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GESTAPO REDUX: 9-11 Panel To Urge New Domestic Spy Agency

Revolutionary changes in the nation's counterterrorism efforts -- including creation of a new domestic spy agency -- are among ideas receiving serious consideration from members of the commission investigating the Sept. 11 attacks.

The past two days of commission hearings, which ended Wednesday with withering staff reports on the CIA and FBI performance in combatting al Qaeda, show that panel members aren't satisfied with the current structure of the vast U.S. intelligence community but haven't decided what changes to recommend to Congress and President Bush. Their report is due July 26.
Panel may urge a new domestic spy agency

Some members impatient with FBI, CIA

Edward Epstein, Chronicle Washington Bureau
Thursday, April 15, 2004
Page A - 1

Revolutionary changes in the nation's counterterrorism efforts -- including creation of a new domestic spy agency -- are among ideas receiving serious consideration from members of the commission investigating the Sept. 11 attacks.

The past two days of commission hearings, which ended Wednesday with withering staff reports on the CIA and FBI performance in combatting al Qaeda, show that panel members aren't satisfied with the current structure of the vast U.S. intelligence community but haven't decided what changes to recommend to Congress and President Bush. Their report is due July 26.

The idea of a domestic intelligence agency modeled after Britain's MI-5 is highly controversial because it raises fears of threats to civil liberties. The idea is opposed by former Attorney General Janet Reno, former FBI Director Louis Freeh, his successor Robert Mueller, who spoke against it again at Wednesday's hearing, and the American Civil Liberties Union, among others.

Another idea under consideration, one proposed in early 2003 by Sen. Dianne Feinstein, D-Calif., is to create an intelligence czar separate from the director of the Central Intelligence Agency. The new boss would have power over all 14 of the nation's intelligence agencies but wouldn't be in charge of day-to-day operations at any one agency.

"A revolution is coming'' in how intelligence gathering and analysis is organized, commission member John Lehman, a Republican and former Navy secretary, told CIA Director George Tenet during Wednesday's hearing. "Evolution is not enough.''

The report on the CIA's performance released by the bipartisan, 10-member commission says that before Sept. 11, 2001, the agency "labored within -- and was accountable for -- a community of loosely associated agencies and departmental offices that lacked the incentives to cooperate, collaborate and share information. ... As a result, a question remains: 'Who is in charge of intelligence?' ''

Tenet warned during his testimony that it will take at least five more years to rebuild the CIA's spy service, which he said has been decimated by long years without enough money and a reliance on high-tech snooping. "It will take us another five years to have the kind of clandestine service our country needs,'' he said.

The FBI's pre-Sept. 11 performance already had been skewered by the commission. In its reports released Wednesday, the commission praised Mueller's efforts to change the bureau since the terrorist attacks, but said confusion remains as the bureau makes counterterrorism and domestic intelligence gathering a prime focus.

"The FBI's leadership has set in motion an impressive number of potentially significant reforms. We believe the FBI is a stronger counterterrorism agency that it was before 9/11,'' the report says. But it adds, "important structural challenges remain to be addressed.''

The commission chairman, former New Jersey Republican Gov. Thomas Kean, said he remains upset with the FBI's handling of terrorism.

"What I've learned has not reassured me. It has frightened me,'' he said to Mueller, who appeared before the panel Wednesday.

"The reassuring figure in this is you,'' he told the former U.S. attorney in San Francisco who took over at the FBI just a week before the 2001 terrorist attacks on New York and Washington that killed about 3,000 people. "Everyone has great hopes you are going to fix the problems. The decision I have to make as a commissioner is: Are you going to fix it?''

Democratic panel member Timothy Roemer, a former Indiana congressman who served last year on the joint House-Senate inquiry into the Sept. 11 attacks, said his work on the current commission has transformed his view on dividing the FBI into its traditional crime-fighting agency and a new intelligence and analytical operation focused on domestic terrorism.

"I came onto this 9/11 commission very anxious and very, very tenacious about seeing a component taken away from the FBI on this domestic security threat. I no longer feel that way. I'm not sure what the answer is quite yet, '' he said.

But like all the other members who spoke, he lavished praise on Mueller. "I have a great deal of confidence in you personally,'' Roemer added.

Mueller attacked the idea of an MI-5-type agency. "I do believe that creating a separate agency to collect intelligence in the United States would be a grave mistake. Splitting the law enforcement and the intelligence functions would leave both agencies fighting the war on terrorism with one hand tied behind their backs,'' he said.

Mueller, Freeh and Reno also have said they worry that a domestic spy agency could endanger civil liberties.

Under questioning, Tenet also said that even though a recently released Aug. 6, 2001, Presidential Daily Briefing mentioned that al Qaeda might be trying to hijack planes in the United States, he never met personally with Bush in August, 2001 while the president was on vacation at his Crawford, Texas, ranch -- and he didn't mention the possible threat at a Sept. 4 meeting with other top Bush administration national security figures.

After the hearing, however, Tenet's staff disclosed that he was mistaken. Records show that Tenet flew to Texas to brief Bush on Aug. 17, 2001, and briefed the president again on Aug. 31 when Bush returned to Washington, a spokesman for Tenet said.

During the first eight days of September 2001, Tenet briefed Bush at least six times, the spokesman said.

But the CIA's performance in the years leading to the Sept. 11 attacks led Lehman to assail it as "broken'' and call for substantial changes to intelligence gathering.

Tenet said separating the CIA director's role from that of a new national intelligence chief would be a mistake. "I wouldn't separate the individual from the system,'' he said.

Tenet and Mueller have met with Bush almost every morning since the Sept. 11 attacks to brief him on the latest terrorist intelligence.

Spending on counterterrorism has increased sharply, and a host of new cooperative ventures among intelligence agencies have been born in the post- Sept. 11 environment.

These include the new Terrorist Threat Integration Center, in which 124 FBI and CIA employees work side by side to compare overseas and domestic intelligence reports. About 2,600 government officials have access to its work in an effort to make sure that hints of attacks aren't missed as they were before Sept. 11.

Chronicle news services contributed to this report.E-mail Edward Epstein at  eepstein@sfchronicle.com.

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