the right investments to position itself for the future against al Qaeda. We made good progress across intelligence disciplines. Disruptions, renditions and sensitive collection activities no doubt saved lives. However, we never penetrated the 9/11 plot overseas.

While we positioned ourselves very well with extensive human and technical penetrations to facilitate the take-down of the Afghan sanctuary, we did not discern the specific nature of the plot.

We made mistakes. Our failure to watchlist Hazmi and Mihdhar in a timely manner or the FBI's inability to find them in the narrow window at the time afforded them showed systemic weaknesses and the lack of redundancy.

There were at least four separate terrorist identity databases at the State, CIA, the Department of Defense and the FBI. None were interoperable or broadly accessible. There were dozens of watch lists, many haphazardly maintained. There were legal impediments to cooperation across the continuum of criminal intelligence operations. It was not a secret at all that we understood it, but in truth, all of us took little action to create a common arena of criminal and intelligence data that we could all access.

Most profoundly, we lacked a government-wide capability to integrate foreign and domestic knowledge, data, operations and analysis. Warning is not good enough without the structure to put it into action. We all understood bin Laden's attempt to strike the homeland, but we never translated this knowledge into an effective defense of the country. Doing so would have complicated the terrorist calculation of the difficulty in succeeding in a vast open society that, in effect, was unprotected on September 11th.

During periods of heightened threat, we undertook smart, disciplined actions. But ultimately all of us acknowledge that we did not have the data, the span of control, the redundancy, the fusion or the laws in place to give us the chance to compensate for the mistakes that will always be made in any human endeavor.

TENET: This is not a clinical excuse. Three thousand people died. It was not -- no matter how hard we worked or how desperately we tried, it was not enough. The victims and the families of 9/11 deserve better.

Mr. Chairman, I've gone into changes that have been made to the Terrorist Threat Integration Center, other things that we have done through beginning, during and after 9/11 in terms of the integration of the community. We can talk about those things. I wanted to close just on four or five points about the future of intelligence and issues that you might want to consider as you think ahead to structures you may want to propose.

The first thing I would say is, we've spent an enormous amount of time and energy transforming our collection operational and analytical capabilities. The first thing I would say to the commission is that the care and nurturing of these capabilities is absolutely essential.

It will take us another five years to have the kind of clandestine service our country needs. There is a creative, innovative strategy to get us there that requires sustained commitment, leadership and funding. The same can be said for our other disciplines. Something has to be said about the importance of intelligence and how we look at this discipline for the country quite publicly.

Second, we have created an important paradigm in the way we have made changes in the foreign intelligence and law enforcement communities beginning with the Counterterrorism Center and evolving through the creation of TTIC with the fusion of all-source data in one place against a critical mission area.

This approach could serve as a model for the intelligence community to organize our most critical missions around centers where there's an emphasis on fusion, the flow of data, the fluid integration of analytical and operational capabilities.

Capabilities are important. The organization around missions where those capabilities are fully integrated in whatever structure you want to create I think is the way ahead in the future and that's the way we're moving.

TENET: Third, in the foreign intelligence arena, the most important relationship -- aside from the president -- that a DCI has, is with the secretary of defense. Rather than focus on a zero-sum game of authorities, the focus should be on ensuring that the DCI and the secretary of defense work together on investments tied to mission.

Why? Because together the investments that we make together in accounts that we don't jointly manage I believe have enormous power when they're synchronized, and the secretary of defense and I have been working just to achieve that.

Fourth, the DCI has to have and operational and analytical span of control that allows him or her to inform the president authoritatively about covert action and other sensitive activities.

Finally, our oversight committees should begin a systematic series of hearings to examine the world we will face over the next 20 or 30 years, the operational end state we want to achieve in terms of structure, and the statutory changes that may need to be made to achieve these objectives. And none may be required, but I believe some will be.

I have no doubt others will have other ideas. That completes my opening statement, Mr. Chairman.

KEAN: Thank you very much.

Questioning this morning will be led by Commissioner Kerrey.

BOB KERREY, COMMISSION MEMBER: Director Tenet, first of all, before I get into the questions, I want to say that I think it's five general things that's got to be understood that made the job of being director of central intelligence in the '90s exceptionally difficult.

The first is that -- and we're going to have to deal with it in report that there were significant numbers of Cold War-residual problems that we had to deal with. And I think part of the problem was we were so busy celebrating our victory in the Cold War, we didn't pay attention to Yugoslavia, we didn't pay attention to the trouble that could occur as a consequence in the Middle East, we were struggling to figure out how to deal with transitional problems in the former Soviet Union, et cetera, and, indeed, I think Afghanistan is one of those Cold War-residuals that a lot of us in the 1990s simply weren't paying enough attention to.

Secondly, I do think -- with great respect to your last statement, I do think that you lack authority and have substantial responsibilities that aren't matched up. And the evidence of that is the last time I checked, I think 35 congressional committees call you up from time to time to ask you to testify on a variety of different subjects, which, to say the least, sucks up a lot of your time.

KERREY: Thirdly, absent political leadership, there's nothing you can do. You're providing intelligence; you don't make the decisions.

Fourthly, I think congressional oversight is exceptionally weak, especially on the Senate side.

Fifthly, let me point out, because some of my questions deals with your term prior, that there was a very tough transition. John Deutsch left in December 1996. Tony Lake was nominated; it took forever. I think you were not confirmed until July of 1997. That was a very, very difficult and very risky transition, in my view.

Lastly, let me say that, unlike other DCIs, you probably for the rest of your life will be, like Judge Kevin Thomas Duffy, who was the judge in the World Trade Center cases, the Brjinka (ph) case, you're likely to forever be a target. And in other words, you have taken considerable risk beyond what former DCIs have done. And I want to thank you for that.

That said, let me get into some questions. I want to first talk about the Cole.

A lot of our commissioners have asked questions about the Cole, Director Tenet. It's been raised repeatedly. My own view is that it goes to the heart of our problems of dealing militarily with a significant unconventional military challenge. And what's hard for me to come to grips with today is why, with the evidence that we had, that the attack was al Qaeda, that we were -- and an operative that was connected to the bombing of the embassy in Nairobi, why were we so cautious? And why did both President Clinton and President Bush -- why couldn't they see military alternatives to cruise missiles and basically the Normandy invasion?

It seems to me that our failure to respond militarily, in particular the presidential directive that was put together in 1998 that failed to give the Department of Defense primary authority in dealing with al Qaeda and terrorism, it seems to me that that contributed substantially to our failure to prevent 9/11.

I'll just give you a chance to respond to that because there are several questions tucked in there. But do you think PDD 62 was a mistake? Do you think that we waited too long to respond militarily to an organization that we knew had declared war on us and called to jihad thousands of Islamic men to fight the United States of America?

TENET: Mr. Senator, you've talked to all the policy-makers -- and I'm not going to fudge the question; I'm not the policy-maker. They have to calculate the risks, the geopolitical context, what was going on at the time, the nature of the Pakistani regime, what Central Asia looked like, whether or not force could have been used. I can't make those decisions.

I will say that -- and I've said publicly -- the most important strategic decision that was ultimately made was to take down the sanctuary.

When you took down the sanctuary, your operational opportunities increased, intelligence increased, you put the adversary on the run. It generated an enormous amount of intelligence opportunity that was very helpful.

KERREY: But we heard yesterday that -- Mr. Pickard tell us that bin Laden and the Afghan sanctuary and those camps, he was turning out more individuals than we were turning out either at the CIA or FBI. And yet our military leaders through both the Clinton and the Bush administration will give you all kinds of reasons why the targets weren't sufficient. And yet after we were attacked in 9/11, we deployed this special operations in connection with your individuals that were enormously effective.

It seems to me that we had capability, in short, that either didn't get to the attention of the president -- he didn't know about it -- or for some reason it wasn't used. And it seems to me that it would have had a very negative impact upon al Qaeda's capability of attacking the United States.

TENET: Senator Kerrey, I can't take you beyond that -- my previous answer. These were tough and difficult policy calls that people were making and I'm just going to have to leave it at that.

You've heard from all the policy-makers. They all thought about these issues. They were complicated issues. And I'll leave it at that.

KERREY: Let me get into my second line. And again -- I'm going to focus on a period of time during the transition, so some of this -- your transition, so some of this you're going to have to be answering both for yourself and perhaps for Director Deutsch as well, or whether or not the communication came to you.

But one of the most remarkable things that the staff has uncovered -- and you heard a piece of it in the testimony of the staff statement -- was that Jamal al Fadl comes into court in 2001 and describes what he said when he walked in in 1996.

KERREY: What he said was that al Qaeda was a significant military force. What he said was that Osama bin Laden headed a terrorist organization of his own. He said it was an organization that was far more than a mechanism to raise money for his terrorist financing role. What he said was that this organization was intended to be the foundation for an Islamic army, and it declared the United States as its main enemy long before the public declaration in August of 1996.

What he said was that Osama bin Laden had sent top leaders of its weapons trainers into Somalia to shoot down -- to provide the Somalis with the weapons used to shoot down the U.S. helicopters and train them in how to use them to accomplish exactly they did in October of 1993. What he said was that bin Laden's organization had done the same thing for the Yemeni squad that carried out the attack aimed at the United States troops in Aden less than a year before.

And you heard again in the staff statement, we had a national intelligence assessment in '96, I believe, or '95.

TENET: '95 and '97.

KERREY: And what we got was an update that didn't include any of this. What we got was an update that didn't include the information that this individual says in court that he delivered to us, and he said it was corroborated.

So why? Why wasn't it not in the update? Why didn't the president of the United States and the key policy-makers get this information?

TENET: I'm sure -- well, now you're making the assumption that because it was not in the national intelligence estimate, this data was not broadly disseminated, explained and understood by people at the time, and I believe it was.

JOHN MCLAUGHLIN, DEPUTY DIRECTOR, CIA: I don't recall, Senator, whether that particular individual, in his testimony, was included specifically in the '97 update.

What I do know is that in the staff statement, the staff statement failed to note that in the '97 update we included information that people associated with bin Laden had been surveiling institutions in the United States, and that therefore we concluded the likelihood was growing that he would attack in the United States. That was, I think, the most significant finding in the '97 NIE.

And it was also in this period, 1996, that we formed the bin Laden issue station. So we were very focused on this issue.

TENET: This is a critical issue.

KERREY: I think so.

TENET: No, it's a critical issue. You're making an assumption that because of it's not in a national intelligence estimate that the way we were organized to brief people, pass product out, talk to them about this meant that people weren't getting this kind of data. That's just not true.

KERREY: Well, I'm not making that presumption. I'm making, first of all, the presumption that the NIE is a foundational document that lots of people use and that -- I mean, this is a very specific set of information that he said in trial he provided to us. And we continue to regard bin Laden -- you heard in the staff statement -- we continue to regard him as a relatively small threat.

I didn't know. I didn't know in 1996 or 1997 that bin Laden was responsible for sending forces down into Somalia to shoot down our Black Hawk helicopters. I didn't have a sense that this is what he was doing.

And let me just ask you -- I mean, I know that this is your transitional moment, so -- this is '96 to '97. Did you ever have a conversation with President Clinton where you told him that al Qaeda was a substantial military effort, that they were responsible for shooting down our helicopters in Mogadishu, that there was a substantial military threat to the United States of America, that we ought to ramp this guy up to the top of the list?

TENET: Sir, I will go back and look at my -- I didn't come prepared with what happened in '97. I'll go back and look at my records, look at the data dissemination, go back through the meetings that were held at the time and give you an answer to the question.

KERREY: Director, the reason I think this is central because we have heard -- I mean, I have heard a series of excuses from Sandy Berger, Bill Cohen, Madeleine Albright, Don Rumsfeld, Condoleezza Rice -- all kinds of rationalizations. And one of the things I've heard over and over and over was, "The American public wouldn't have supported any action had we taken action before 9/11."

Now, I've got to tell you, I think if the president of the United States of America had come and said that Osama bin Laden and al Qaeda is responsible for shooting down a Black Hawk helicopter in Mogadishu in 1993, I believe that speech would have galvanized the United States of America against bin Laden and would have prevented -- I think would have given you permission to do operations that you didn't have permission to do; would have changed the whole dynamic.

I mean, I just can't believe that if the president of the United States had said that in 1994, '95, '96 -- I mean, whenever -- you've got the walk-in in '96 -- if he'd have done it in '96 or '97, I just can't believe that public opinion wouldn't have been on his side just like that. Don't you think so?

TENET: Sir, I'll go back and look at it all and come back to you.

MCLAUGHLIN: I might mention, in that connection, since, Senator, you're talking about the extent to which various publications in this period included warnings about bin Laden and also his activities and the role of Afghanistan and so forth, I mention what I had said earlier about the '97 NIE.

In 2001, there was an NIE that I don't think your staff statement mentions about Afghanistan. It included a extensive discussion of the camp structure, the camp architecture, in Afghanistan. It noted that the Cole bombers had trained in those camps. It noted that Ressam, who had been involved in the millennium plot, had been in those camps.

So that's something that was laid out in a national intelligence estimate. And as the director has pointed out, it's a matter of argument whether that galvanizes policy to do something or not.

KERREY: I appreciate -- we heard -- now that we've seen this August 6th presidential daily briefing -- after we've seen that August presidential daily briefing, it was causing me to, sort of, have serious questions about how these daily briefings are organized.

But my guess is, the president has not seen the -- President Bush has not seen the information about who al Qaeda was; that -- my guess is that President Bush today -- he may be discovering it for the first time, that we knew in 1996 that bin Laden was responsible for shooting down helicopters in Mogadishu. You know, and this was in the trial in 2001. And it doesn't appear to me that he was briefed in transition. It doesn't appear to me that that was brought to his attention.

In other words, I think even as late as 2001, we were describing bin Laden as a terrorist, not somebody that had a substantial army and substantial capability and a history that went back long before 1998.

I mean, you -- the president says you meet with him practically every day.

KERREY: Did you bring that presentation to him? Did you describe, as the walk-in did in 1996 -- as he described in the trial in 2001? Did you bring that information to the president and say, "This is an army that's been engaged in an effort against the United States of America all the way back at least until 1993"?

TENET: Well, whether I took it back in '93 or not, sir, I don't recall. But we certainly walked through al Qaeda, its organization, the threat it posed, its previous affiliation with bombings and activities over a concerted period of time.

But I'll go back and look at whether that was specifically raised. I don't recall it. KERREY: I appreciate it. I'm going to do something I shouldn't do, which is yield back my time before my green light -- my red light goes on.

KEAN: First time you've done that, sir.

All right, Commissioner Lehman?

JOHN F. LEHMAN, COMMISSION MEMBER: Thank you.

Director Tenet, I want to join Bob in expressing my real admiration for the job you've done. I mean, you are a very entrepreneurial, gutsy guy who has worked very, very hard on this problem. You were one of the few officials who grasped the threat very early on. And you were responsible, your leadership, for making the agency run faster and jump higher during your tenure. And I admire you for that.

Another one of your virtues is that you're a team player, and I think you have resisted the temptation to join in in recommendations for changes, because you're part of the administration.

But last night, I think things changed a bit, in that the president has now endorsed major reforms, institutional reforms, and I think that frees you up a little more to answer some questions.

First, we've been struck by -- and when I say "we," I mean most of the commissioners and all of the staff -- by a real difference between our interaction with FBI and our interaction with the agency. The bureau, while it's been defending various actions and issues, has fundamentally admitted they're in an agency that is deeply dysfunctional and broken, and make no bones about it.

LEHMAN: Whereas, the attitude we, kind of, get from CIA, institutionally, is that, "Hey, you know, we're the CIA." A kind of a smugness and even arrogance toward deep reform.

I'm not ready for your answer yet, but...

(LAUGHTER)

This is all preamble.

(LAUGHTER)

TENET: I'm warming up, sir.

LEHMAN: Go ahead, you can interrupt if...

TENET: No, sir. You're on a roll.

LEHMAN: But that report that you heard this morning was a damning report. Not of your actions or the actions of any of the really superb and dedicated people that you have, but it was a damning evaluation of a system that is broken, that doesn't function. And all I have to do is reread the PDB which the agency resisted so strongly our declassifying, and the key line is, "We have not been able to corroborate some of the more sensational threat reporting, like the intention of bin Laden to hijack U.S. aircraft."

All the king's horses and all the king's men in CIA could not corroborate what turned out to be true, and told the president of the United States almost a month before the attack that they couldn't corroborate these reports. That's an institutional failure.

And I'm here to tell you, and I'm sure you've heard it before, there is a train coming down the track. There are going to be very real changes made. And you are an invaluable part of helping us come to the right conclusions on that.

So now I have a few questions. First, why shouldn't we have a DCI who worries about the community with the authorities to do that, without having to worry about the day-to-day running of the CIA?

TENET: Can I get a little preamble time myself?

(LAUGHTER)

LEHMAN: As long as it's on his time.

TENET: It's on Senator Kerrey's time.

First of all, I want you to know that I have serious issues with the staff statement as it was written today. I have serious issues about how the DCI's authorities have been used to integrate collection, operations.

When the staff statement says the DCI had no strategic plan to manage the war on terrorism, that's flat wrong. When the staff statement says I had no program strategic direction in place to integrate, correlate data and move data across the community, that's wrong.

I just want to say to you that I would like to come back to the committee and give you my sense of it, at the same time telling you, it ain't perfect. And by no stretch of the imagination am I going to tell you that I've solved all the problems of the community in terms of integrating and in lashing it up. But we've made an enormous amount of progress.

I would tell you also that -- this is the perspective I lived. Nobody else can live what I lived through. I believe that if you separate -- if you separate the DCI from troops, from operators and analysts, I have a concern about his or her effectiveness, his or her connection.

Now, you may want to have a different structure. You may want to have a different CIA, sir, in terms of how you manage it, so there may be some things we can do there. But I wouldn't separate the individual from the institution. You may manage it differently, because I believe that one of the concerns I have is, if you create another layer and another staff between something that's supposed to provide central organization, all-source analysis and operations, we've created another gap and a distance.

So I wouldn't design America's intelligence community 56 years later the way the National Security Act designed it. I would recognize that the key operational principle is not who is in charge of the wire diagrams, but the way data flows, is integrated between analysis and operations. And in the 21st century, technology is your friend, not an enemy, and from a security perspective, it also makes your life easier.

I would be very focused on organizing around missions and ensuring the capabilities were built, but the mission focused and centers drove the way we operated against the things that mattered most to us in terms of the foreign intelligence target.

You can structure on top of that. You can lay anything you want on top of that, sir. But I think that that integration is what's key. And you can figure out the wire diagrams and the authorities any way you want.

TENET: I would tell you that the lesson is, yes, of course, we need more change. Of course.

I think -- you know, if I can tell you if I had made -- if I failed or made a mistake, I've been evolutionary in terms of the community. Maybe I should have been more revolutionary.

I sit back at night and look at a war in Iraq, a war on terrorism, conflict in Afghanistan and all the things I have to do and recognize, you know, no single human being can do all these things. I understand that.

So maybe some structure is required.

But I would also urge the commission -- and I will come back to you formally -- to take a look at some significant things that have happened in the management of the community, of our resources, of our people, of our collection, of our training, of our education because they are building blocks that, quite frankly, I'm proud of.

LEHMAN: Well, I think that you're really making my point. I think that my experience in this town has been, there are only two things that matter in doing management and oversight because everybody makes the same amount of money. You can't give bonuses to people and your hiring and firing is somewhat limited.

You've got the ability to hire and fire the top people if they don't perform and pick the ones that do perform and promote the ones that do perform, and you've got appropriations power. And neither of those things do you have for the responsibilities of cross-community. You've wielded them very well within your agency, but all have you for cross-agency -- cross-community -- is exhortation and the power of your logic, which has been powerful, but not powerful enough against big bureaucracy.

So why shouldn't you -- let's step into my Alice in Wonderland and you've been detached from CIA. You don't have to run it anymore. You are now a DCI who is principally seized of solving the problems that we have identified and you've struggled with for these years.

Why shouldn't you have the power to hire and fire -- more importantly -- the head of NSA, the head of the FBI intelligence section, or a separate MI-5, the head of the CIA, the head of all of the alphabet soup that are really national intelligence assets?

LEHMAN: Why shouldn't you have that?

TENET: Well, let me talk to you about my Alice in Wonderland -- just to talk through this a little bit.

You could do that, sir, but I want to bring back an issue that I think is quite important here.

We need to understand the relationship between the DCI and the secretary of defense in a very, very fundamental way. Why?

You have an organizational structure today that basically has -- three or four of the major organizations are combat support organizations. They provide tactical support to the military as well as support the national intelligence needs.

And somehow in the structure that you create, he must be a partner in designing this framework to ensure that we don't miss -- or don't crack a seam that we're trying to build together -- because he executes tactical and other programs that in effect add to the power of what the DCI can do.

But we have to wrestle with that in some way. So everybody wants to empower this individual with all kinds of powers. And all I'm asking is: Yes, could a DCI be more powerful? Have more executive authority? Execute budgets, joint personnel policies?

You know, the question ultimately is: Is there Goldwater-Nichols framework here that works? Is there some new framework that we have to put in place? All I want to focus on is: Don't throw the baby out with the bath water. Don't miss the capabilities that have to be grown. Don't separate those capabilities from a chain of command that can only execute them and then figure out how that mesh works.

Now, the person you describe probably would survive for about 20 minutes in terms of what's going on in this town. And you probably went a little bit too far, but look -- we have to be open to thinking like this.

I've done it one way. It ain't the perfect way -- and within the structure that I lived in, the power of persuasion and cajoling is absolutely important.

TENET: Because you know at the end of the day you still have to lead. You can have all the authority you want. It may not matter. So it's a little bit more complicated but all of it should be on -- all I'm saying to you commissioners, it should all be on the table.

But before we rush to a judgment don't we want to know what the world's going to look like? Don't we want to understand, with some precision, where do you want to end up? And I think you have to focus on that fusion of capabilities around mission first and foremost, and then decide the rest. It will flow from there. The power of forcing that collaboration in and of itself breaks down the walls.

LEHMAN: Well, I agree that the people and the personalities are the most important of all. But, for instance, no matter how forceful you are, you have been unable -- and no one without the real authority over appropriations could sort out the chaos of our security system, our background investigations, our classification system. No one can do that without power.

The networking -- Goldwater-Nichols is not one of my favorite pieces of legislation, but one of the things that it really achieved, which is a tremendous improvement, is forcing and giving the CINCs the ability to force the ability to the services to work together.

For instance, special operations forces operated off aircraft carriers. They could never do that before because it was an authority that could force the commonality, the protocols, if you will. Like everybody in the commercial world uses the Internet protocols. There are no protocols for the intelligence community for sharing. This is an IT problem. It's a deep, embedded, functional problem throughout the community for common protocols for information.

That is really an issue of appropriations being cut on the Hill or not being allocated within the agencies to do it. We heard testimony from the FBI who wanted to do that kind of thing and still hasn't done it because of the appropriations.

So why shouldn't you, as the new DCI, have that appropriations authority at the top level, not -- one of the bad things about Goldwater-Nichols is it's increased layers of bureaucracy at the center.

LEHMAN: We don't want that.

TENET: No, we don't.

LEHMAN: But the GE, another good company model, where you have a very small powerful staff at the center and execution done in the departments, is the model that is beginning to take shape in our mind. What do you think of that?

TENET: It's a good model, sir.

I mean, the power -- the smaller the staffs, the more power you have over execution, the better off you're going to be at the end of the day. With real metrics and power to move people and data as you need to to achieve better execution is a smart way to think about this discipline for the future. LEHMAN: Now, I said this train is coming down the track. And you used the word revolution rather than evolution. I think that's a perfect way for people to understand this.

You've done a terrific job in the evolutionary change, but it's clearly not been enough. Revolution is coming.

How do you do revolution without losing sight of the business that you're in? You can't take your eye off the ball. Do you think this can be done in a rational way?

TENET: Frankly, my personal view is that you really do need an outside group engagement, recommendations to come forward. I think it's -- people like me and John and people working in the business can certainly inform.

I've got a group now I've put together on revolutionary change in the intelligence community, and ideas that are flowing to me. I think you need something established to come back to you, react to you, push you and prod you and get you out of your skin and your daily responsibilities to get this done in the right way.

I think it's hard when you're sitting -- I mean, the day I retire, I'll be a great person to sit on one of these things, and I'd love to do it.

(LAUGHTER)

But I think that the important thing is, it's very hard for people when they're sitting in the in-box on the crisis of the day to be reflective. And occasionally I have reflective thoughts. It's not often enough to deal with a problem like this.

I think you've got to separate the current group to allow -- we can give you the data, give you our experience and talk to you about it. But I think you almost need a separate group of people who have been around this.

But you also need people who have revolutionary ideas about technology and how it works and a new mindset, because the people you're recruiting aren't 30-year veterans anymore. You're attracting a whole new labor force that doesn't remember the Cold War, and they expect a structure that's going to be more agile and mobile and more technologically proficient.

TENET: So we've got to take this in a different direction.

The only thing -- I have to keep coming back to a point. My worst nightmare is that somebody's going to show up and say, "All that human investment is wrong. All that technical investment is wrong." Where we've positioned ourselves has to be sustained creatively and innovatively, and I think you've got a way ahead in that regard that's quite impressive.

And once people lose sight of where the country needs to be, the starts and fits in cycles that this community has gone through has to stop. Let's get budgeting on a two- or three-year cycle. Let's allow us to build programs in depth. Let's really look at basic expenditures over the course of time. Let's put the metrics in place.

But I'll tell you, you can't build this community in fits and starts. It won't happen and the country will suffer. And you know, this, I think, is a debate that has to be joined quite publicly.

Everybody talks about military capability or law enforcement capability. Well, we sit behind the green door. And for the bang for the buck, the American taxpayer gets a hell of a lot for what we give them. And you know, we ought to find a way to talk to the American people about it as well, because I think they'd be supportive.

LEHMAN: Well, I had the preamble. I guess I ought to let you have the closing paration (ph).

Thank you. That's very helpful.

TENET: Thank you, sir.

KEAN: Thank you.

I just have a couple of questions, if I could.

First of all, I'd like to say in many ways how much I admire you -- how much I admire you in a town that's as polarized as I've ever seen it. You're the only high official who has managed to get the confidence of two presidents, and I think that's very much to your credit, sir.

I'm waiting -- I will wait anxiously. The staff statement is an indictment in many ways of the agency. I await your answer to some of those things in the staff statement.

I also recognize that this is an agency which was devastated earlier by, in many cases, I think mistaken critics in the Congress.

KEAN: Mistaken or otherwise, a lot of good people left. It was very hard to rebuild the agency. You were unable to recruit on most of the good campuses in this country for a number of years.

But when you tell me to -- you said it the second time now, five years to rebuild, I wonder whether we have five years. When you say five years to rebuild the agency, that worries me a little bit.

TENET: Five more years to rebuild the clandestine service.

Well, sir, you know, you have an infrastructure, you have a recruiting framework, you have a quality control, you have a student- to-faculty ratio, and you have a big pipeline. We built all of that in to make sure we can get this done.

Nobody was paying attention to the plumbing. It's not sexy. You got to pay attention to the plumbing.

And the bottom line is, to do this right, to build the platforms and access and cover and technology that we need -- it's budgeted for, the president has recognized it -- it's going to take another five years to build a clandestine service the way the human intelligence capability of this country needs to be run. That is just the fact from my perspective.

We've made an enormous amount of progress in the first five years because we had a plan. We had a rhyme, we had a reason, we had a discipline. And I don't think people appreciate that the way they should.

KEAN: Probably the most important criticism -- one of the most important criticisms made of the whole intelligence apparatus is you don't talk to each other, or haven't in the past, and there's a lack of communication.

I guess specifically I'd like to ask, what actions are being taken now to make sure, for instance, that the FBI's legal attaches and the CIA's station chiefs at least are working in tandem?

TENET: Well, Mr. Chairman, it's interesting.

Back five or six years ago when the FBI first started to go overseas in big numbers, the first thing that Louis Freeh and I sat down and decided was that we were going to start having training conferences and interaction between the chiefs of station and the legates. And it's migrated over the course of time.

And I think if you go overseas and talk to my chief of stations and our legates around the world, you will find an intimacy and an understanding about their responsibilities and roles that is the basis of interaction and communication from senior levels, the way we train and the way we talk to each other.

So I know that there was a lot that wasn't right about communications.

TENET: But I'll tell you, the first thing I did with Director Freeh is every quarter we sat down with the senior management of the FBI and the CIA. Every year, four times, we sat down and looked through common problems and how we could work through them -- operations, investigations, how we could train better and work better together. And that started as soon as I became director.

So now, what we needed and have worked on consistently in doing -- that all has to be migrated down to training and education at the earliest levels of people's career, cross training. We're going to have an FBI special agent come through our clandestine training course for the first time in history in the next running of that course.

It's important, because we need to give them more training and insight about intelligence operations. We went over there and are helping them build their analytical capability. We're trying to help them build their reports cadre.

Their communications architecture is something Bob has to fix himself to ensure that that communication is fulsome across lines. I would also say that the implication of the intelligence community can't talk to each other is wrong. There is architecture, data flow and movement of data across our agencies every single day.

Building that bridge with the law enforcement community, as the Terrorist Threat Integration Center will do when you have FBI case files, our operational files, domestic databases sitting in one place, it's exactly the model that will succeed. But the data has to show up.

KEAN: You are very good at building relationships with your colleagues in government, there's no question about that. But one of your successors might not be.

Whose responsibility, if there's a dispute, for instance, between the two agencies regarding the best strategy, let's say, against a particular enemy and do the people in the field understand how those disputes are resolved?

TENET: Well, the way it operates today, deputy chief of our counterterrorism center is a senior FBI official. There are over 20 FBI officers who sit in my center today. We have officers over there. I've invited the committee to come out to sit through a 5 o'clock meeting.

TENET: We have real operational issues that we put on the table. We have now an American division inside of CTC that basically talks to the bureau about, "How do we best manage this case? What's the data that we seek? What's the operational strategy that we should employ?" And we're fusing that in a very real way.

Now, when the Counterterrorism Center and the Counterterrorism Division and TTIC all go to one building, the image you should have is not, you walk into the building and the CIA goes right, the FBI goes left and TTIC sits on the throne. The image you should have is that Bob and I are going to sit down and figure out what are the integrative structures across those lines that will create the kind of operational fusion we need so that we're fully informed about how best to proceed in a specific case. That's the future of the cooperation.

KEAN: Thank you, sir.

Commissioner Ben-Veniste?

RICHARD BEN-VENISTE, COMMISSION MEMBER: Good morning, Director Tenet.

TENET: Morning, Commissioner.

Let me first say that I have enormous respect for your dedication, and the dedication of CIA officers who I have met, in their desire to complete the mission. The people at Alex (ph) station and that has come out earlier -- that name has come out earlier in these hearings, not by us -- who I have interacted with are heroes and dedicated individuals who I sense died that day on September 11th, in a way that many Americans did, but perhaps more particularly because of their efforts over a long period of time to deal with these committed, brutal, inhuman enemies of the United States.

I want to talk about the PDB briefly.

BEN-VENISTE: I think the individual who produced this PDB and her supervisor are entitled to a debt of gratitude for attempting to bring to the attention of the president of the United States the possibility -- and given all the information we knew -- that despite indications leading to the notion that this incredible threat level that we were experiencing in the summer of 2001 leading to the horrific, dramatic, horrendous -- whatever adjective you want to use because there were many employed -- spectacular attack by bin Laden might well occur in the United States -- to me is extraordinary.

She was prescient. She was right.

The biggest word I saw in the PDB, aside from the title, was the word "nevertheless" leading the second to last paragraph. And that is despite the fact that the information could not have been corroborated regarding the use of the hijacking of airplanes, she said, "Nevertheless, FBI information since that time indicates a pattern of suspicious activity in this country consistent with preparation for hijackings or other forms of attack," and then goes on to talk about FBI efforts.

Now, obviously, she did not get the best information from the FBI, but she got what she could.

We know that the director of the FBI at that time did not get the PDB information and was not contacted, nor was the attorney general at the pulse of the FBI, to get all of the information currently extant.

You had indicated when we last spoke -- and I reminded you of the information sent to our commission by CIA, which was commenting on our staff statement before your testimony which was derived from the statement made to us privately by Dr. Rice who said that this PDB was prepared at the president's request.

BEN-VENISTE: At that time, on March 19th, you said to us, "The author of this piece and others familiar with it say they have no information to suggest that this piece was written in response to a question from the president. We do not know who reported that to the commission, but we do not believe it's accurate. The information we have is that it was prompted by an idea from another CIA employee."

Subsequently, you wrote to us, "The PDB article was in response to a series of events. Throughout the spring and summer the president was shown a number of pieces outlining intelligence indicating that al Qaeda was planning a large attack. During these discussions the president raised questions about whether the intelligence pointed to threats inside the United States.

"Although there was no formal tasking, the president's questions were discussed at a PDB planning session. At that time it was decided to do a piece laying out what we knew about Osama bin Laden's interest in striking inside the United States. When this item was presented in the PDB on August 6th, with Dr. Rice present, the briefer introduced the piece by referring to the president's earlier questions.

"In summary, although the August 6th PDB piece was technically self-initiated, it was prompted by the president's questions and interest."

Now, incidentally, Dr. Rice has testified she was not present.

MCLAUGHLIN (?): She was not present. We were in error.

BEN-VENISTE: OK. Let me talk about the issue of planes as weapons.

KEAN: The gentleman's time has expired.

(LAUGHTER)

BEN-VENISTE: That was a fast 10 minutes.

KEAN: It was quite a preamble.

Do you want to finish your question?

BEN-VENISTE: Yes, I do, if I may.

KEAN: Go ahead and ask your question.

BEN-VENISTE: Let me just follow up on this one area, although I have several.

The G-8 planning -- which I think the G-8 occurred in July of 2001.

BEN-VENISTE: We know that the Italians closed the airspace over Genoa -- and indeed they closed it over Naples for the pre-planning session, and then over Genoa. I don't think that was noise control. I think that had to do more with a threat of the use of airplanes used by suicide pilots.

But even a couple of months before September 11th we know that there was a planning session by NORAD where military officials considered a scenario in which a hijacked foreign commercial airliner flew into the Pentagon -- months before.

And so, people clearly were thinking about this possibility. You had information in August that came from the FBI regarding an Islamic jihadist in the United States named Zacarias Moussaoui, who had been in a flight school in Minnesota and he had been trying to learn to fly a 747 despite the fact that he had absolutely no background in aviation.

He could not explain a bank account of $30,000-odd deposited in cash. He could not explain his presence in the United States. He could not explain why he was trying to learn to fly a 747.

Now, this information came to you via the FBI because the FBI could not -- in their interpretation -- use the information to get a warrant to search Moussaoui's computer, et cetera, under FISA, according to their thinking.

BEN-VENISTE: So they looked to CIA to get that information.

The FISA court protects against improper prosecution, violating laws with respect to the potential of prosecuting this man.

My question is this.

Given the threat level, given the knowledge about planes as weapons, given the fact of Moussaoui's arrest, why was it that you didn't put the question of prosecuting Moussaoui to the side and go after the information which may well have led to unraveling this plot?

TENET: I'd have to go back and look at all -- when we talked in private session, we wanted to come back to Moussaoui. I have not gone back and reviewed all of that data at the time as to why I would make a decision to forego prosecution. That's not a call I could make.

But, Commissioner, I want to go back and prepare and look at all of the things that were on the table at the time. And I'd be happy to sit down with the commission and walk through everything that was happening at the time. And I'm not trying to duck. But we need to sit down and go through this. We said we would when...

(CROSSTALK)

BEN-VENISTE: And I'll tell you parenthetically, the FBI agent was criticized for going directly to the CIA instead of going and running this through headquarters, which would have taken even more time.

LEE H. HAMILTON, COMMISSION VICE CHAIRMAN: Mr. Roemer?

TIMOTHY J. ROEMER, COMMISSION MEMBER: Thank you, Mr. Vice Chairman.

Nice to see you, Mr. Tenet.

I want to just say, on behalf of the commission, that there is probably nobody that we have interviewed that has been as generous with his time and as helpful to the 9/11 commission as you. And we very much appreciate that time and that attention and your expertise.

I want to try to ask as many questions as Mr. Kerrey, Ben-Veniste and Lehman put together in my five minutes and see if you can help me by giving me some short answers, Mr. Tenet.

TENET: Depends on the questions. But go ahead, sir.

ROEMER: Let's see.

In the Woodward book, you say, immediately upon learning of the 9/11 attacks, that it's al Qaeda and you mention somebody in a flight school.

ROEMER: I assume that's Moussaoui. Is that correct? TENET: These are words attributed to me. I don't recall that piece of it, but I know I got up immediately and said, "It's got to be al Qaeda."

ROEMER: And do you have the information at that point on Moussaoui?

TENET: Yes, I was briefed on Moussaoui in late August.

ROEMER: August what?

TENET: I believe it's the 23rd or the 24th.

ROEMER: August 23rd or 24th. Is Mr. Pavitt or Mr. McLaughlin briefed on that as well?

MCLAUGHLIN: Yes, sir. I was briefed, I think, several days before.

The director was out of town. I heard it first in a very abbreviated manner. And then I think the director was briefed in a...

ROEMER: What was the date that you were briefed?

MCLAUGHLIN: I can't recall.

ROEMER: Middle of August? August 15th? Earlier?

MCLAUGHLIN: No, I just don't recall. It was some time in August. It was just a couple of days before the director.

ROEMER: Now, do you all share this information, then, with other people at CTC and FBI and other places? What do you do with this information?

TENET: I believe that the context of the information -- and again, I've got to go back and review all of this carefully.

The context of this information is, is it came to us from one of our domestic field stations, who was asked to provide some assistance in dealing with this FISA request. That's the context it came to us.

And I believe in that time period we immediately tried to undertake a way to figure out how to help the FBI get data and deal with this particular problem. But I'd really want to go back and check records.

ROEMER: With this interesting, curious, fascinating piece of data, do you share this data at the September 4th principals' meeting with other people in the room at that point when you're discussing this policy that has taken seven months to make its way through the process on al Qaeda?

TENET: It wasn't discussed at the principals' meeting since we were having a separate agenda. My assumption at the time was, Mr. Roemer, that this was something that would be laid down in front of the CSG and people working this at the time.

ROEMER: Why would you assume that that would be...

TENET: Because all terrorist...

ROEMER: Why not bring it up to the principals? This is the first principals' meeting in seven months on terrorism. Why wouldn't that be something that you would think would be interesting to this discussion?

TENET: The nature of the discussion we had that morning was on the Predator, how we would fly it, whether we...

ROEMER: But it's an overall policy discussion about al Qaeda and how we fight al Qaeda.

TENET: Well, it just wasn't -- for whatever reason, all I can tell you is just it wasn't the appropriate place. I just can't take you any farther than that.

ROEMER: Would it have made any difference if you had mentioned -- did you ever mention it, for instance, to the president -- your briefing the president from August 6th on?

TENET: I didn't see the president. I was not in briefings with him during this time. He was on vacation. I was here.

ROEMER: You didn't see the president between August 6, 2001, and September 10th?

TENET: Well, no. Before -- saw him after Labor Day, to be sure.

ROEMER: So you saw him September 4th -- at the principals' meeting?

TENET: It was not at principals' meeting.

ROEMER: Well, you don't see him...

TENET: Condoleezza Rice -- Condoleezza -- I saw him in this time frame, to be sure.

ROEMER: OK. I'm just confused. You see him on August 6th with the PDB.

TENET: No, I do not, sir. I'm not there.

ROEMER: OK. You're not -- when do you see him in August?

TENET: I don't believe I do.

ROEMER: You don't see the president of the United States once in the month of August?

TENET: He's in Texas and I'm either here or on leave for some of that time, so I'm not here. ROEMER: So who's briefing him on the PDBs?

TENET: The briefer, himself. We have a presidential briefer.

ROEMER: But you never get on the phone or in any kind of conference with him to talk at this level of high chatter and huge warnings during the spring and summer to talk to him through the whole month of August?

TENET: We talked to him directly throughout the spring and early summer almost every day.

ROEMER: But not in August?

TENET: In this time period, I'm not talking to him, no.

ROEMER: Does he ever say to Dr. Rice or somebody else, "I want to talk to Tenet. Tenet is a guy that knows this situation, has been briefing me all through the spring and the summer. Tenet understands this stuff. His hair's been on fire. He's been worried about this stuff." Is that ever asked? Or are you ever called on to...

TENET: I don't have a recollection of being called, Mr. Roemer. But I'm sure that if I wanted to make a phone call because I had my hair on fire, I would have picked up the phone and talked to the president.

ROEMER: It was just never made.

TENET: No.

ROEMER: Last question and I'll be quick.

On the NSC staff, Mr. Clarke is there for a long period of time. People have various opinions of Mr. Clarke. There's a great deal of turnover on the NSC staff from 2001 on. Is that correct? Mr. Clarke resigns or moves on in 2001, General Downing (ph), General Gordon (ph), Fran Townsend (ph), is that correct, the line up of people? How does that impact your ability to get information and communicate with the CSG, if at all?

TENET: I don't believe that it does because there's a standing structure in place. Somebody else may be running it. But my understanding is it continues to work the way it always has.

ROEMER: Despite the importance of personal relationships, you are one of the best in this town and...

TENET: Well, I don't go to the CSG myself. But I think if we talked to our people, I think our people would say we continue to go to these meetings and impart data.

ROEMER: But you talked extensively with Dick Clarke is my understanding.

TENET: Well, I don't know if extensively is correct. ROEMER: OK. Often?

TENET: Well, I don't know how often in that time period. I mean, there were phone calls, but I can't tell you it was extensive during this time period.

ROEMER: OK. Thank you.

And thank you for helping me with the questions.

TENET: Thank you.

KEAN: Congressman Thompson?

JAMES R. THOMPSON, COMMISSION MEMBER: Mr. Director, I'm going to try one more time on the PDB of August 6th, and then I'm going to stop talking about it. Because sometimes when the PDB is read here or on television stations, it's only sort of half read. So I'd like to read the whole sentence if I can.

On the first page of the PDB, and you'll grant me, I suspect, that almost all of the information in the PDB relates to the period 1998 or 1988, three years before September 11th.

THOMPSON: Is that correct?

TENET: Most of the data is in this time period, and the second page, as you know, is more current data as...

THOMPSON: Right.

TENET: ... the result of the specific walk-in that comes in -- that there is a CSG held on on May 15th through May 16th, and then there's the specific data about surveillance in New York.

So there's -- most of it at the front end is historical in nature, or it's background is what I'd call it -- older data -- and then you flip the page and you get to more current data.

THOMPSON: OK.

Near the bottom of the first page it said al Qaeda members including some who are U.S. citizens have resided in or traveled to the U.S. for years and the group apparently maintains a support structure that could aid attacks.

If we are to credit Tom Pickard's testimony yesterday, the 9/11 plotters in fact did not turn to any group of supporters within the United States to aid their attacks. Is that correct?

TENET: I think to the best of our knowledge that's true.

THOMPSON: OK.

MCLAUGHLIN (?): What the analyst was thinking about there was the fact that some of the defendants in the East Africa bombing trial had resided in the United States at one point in their past.

TENET: Right.

MCLAUGHLIN: So she was connecting dots, if you will.

TENET: Right.

THOMPSON: Last paragraph on that page.

"We have not been able to corroborate some of the more sensational threat reporting such as that from a service in 1998" -- three years earlier -- "saying that bin Laden wanted to hijack a U.S. aircraft to gain the release of Blind Sheik or other U.S.-held extremists."

And that turned out not to have anything to do with September 11th, is that correct?

TENET: And the concept of corroboration of course is, Commissioner Lehman, did you get another piece of HUMINT? Did you get another piece of SIGINT? Is there a walk-in who's come in to tell you the same plots?

So corroboration is just: Do you have more than one source and is it valid? So that's what we meant by corroboration.

THOMPSON: Top of the second page.

"Nevertheless, FBI information" -- so this is something coming to you from the FBI, not your self-generated -- "since that time indicates patterns of suspicious activity in this country consistent with preparations for hijackings or other types of attacks."

THOMPSON: But the only reference here is "including recent surveillance of federal buildings in New York, which turned out to be, according to the FBI, Yemeni tourists."

Is that right?

TENET: That's what we've been told, yes.

THOMPSON: "The FBI is conducting approximately 70 full field investigations throughout the U.S. that it considers bin Laden- related."

FBI testimony here yesterday sort of downplayed the notion that there were 70 full field investigations going on because they said each person being looked at constituted a separate full field investigation, something that was sort of news to us on the panel yesterday.

TENET: I'd have to leave it to the director this afternoon to clarify whether the number is correct or incorrect.

THOMPSON: OK. On page eight of your prepared statement, Mr. Director, you say, "Fourth, the DCI has to have an operational and analytical span of control that allows him or her to inform the president authoritatively about covert action and other very sensitive activities."

What does that mean?

TENET: It means to me that there are a range of activities, the president grants authorities for the director of -- you pick whatever you want him to be -- that I believe that that person has to be intimately tied to the directorate of operations carrying out that covert action and has to have an ability to understand other sensitive collection and other activities with some intimacy to be able to tell the president authoritatively, not only how you're operating, but what the risks are, what the political downsides are.

Somebody has to be responsible and tied to the people who are carrying out those activities is what I meant.

THOMPSON: And we don't have that now?

TENET: No, we do.

THOMPSON: We do?

TENET: You have it in the form of the current DCI.

THOMPSON: You?

TENET: Yes.

THOMPSON: OK. And we should not change that, in your view?

TENET: Well, I think it's something you need to think about quite carefully. I wouldn't.

THOMPSON: OK.

TENET: Again, as I came back, you can restructure the way I'm structured. But I would not take that kind of line authority from a person that has a direct report for the president, who also has a chain of command to the people who are executing these operations.

THOMPSON: Is there any reason why the domestic intelligence functions of the FBI could not be placed under the CIA?

TENET: Lots of good historical reasons, lots of privacy reasons. Just lots of reasons, sir.

TENET: I think that this is not appropriate. I would not want to be in a position where the DCI, given our statutory framework, our laws, our privacy, our history -- I don't think it's appropriate.

THOMPSON: Why is...

KEAN: This is your last question, Commissioner. THOMPSON: Why is privacy more of a concern under the CIA than it would be under the FBI?

TENET: Well, sir, since -- I don't want to be flip about this, since we operate almost extensively in an overseas environment, we operate with a certain degree of impunity with regards to other countries' laws. Since we're operating clandestinely and collecting clandestinely, and we're not going to a judge to tap somebody's -- whatever we're doing, or launching surveillance, it's a different context for us.

THOMPSON: Yes. But you could do what the FBI does now, right?

TENET: Probably not, sir.

THOMPSON: Couldn't. OK.

Thank you, Mr. Director.

TENET: Not with a criminal arrest, legal and other things. That is not something that I think we are competent to undertake in the current structure.

THOMPSON: Thank you, Mr. Chairman.

KEAN: Commissioner Gorelick?

JAMIE S. GORELICK, COMMISSION MEMBER: Thank you, Mr. Chairman.

Mr. Tenet, welcome back. You've given us a great deal of your time and we very much appreciate it.

It's very important, I think, for us to understand your roles as both director of central intelligence and as head of the CIA, both before 9/11 and afterwards. Let me ask you just two sets of questions.

You have gone to great lengths to say to us that you are not a policy-maker. Is that right, that you don't play a policy-making role?

TENET: Yes, that's my belief.

GORELICK: Yet when Dr. Rice was testifying before us about the summer of threat, what she says is that there was indeed an intensity across the government. She says, coming from the top because the president was meeting with the director of central intelligence.

And so my question, just to be very clear about it is, you don't have any authority currently -- and maybe ever, if you have your druthers -- over the FBI, do you?

TENET: No.

GORELICK: And you don't have any authority over the Department of Justice, do you? TENET: No.

GORELICK: Or the FAA, is that correct?

TENET: Correct.

GORELICK: And in fact, although your folks briefed the attorney general, you did not instruct any of these other agencies to do anything after your briefings. Is that correct?

TENET: That's correct. I believe that the data that we provide and the context to the CSG and the structure that informs actions that people are going to take.

GORELICK: Right. So your principal role is to inform and have that information on its own generate whatever activities within their domain.

TENET: Now, from time to time, particularly in the foreign environment, when we're going to deal with a foreign leader, I may cross the line because of my knowledge of the individual or previous conversations, and so you're asked a question in that regard. So I -- you know...

GORELICK: Right. And we know about the role you played in the Middle East peace and so forth and we appreciate that. But in this context, there was nothing emanating -- no operational activities outside of the intelligence domain emanating from your briefings or instructions that you carried?

TENET: I'm sorry. I don't understand the question.

GORELICK: You've answered my question. I want to go on to the policy question.

Looking to the future, you had a very interesting exchange with brother Lehman about what you might or might not be open to advising us to do as a country to restructure the way in which we are organized in the intelligence community, bearing in mind that 80 percent of the intelligence resources now reside outside -- at least 80 percent -- outside your span of control.

Now, in the spring of '01, the president of the United States, much to his credit, asked you in NSPD 5 -- in a presidential order -- to stand up an outside group to look at the structure of the intelligence community. And he asked Brent Scowcroft, the former national security adviser and current head of the president's Foreign Intelligence Advisory Board, to lead that effort.

GORELICK: And that report came in, I believe, in late '01 or maybe at the turn of the year, but not long after 9/11. Brent Scowcroft has briefed us on his recommendations, and, in fact, we now have a copy of his report.

And so I would like to ask you, very specifically if I can, and not to pin you down to definitive proposals, but really to ask you your view on some of these ideas, which were never implemented.

One, he says it's very important to have a separate appropriation that goes directly to the director of central intelligence for the CIA, the NSA, the other offices that currently reside over at the Department of Defense, so that you have the ability to direct that activity. Do you think that is a good idea or a bad idea?

TENET: I'm not certain.

GORELICK: OK, how about that the director of central intelligence have the ability to hire and fire the heads of those agencies?

TENET: Look, let's put all the cards on the table here, OK? I talked about a relationship with the secretary of defense that I really believe in, OK? And, you know, this is the kind of issue he and I have to sit down, sort out, and talk about. And I'll come back and we can talk about it.

I just think, you know, I am sitting in the middle of a structure, I do have a relationship with the secretary, I care about it a great deal, and I haven't reflected on all of these ideas. You have questions, and I just need a bit more time to think about where I am.

GORELICK: I think that's fair enough. And we were all just hoping that since the president had indicated a new openness to change, maybe you were a little more liberated to talk about it now.

GORELICK: And if this is not the right time, we'll be happy to hear from you in whatever way you would like to get back to us.

But we do have some very good work product created by people that...

TENET: I'd be pleased to do that.

GORELICK: ... that do meet the description of an outside group of thoughtful people, and we would very much like your views on it.

TENET: And I would appreciate that.

GORELICK: Thank you very much.

TENET: Thank you.

KEAN: Commissioner Fielding?

FRED F. FIELDING, COMMISSION MEMBER: Thank you, Mr. Chairman.

Director, thank you for coming back.

TENET: Yes, sir.

FIELDING: You know, you've been called an evolutionary. I think we all also appreciate the terrific job that you did candidly as a rehabilitator, which you had to do before you could become an evolutionary. And we're just trying to figure out where the revolutionary phase of this comes in.

But understand that there are criticisms to be leveled and there are a lot of probing questions, and the reason for that is the obvious reason: We've had a terrific intelligence failure, and it gets worse as we probe a little deeper and learn more about it.

To get back to Commissioner Lehman's train coming down the track, we also, at this phase, want to make sure that when we get there, we don't create a train wreck, if you will, ourselves. So we need your advice, and we need your guidance to the extent that you're comfortable giving it to us.

There is a great deal of concern -- and I understand from your testimony today that you really don't share with us the concern of wearing the hat of DCI and running the CIA. Because we wonder with your enthusiasm, how you can do both.

TENET: Well, I might structure the CIA a bit differently. I might have a different span of control. If I, for example -- if you were going to organize the community around these mission centers, I might have a separate deputy to handle that piece. I might create a new structure for me in terms of inside this organization. There are ways to do this in terms of its reorganization. I can do that without statute, by the way, unless we had a bigger piece.

So I'm not adverse to the idea. I'm saying that there may be structural ways to do this smarter once you think about what end state you want to achieve is all I'm saying.

FIELDING: Well, no, I appreciate that clarification because I had misunderstood.

Now, let me throw you into the pool a little more since we're probing for ideas.

FIELDING: Would it assist you now as DCI and in charge, if you will, of the intelligence community, would it assist you if the FBI's domestic intelligence function was separate from its investigative and its law enforcement and prosecutorial function?

TENET: I don't believe so and I'll tell you why.

First of all, I would say the first thing that's important -- and Bob Mueller will talk about this this afternoon, I'm not going to go into the changes and how he thinks about this -- we've been running operations with the FBI against targets for 30 years.

In terms of their trade craft and how they operate with us and how we jointly recruit people, this is well known, well understood between us. Where he's trying to take the organization is is to put a primacy, particularly in the terrorist arena, put a primacy on the intelligence gathering aspect of it and put the prosecution of it behind. I think he would also argue that prosecutorial power may actually have a benefit in terms of his ability to recruit someone, in terms of an enticement, an enhancement or how you talk to somebody.

But I think that the way to do this is to keep that together and then grow within the FBI a separate kind of officer with a separate kind of training and a separate kind of career path, where the intelligence mission is not divorced from the prosecutorial mission, but is something, you know, you can grow in quite a different way.

I mean, the devil is all in the recruiting, the training, the promotion precepts. And how you reward that individual for the work is really where you're going to make hay here, but I wouldn't separate it.

FIELDING: And you think that the culture is amenable to that in the FBI?

TENET: Well, I know the director's amenable to it and I know the director's working on it. And I think if you look at -- yes, I think the answer's yes.

I think the institution understands that this is absolutely essential.

FIELDING: Thank you.

Let me just ask one other question.

FIELDING: In your March testimony you called al Qaeda a learning organization. And, obviously, we know the DOD has got rigorous lessons-learned projects on everything that they do and it improves their performance. I don't sense that the intelligence community has that kind of a lessons learned across the board.

TENET: Oh, boy.

FIELDING: What steps can you take to accomplish that?

TENET: Sir, I think we do it a bit differently than the defense structure does. I mean, John, you may want to comment on this since you've been around a while (UNINTELLIGIBLE).

MCLAUGHLIN: I think you'll find in the defense structure, as you know, sir, that they have a formalized process. In the intelligence business, because it's so fast moving and so iterative, I would call our lessons-learned process more of an iterative one. We're constantly re-evaluating what we do. We're constantly looking at efforts we've had under way and asking ourselves: Why did that work? Why didn't this work?

So it isn't as formalized. It isn't done by panels. Although on occasion we do commission a group within the agency to step back and look at...

TENET: Or outside. MCLAUGHLIN: ... as, for example, we are on some of our Iraq work now. We're doing for six months an extensive, in-depth look at every single source we used and we are developing lessons from it.

In the terrorism arena, because it's been such a fast-paced fight and really a war -- I think as Cofer Black made the point yesterday, that we've literally been at war on this problem for years -- the lessons learned have been incorporated into our daily activity much the way you do in the middle of a battle, much the way you do on the battlefield.

FIELDING: I understand that. But sometimes memories shape as time passes, and that's the reason I would urge that you reconsider that.

MCLAUGHLIN: I wouldn't suggest to you for a moment that this is perfect or that there aren't things we could do better on this score, but I'm just suggesting that we have a different rhythm and pattern than the military on this.

FIELDING: OK. Thank you.

Thank you both very much.

Thank you, Mr. Chairman.

KEAN: Senator Gorton.

SLADE GORTON, COMMISSION MEMBER: Mr. Tenet, we're here, of course, because of a massive intelligence failure.

GORTON: But you point out at the very beginning of your testimony that there were other challenges facing the United States -- and you list four: China, Taiwan, North Korea, India, Pakistan and the Balkans.

In those cases -- just for balance here -- do you believe that you supplied your two presidents with accurate enough and complete enough intelligence so that they were enabled to make wise policy decisions in those four arenas?

TENET: In each case, I would tell you, for example, the Balkan crisis, obviously, was a different crisis because you were supporting military operations.

Without getting into all the targets here, each of these particular cases, if you separate the conflict, have different gaps in knowledge that we constantly seek to close -- and I don't want to do a net assessment in front of you. So depending on the question, performance is going to be plus or minus. Well, I think we did well. But you know...

GORTON: I wanted to give you an opportunity to answer yes...

TENET: Yes.

GORTON: ... give me a qualified yes.

TENET: Well, I have to be honest because it's not perfect across the board while you're building capability and closing gaps, but...

GORTON: Now I want to go, and I'm going to -- with my limited time, I'm going to ask you three questions in one speech, and I hope you can remember each of them and answer each of them. But they have to deal with the last page of your testimony in which you make five recommendations. And they relate to number 2, number 3, and number 4 -- which I may say editorially seemed to me to be perfect Beltway recommendations.

The rhetoric is impressive, and the actual policy advice is practically zero, at least as far as I'm concerned.

TENET: Well, I wrote them, sir. So I appreciate that.

GORTON: The second of those starts with that wonderful line, "We have created an important paradigm," which scares me at the beginning. But it has to do with the reorganization of the mission of fusing intelligence information and speaks about the Counterterrorist Center and the creation of TTIC.

So the portion of the question is: Do you mean in this statement that we now have a very good structure for this fusion and we simply need to perfect it personally in the way in which you answered a question to the chairman of the commission, or do you think that the structure still needs to be changed in one respect or another?

GORTON: Now, I'm going to finish this, because the light will go off.

(LAUGHTER)

Your number three has to do with this relationship about what you've been asked previously between the DCI and the secretary of defense. And I'd like you to tell me just a little bit more about whether you feel that the present structure is a workable structure, really simply depending on the relationship between the DCI and the secretary of defense, or whether you think that there could significantly be structural changes there but you just don't want to talk to them about them now, because you're getting along pretty well with Rumsfeld and you want to be on the same page when you make such a recommendation.

And then the fourth one really troubles me.

(LAUGHTER)

In the fourth one you say, "The DCI has to have an operational and analytical span of control that allows him or her to inform the president authoritatively about covert action and other very sensitive activities." Does that mean that prior to 9/11 or post-9/11 you do not believe that you could authoritatively advise the president about covert action and sensitive activities? TENET: Let's work backwards. No, the answer, of course, I did. I'm trying to say in a future model. What I don't want you to do is separate those functions from an individual. That's all I'm trying to say to you.

GORTON: OK. So, just let it alone.

TENET: Yes. Create whatever structure you want, just don't separate that span of control because something will break...

GORTON: OK.

TENET: ... that's all I'm trying to tell you.

With regard to the second one, yes, the relationship is absolutely the essential component of what makes this work. The creationship of a structure at the Department of Defense that Don has put in place to build a tactical program and mesh it with a national program is quite substantive and important.

And the other thing I'll say to you is nobody cares more about intelligence than this secretary of defense. Is it in large part a relationship issue? The answer is yes. Can you count on that relationship in the future? The answer is no, so you need to think about it in structural terms.

The first question is, structure is a good one because it's up and running, it's going to mature, and you've got the right principles in place. Now we have to populate it and move it. But it's in the right place.

The most important thing about its success is we need to make sure that the domestic data shows up. That's the most important thing, because unless you have all the data in one place, you can't talk about competitive analysis, you can't talk about red teaming. It all has to be there.

So the most important thing that has to happen is that architecture to ensure that the data shows up. And we need to keep pressure to make sure that happens, otherwise you're going to have a lot of data and no left hand to meet the right hand.

GORTON: Thank you. Those were all precise and enlightening answers.

KEAN: One final question Commissioner Ben-Veniste has asked, and told me he could do it in 30 seconds.

BEN-VENISTE: I never said that.

(LAUGHTER)

But I do have one question, Mr. Director.

First, the commission was provided with the SEIBs, the senior executive intelligence brief, and I want to refer to the one of August 7, 2001. And I want to compare it to the PDBs, and particularly the PDB of August the 6th, 2001.

BEN-VENISTE: Let me just tell you that the information in comparison has deleted from the SEIB, from the sentence, "al Qaeda members, including some who are U.S. citizens, have resided or traveled to the U.S. for years and the group apparently maintains a support structure." The words "that could aid in attacks" doesn't appear in the SEIB nor does the final two paragraphs of the PDB, which contain all of the updated and current information.

Now, the attorney general of the United States testified yesterday that he was out of the loop, did not receive the PDBs, but he did receive the SEIB, as did other Cabinet officials who have responsibility for law enforcement, such as Customs, INS and so forth.

Can you tell us who it was that makes the decision to send material on to the other executives who do not get the PDBs?

MCLAUGHLIN: Commissioner, it's a little difficult to reconstruct all of that looking back. But in talking to people about it, a couple of factors on the table here.

The SEIB was a very new publication at that time. We were still developing the rules for how to do it.

I think the first omission you mentioned I'm guessing was probably an editorial change by someone on the staff who was shortening the article for the SEIB.

The latter changes that you referred to, the rule that we were using at the time was that information we did not have written documentation for -- which in this case, some of that information fell into that category because the analysts had gotten it on the phone from her FBI colleague -- we didn't put in the SEIB unless we had written documentation.

And other information we didn't put in if it had an operational content. That is, there was an ongoing operational matter -- as there was in the case of the call-in in Dubai, where we were aggressively following up trying to find this person.

MCLAUGHLIN: And those are essentially the reasons that we -- sometimes we will also not include information if there's a law enforcement dimension to it that could be affected by disseminating it widely. But a mix of reasons like that was behind it, and the decision is made in our Directorate of Intelligence where these publications are put together.

BEN-VENISTE: Thank you, Mr. Chairman.

KEAN: Thank you, Director Tenet and Director McLaughlin. Thank you again for your cooperation, and thank you for all your help today.

TENET: Thank you.

MCLAUGHLIN: Thanks. DARYN KAGAN, CNN ANCHOR: We've been listening in to CIA director George Tenet as he testifies for a second day in public, under oath, before the 9/11 commission on Capitol Hill. The CIA director talking about the future of intelligence for this country, and saying that it will be another five years, he believes, until the U.S. can get its intelligence system in the exact form that it needs in order to protect this country.

Our national correspondent Bob Franken is covering the hearings on Capitol Hill, and he joins us now with more about what director Tenet had to say.

BOB FRANKEN, CNN CORRESPONDENT: Well, you know, what we've been hearing in the last couple of days, Daryn, is an overriding theme, the Cool Hand Luke theme, that what we've had here is a failure to communicate. We've heard about the FBI and its inability to communicate within its own agency and the rest of government. The staff report that came out today said there was a real failure on the part of the intelligence community to communicate among the various agencies and with intelligence agencies overseas. Problems that need to be fixed. And as you pointed out, Tenet, George Tenet said, it's going to take quite a while.

KAGAN: Bob Franken listening in to those hearings. Those hearings will continue...

(BEGIN VIDEO CLIP)

TENET: First thing I would say to the commission is that the care and nurturing of these capabilities is absolutely essential. It will take us another five years to have the kind of clandestine service our country needs. There is a creative, innovative strategy to get us there that requires sustained commitment, leadership and funding.

(END VIDEO CLIP)

FRANKEN: As the chairman of this commission pointed out, the plans may be long range plans, but the danger is immediate.

(BEGIN VIDEO CLIP)

KEAN: When you tell me -- you said it the second time now. Five years to rebuild. I wonder whether we have five years. And that's what -- when you say five years to rebuild the agency that worries me a little bit.

(END VIDEO CLIP)

FRANKEN: One huge improvement, according to the CIA director, Tenet, is that there is a much better, much more routine communication between his agency and the former rival, the FBI.

Well, we'll find out more about that this afternoon, when the head of the FBI testifies. Robert Mueller, expected later today -- Daryn. KAGAN: And, Bob, question for you. Why George Tenet appearing twice before this panel?

FRANKEN: Well, he of course is one of the keys to this whole story. Intelligence is considered part of the failure, part of what has to be improved. There's also a discussion about coming up with some sort of domestic intelligence agency.

I should point out that both Tenet and we'll find out later Bob Mueller vigorously oppose that.

KAGAN: And we can see the panel behind you taking a break. Actually, we're going to take a cue from them and we're going to do just that. So, Bob, we'll be back with you from Capitol Hill. We're taking a quick break, and we'll be back after this.

(COMMERCIAL BREAK)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com