NATIONAL COMMISSION ON TERRORIST ATTACKS UPON THE UNITED STATES

Public Hearing

Monday, December 8, 2003

253 Russell Senate Office Building
Washington, DC

CHAIRED BY: THOMAS H. KEAN

PANEL I: INTELLIGENCE COLLECTIONS WITHIN THE UNITED STATES;

LARRY D. THOMPSON, SENIOR FELLOW, THE BROOKINGS INSTITUTION, AND FORMER DEPUTY ATTORNEY GENERAL OF THE UNITED STATES;

STEPHEN J. SCHULHOFER, PROFESSOR OF LAW, NEW YORK UNIVERSITY;

PANEL II: PROTECTING PRIVACY, PREVENTING TERRORISM;

JUDITH A. MILLER, PARTNER, WILLIAMS & CONNOLLY, AND FORMER GENERAL COUNSEL, DEPARTMENT OF DEFENSE;

STEWARD A. BAKER, PARTNER, STEPTOE & JOHNSON, AND FORMER GENERAL COUNSEL, NATIONAL SECURITY AGENCY;

MARC ROTENBERG, EXECUTIVE DIRECTOR, ELECTRONIC PRIVACY INFORMATION CENTER;

PANEL III: PREVENTIVE DETENTION: USE OF IMMIGRATION LAWS AND ENEMY COMBATANT DESIGNATIONS TO COMBAT TERRORISM;

JAN TING, PROFESSOR OF LAW, TEMPLE UNIVERSITY BEASLEY SCHOOL OF LAW, AND FORMER ASSISTANT COMMISSIONER FOR REFUGEES, ASYLUM AND PAROLE, IMMIGRATION AND NATURALIZATION SERVICE;

KHALED MEDHAT ABOU EL FADL, VISITING PROFESSOR, YALE LAW SCHOOL, AND PROFESSOR, DISTINGUISHED FELLOW IN ISLAMIC LAW, UCLA SCHOOL OF LAW;

DAVID MARTIN, WARNER-BOOKER DISTINGUISHED PROFESSOR OF INTERNATIONAL LAW, UNIVERSITY OF VIRGINIA LAW SCHOOL, AND FORMER GENERAL COUNSEL, IMMIGRATION AND NATURALIZATION SERVICE;

PANEL IV: GOVERNMENT ORGANIZATION AND DOMESTIC INTELLIGENCE;

WILLIAM P. BARR, EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL, VERIZON COMMUNICATIONS, AND FORMER ATTORNEY GENERAL OF THE UNITED STATES;

JOHN J. HAMRE, PRESIDENT AND CHIEF EXECUTIVE OFFICER, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES, AND FORMER DEPUTY SECRETARY OF DEFENSE;

JOHN MACGAFFIN, DIRECTOR, AKE LLC, AND FORMER ASSOCIATE DEPUTY DIRECTOR FOR OPERATIONS, CENTRAL INTELLIGENCE AGENCY

THOMAS H. KEAN: As Chairman of the National Commission on Terrorist Attacks Upon the United States, I'd like to convene our sixth public hearing. We've taken as the topic of today's hearing, "Security and Liberty." I guess its very title suggests the myriad of issues we'll be examining today. In one or more respects, all deal with civil liberties, how they can be preserved while our nation seeks to enhance the security of its people in the aftermath of the most heinous attacks ever launched against our country by a band of international terrorists.

In some respects, a debate that continues to surround the PATRIOT Act, use of immigration laws and other measures is not terribly surprising. Historians that are either with us in the audience today or watching us on television would remind us that questions not unlike those we'll be hearing today have come up each time our nation has gone to war. Legal scholars can cite an impressive stack of case law that grew out of them. They can also cite some obvious infractions of civil liberties, the suspension of habeas corpus, the interment of Japanese citizens. These are things our society as a whole grew to regret.

At the same time, as my colleague Lee Hamilton, Vice Chair, has reminded us, the unprecedented nature of the attacks on September 11th produced a strong response. We want to know more about that response, how well current policies are working, and what steps are needed to protect our cherished liberties as well as to protect our nation. We've assembled four distinguished panels to help us do that.

The focus of the first will be intelligence collection within the United States. The theme of the second panel will be privacy protection and how this can be achieved while discouraging and preventing terrorism. These need not be incompatible goals. Our commissioners are particularly eager to hear what our guests have to say as to how we as a nation can achieve both goals simultaneously.

Our third panel will examine what is going under the heading of preventive detention. In particular, witnesses will assess how immigration laws and enemy combatant designations have been used in this war against terrorism. In addition to making recommendations on all of these important issues, the Commission has been charged to consider whether the domestic intelligence function should remain within the FBI. As we proceed with our investigation, we'll be asking ourselves whether the FBI should perform this role or whether a new entity should be established to perform collection, analysis and dissemination of intelligence within the United States, primarily to prevent, curtail and combat terrorism.

As you know, opinions differ widely on this. In our recent hearing, we heard some of these different views from three universally acknowledged experts in this field and we'll do so again today with our final panel.

Before we begin, just to do a small amount of housekeeping, we are operating today under a very, very tight schedule. We'll be hearing from a dozen witnesses. In order to be fair to each of them, I'm going to give appropriate attention to the concerns they raise and allow for free-flowing discussion. I ask each of our panelists to abide by the five minute timeframe that we've imposed. I request also that they reserve additional comments they care to make hopefully for the question period. They may also submit additional materials to the record, which we'll hold open for an additional 10 days.

In exchange for our panelists' advance cooperation, I hope we can ask our commissioners to keep our questions short and to the point and to keep their eyes on the clock as well. Upon the conclusion of today's hearing, Congressman Hamilton and I will be available, as always, for questions.

We will now hear from our first panel, offering their views on intelligence collection within the United States, Larry Thompson, senior follow, the Brookings Institute, and former deputy attorney general of the United States, and Steven J. Schulhofer, professor of law, New York University. If we could begin with Mr. Thompson.

LARRY D. THOMPSON: Thank you. Good morning. Thank you for asking me to appear before the Commission this morning. As the Chairman has said, I'll try to abide by the five minute limitation. I have prepared written testimony but this morning what I would like to do is briefly highlight three points that I made in my written testimony and then expand a bit with respect to one of the points.

The subject of this morning's panel is intelligence collection. Intelligence collection is, however, as I point out in my written testimony, only the first step that we need to be concerned about in combating terrorism. Once you collect information, Mr. Chairman, you need to share it and disseminate it. Those are very important steps that we need to take. Now, even before the horrific events of September 11, I witnessed first hand, as the deputy attorney general, some of the problems that we in the department had with sharing information, even in the department, sharing information with intelligence officials on one hand of the FBI and with our prosecutors on the other hand in the Criminal Division and in at least the Southern District of New York U.S. Attorney's Office.

And these problems caused me on August the 6th of 2001 to write a memo to the head of the FBI, to the head of the Criminal Division and the head of our Office of Intelligence and Policy Review, OIPR. And I reminded these gentlemen of the need for the FBI intelligence officials to notify the Department's prosecutors as soon as possible of the existence of the possibility of federal criminal law violations during the course of an intelligence or counterterrorism investigation. And, Mr. Chairman, we still had problems with that issue up to the horrific events of 9/11.

Now, with the help of Congress, we in this country have made great strides toward getting more tools and resources in our efforts to combat terrorism. Many of the new resources or tools are embodied in laws, especially, as the Chairman mentioned, the PATRIOT Act. I'd like to just mention one provision of the PATRIOT Act this morning, highlight one provision that I think is extremely important, and that is section 218. Section 218 of the PATRIOT Act has allowed the FBI and the Department of Justice prosecutors to expand the nature of the investigation of terrorist activity, especially as it relates to electronic surveillance activities and search activities.

As you know, section 218 provides that FISA investigations, investigations under the Foreign Intelligence Surveillance Act, can be utilized when foreign intelligence is a significant purpose of the investigation, as opposed to the old primary purpose of the investigation. This is a very important distinction and this is a very important provision.

I would like to point out to the Commission this morning that section 218 of the PATRIOT Act, as well as 15 other provisions of the PATRIOT Act will sunset, cease to be in effect, as of December, I believe, 31, 2005. December 2005 at least. We cannot afford to let these important provisions of the PATRIOT Act sunset without, I think, further reasonable, dispassionate and informed discussion as a country as to how important these provisions are to our anti-terrorism efforts.

I mentioned in my written testimony three ideas that I believe we can focus on that can help us in our fight against terrorism, but this morning briefly I would like to focus and highlight one of them. We need to clarify the scope of some of the court opinions as it relates to the statute dealing with the material support of terrorism. This statute has been an invaluable tool in our war against terrorism and it works.

Let me quote to you, members of the Commission, a conversation that was unsealed in court recently that was between Mr. Jeffrey Battle, an individual in Portland, Oregon who was accused of participating in terrorist activity and an FBI informant. And Mr. Battle explained why his terrorism activities were not working as well as he thought he could be, and let me quote to you what he said. "Because we don't have support. Everybody's scared to give up money to help us. You know what I'm saying? Because that law that Bush wrote about, you know, supporting terrorism, whatever, the whole thing. Everybody's scared. He made a law that says, for instance, if I left out of the country and I fought, right, but I wasn't able to afford a ticket but you bought my plane ticket, you gave me the money to do it. By me going and me fighting and doing that they can, by this new law, they can come and take you and put you in jail."

So the terrorists are getting the message. This is a very important statute, it needs to be clarified. Representative Mark Green of Wisconsin has introduced legislation to do this and I would hope that the Commission would review this and study it and support that proposed legislation.

I hope -- I've tried to -- I hope I've had fidelity to my promise to stick to five minutes, and after the professor's testimony I would be pleased to try to answer any questions that the members of the Commission might have.

MR. KEAN: Thank you very much.

Dr. Schulhofer.

STEPHEN J. SCHULHOFER: Mr. Chairman, thank you very much. Commissioners, thank you for this opportunity to contribute to your work. I want to stress first that the legal issues are far less important than the public generally thinks.

After 9/11, legal experts quickly concluded that we needed to strengthen the government's intelligence gathering authority, that we needed to shift the balance, as the saying goes, shift the balance between liberty and security. But legal rules are largely irrelevant at the stages where our intelligence problems have been the greatest, and that includes sharing information, as Larry Thompson just said, coordination, translation, analysis and delivery. Even at the initial stage of gathering the intelligence, our capabilities are largely determined by agency culture, by technical and human resources. Again, all areas where our deficits have been enormous.

So under these circumstances, the preoccupation with questions with legal authority can be misleading and dangerous. Obviously the legal problems should be corrected. My point isn't to question their relevance, but we have to keep our priorities straight. The really grave weaknesses of our intelligence process can't be fixed by passing more laws. But if we focus so much on legal issues, as we have repeatedly since 9/11, we're inevitably going to be diverted from problems that matter much, much more.

Now, looking specifically to the situation pre-9/11, the government's legal authority was strong. There were imperfections, but the record is clear that the legal imperfections were not to blame for the failure to prevent the attacks. We had severe human budgetary and organizational deficits that prevented our law enforcement and intelligence communities from using their legal powers effectively. The Moussaoui fiasco in August of '01 was a particularly clear example of that. And there's no reason to believe that additional legal authority would have been used to any greater advantage.

For example, DOJ documents make clear that at least by April of 2000, April of 2000, department officials were aware of a pattern of FBI legal mistakes, and specifically FISA mistakes by the UBL Unit. It's not clear what efforts were made to correct those deficiencies, either in the last half of 2000 or in the first half of 2001, but whatever the explanation, it's clear that by the summer of '01, we had many bright red warning lights flashing, clear, at least in retrospect. And it's our deficiencies in organization, in resources and in priorities that cost us whatever chances we might have had to abort the plot.

Now, turning to the future, I've developed several ideas in my written testimony but I'd like to focus quickly on five conclusions. First, overall, the government currently has sufficient legal tools but it remains sorely lacking in the non-legal capabilities needed to deploy these tools effectively. Second, more than a dozen legal initiatives since 9/11 are demonstrably not justified as a response to September 11. They impair privacy and they impair freedom, but they are completely irrelevant to fighting terrorism. Examples include parts of the new sneak and peak search powers and major parts of the new FISA powers, because these parts are available for use in investigations that are completely unrelated to terrorism.

Now, thirdly, many of the new powers are relevant to fighting terrorism, but they are so over-broad that they actually undermine our security. Steps have been taken to restrict public information, to restrict access to the courts, and to reduce judicial oversight of searches and surveillance. The common thread that runs through these measures is the erosion, and in many instances, the complete obliteration of traditional checks and balances, reducing accountability to the courts, to the public, to the press and even to Congress.

Now, when I've just said that, that might sound a bit critical, so I want to be clear that this is simply a description, and I think an uncontroversial description of what has gone on. The Justice Department acknowledges this and the Justice Department has publicly defended these steps as appropriate and necessary in our present circumstances. But the absence of effective systems of accountability is a recipe for wasted effort, misdirected resources and bad mistakes. Does not help our security.

Fourthly, our security depends on building confidence around the world that America exercises its power with restraint and with respect for the rule of law, but our present policies of secrecy and unchecked law enforcement power are fueling alienation and mistrust. So we're purchasing short-term gains and usually slender gains at best. We're purchasing them at the price of fostering lasting animosity among the very people here and abroad whose help we need most if we are to break the cycle of terrorist violence.

An example is the so-called enemy combatants' power, and I gather that you have a section to focus on that. But this is particularly central to the idea of accountability. The Administration's claim of power to seize a U.S. citizen here in the United States and hold the person indefinitely with no access to the courts or even to his own family, no other democratic country, including Israel, who has at least as serious problems as our own -- no other country would detain an alleged enemy combatant for as long as 18 days, much less for the 18 months that Jose Padilla has been held incommunicado.

Finally, to maximize our security and to preserve fundamental freedoms, we have to act quickly in two areas that I would urge you to focus on. First, we must restore effective checks and balances. Secondly, we have to make the commitment to provide a substantial infusion of resources. We need resources to support the intelligence process, we need resources to facilitate accountability, and we need resources to protect soft targets on the ground. Without protective measures, too many of our high priority targets will be vulnerable, no matter how good our intelligence may be.

One lesson of the two most recent attacks in Saudi Arabia is that even with unlimited government powers of surveillance and interrogation, those powers aren't much help if important targets are not well-protected. On both of those occasions, intelligence officials warned that an attack was imminent, but without adequate defense on the ground, the plot succeeded anyway. So here at home we are nowhere near what's needed to protect key targets like ports, chemical plants and our major weapons facilities.

Now, doing what's needed in those areas will be expensive, but if we're willing to pay that price, we can be reasonably safe and reasonably free. If we're not willing to pay that price, we cannot be safe, no matter how much of our liberty we're willing to surrender. Thank you.

MR. KEAN: Thank you very much, Doctor.

Commissioner Fielding.

FRED F. FIELDING: Thank you. How's that? Thank you all very much for your testimony. The purpose of this hearing today and the theme of it, if you will, is security and liberty. And I would first like to thank you for your contribution to that debate. This is obviously something that's one of the most important deliberations that we're going to have to deal with. And also while I'm at the thanking, thank you both for your years of public service and for your contributions to not only the profession of the law but also for the administration of justice. We're all very grateful that you're here, we're sorry that Professor Heymann can't be here. I had a series of questions I was curious to hear him in the debate on his book, but we'll perhaps have that for another day.

It's the juxtaposition of the concepts of security and liberty that are the major focus today and while we ponder which recommendations for future actions we have to take and what we want to recommend to the leaders of the nation and to the citizens of this country. And I hope it goes without saying that when we focus on the horrible acts of 9/11 that we must be careful that our anger doesn't lead us to overreaction and that our fear of future plots doesn't cloud our judgment as to the measures that are really necessary to protect and prevent any such future acts of terrorism. We must be aware and we have to all collectively, both witnesses and us, be sure that our recommendations to provide security are consistent with the need to balance and preserve the elements of liberty, which are really the bulwark of our governmental system. It would be horrible if we don't do that, and then the terrorists would have a second victory that would be far beyond their wildest notions of success.

So with that in mind, I've got a few questions I'd like to ask you. You know, at the end of the day our job is to make recommendations, and in trying to formulate this, it's why we are so grateful that you're all here. I've got a few areas of questioning that I'd like to pursue, and then in deference to time, I will turn it over to my colleague, Tim Roemer, and I must tell you that also my other colleagues all have questions they'd like to ask you. So I'll proceed with just a few.

I'd like to start with you, Larry Thompson, just because you had just discussed changing the law and maybe refining or -- the value of redefinition of the law under the PATRIOT Act. I think, as I recall, there's a recent Ninth Circuit decision on this, but there had been some concern about the application of material support law, especially to individuals who contribute to organizations and are unaware that the money may be used or has been used for terrorist activities. And I would really appreciate any guidance you can give us to as to whether you think this is a significant problem, and if so, how we might be able to rectify it. And, Professor, I'd like you to also comment on that as well.

MR. THOMPSON: Yes, Mr. Fielding, you referenced the Ninth Circuit case, and if I can recall that case held that certain parts of the material support statute were unconstitutionally vague, especially as it related to providing one's own services, one's own persona, if you will, to participating in, for example, a terrorist training camp. And the legislation that I referenced in my written testimony, my written statement, and what I mentioned briefly this morning would clarify that to make it clear that if you go and participate in a terrorist training camp and an activity that clearly provides material support to terrorism -- to your point about the need to make certain that we do not change the fundamental character of this country as we deal with terrorism, as we -- as Congress has passed more laws to give the government better tools to fight terrorism, I agree with that.

And with respect to the PATRIOT Act, I recall reading just recently some comments by Senator Dianne Feinstein in which she said there's been a great deal of concern and angst and misinformation about the PATRIOT Act. She said that she called the ACLU's office and asked the ACLU to provide her of any instance of an abuse by the Department of Justice of the PATRIOT Act as it has been recently passed and implemented by the Department of Justice. And the ACLU told her they were not aware of any abuse, any instance of the law being misapplied. And the point I'm making here is that the important electronic surveillance and search provisions of the PATRIOT Act are subject to judicial review, they're subject to judicial scrutiny. And no lawyer will sacrifice or jeopardize his or her career by making false statements and affidavits in support of search warrants, in support of applications for electronic review. I think that's very important and I think it's needed. But the point is, that with respect to the PATRIOT Act, I believe that there has been a great deal of misinformation.

The Act has not been discussed in the dispassionate and reasonable and informed manner that I think it's needed to be discussed. But most importantly is that some very important provisions of that act, especially section 218 which has allowed the government to expand its coverage of suspected terrorist activity, subject to judicial approval. That provision is going to sunset and I think it would be a terrible mistake to allow that provision to sunset.

MR. FIELDING: Thank you.

Professor?

MR. SCHULHOFER: Thank you. First of all, specifically on the material support statute, I think that no one questions the importance of cutting off material support to terrorist organizations. The problem arises when people who may have inadvertently given material support find themselves at the bottom of a ton of bricks because, having given material support, they're treated like the first assistant to Osama bin Laden and facing a sentence of life imprisonment.

So what we need to do with the material support statute is to be sure that these very, very severe penalties are targeted and limited by law to people who have knowingly given material support and that people who have inadvertently given material support are either subject to very modest penalties or, I believe in the case of protected First Amendment activities, should not be subject to any penalties at all.

The flow of the money can be cut off by the government itself in targeting those charities which have a mixture of terrorist and legitimate activity. The government can target that without treating the inadvertent contributors as the worst criminals that are out there. That would be number one. Now, I do have a number of disagreements with my good colleague here, and it may be that I disagree with the ACLU because I do think there are some significant problems with the PATRIOT Act.

Number one, I think it's true that we're not aware of much because so much secrecy surrounds the way that PATRIOT Act provisions have been applied. So I would have to say as well that many of the things concern me. I can't give you specific example because the Justice Department has not told us and has not told the congressional oversight committees either how many of these provisions are being applied. An example -- something that was an example was section 215 which gives the Justice Department access to business records and non-business records, including records, membership records of religious organizations -- library borrowing records has been the one that's been most controversial. There's been a big hullabaloo about that and the Justice Department for many months refused to say how often it was being used. Finally they revealed that it had not been used at all.

Well, so I guess one could say that it's not an abuse, but I think the fact that it hasn't been used for more than two years suggests that it's not so necessary and that the chilling effect a provision like that inevitably has probably outweighs the benefits. More broadly, and I may be going beyond your question and reflecting the comments of my good friend here, more broadly I believe that there are -- number one, there are instances where we have to balance. I think it's quite true that there are instances where there is a trade off, where we may, at least from one perspective, be sacrificing enormously important liberties for the very long term. This is a war likely to last for much longer than any other. Sacrificing very central liberties for a very tangential, speculative game. That is balancing.

More often it seems to me the choice is simply a false choice. That we don't necessarily need to give up liberty to get security. And in fact I think the assumption itself is very misleading, because I think the public tends to assume that if we are giving up liberty, then we're getting security. People take that for granted and because that so often that isn't the case, it's an assumption that's actually quite dangerous. I think it's understandable that people have these intuitions, and I think it's understandable they have the preference to be secure at any price. I myself live and work in lower Manhattan, and I feel that intuition, I believe, as strongly as anyone. But most often it's a false choice.

I think an example, just to give one, accountability measures have been a source of great frustration to the Justice Department because they take time, they take paperwork, they're a distraction, or they appear to be a distraction. And the Justice Department has often said we need to simplify and short circuit these checks and balances so that our agents can devote themselves to investigative work on the ground. But the solution to that is not to sacrifice the rule of law so that we can free our personnel for field work -- that's the seeming dilemma between liberty and security. But the simple solution is simply to provide sufficient resources so that we have enough agents and enough time to allow for accountability.

Israel, for example, faces at least as serious threats and at least as severe resource constraints as we do. But very recently their supreme court confronted exactly this issue and they said that a shortage of personnel doesn't justify curtailing checks and balances. What they said was when there are emergency conditions that demand a large scale deployment of security forces, then by the same token, the government has to devote comparable effort and resources to preserving accountability.

So that would be one of, I believe, many examples where this choice becomes a false choice. And I think protecting soft targets would be another example of where we can be both free and secure if we're willing to devote resources.

MR. FIELDING: Thank you very much. I trust that the headline tomorrow will not be that you disagree with the ACLU. But in regard to the PATRIOT Act, this is obviously something that we're going to have to deal with in some way in our report. And it's also very clear that this is a very volatile issue and one that's subject to extreme debate. I would really appreciate your comments, both of your comments, as to how we should address this. I know that Mr. Thompson -- I believe about a month ago you made a suggestion in a speech that maybe there should be a commission appointed to review this. I guess we all have our views on commissions these days, but that certainly would be one alternative. But as we address this, we would appreciate your guidance as to how we should address it.

We obviously can't be in a position where the Commission votes six to four to repeal 218 and seven to three to do something. So we need a mechanism. So could I draw upon your experiences and your judgment on that, please?

MR. THOMPSON: That's a very important question and it's one that I'm struggling with as I am now a private citizen and am out of government and have to interact with fellow citizens about what the country is doing in responding to the terrorist attacks and talking about the PATRIOT Act. And the one thing that is frustrating, and the professor mentioned accountability. I don't know how more accountable the Department of Justice lawyers and FBI agents can be other than under oath signing affidavits that there is probable cause to conduct a search, that there is probable cause to believe that an individual's engaged in an international terrorist activity and therefore obtaining an application for electronic surveillance under the FISA statute.

I don't know what additional accountability you can have. That's the traditional way to be accountable in our criminal justice system. That's the way prosecutors and agents have been accountable to society for years. But the point is, we have a great deal of suspicion out there about the PATRIOT Act, we have a great deal of, I think, misinformation. And, Mr. Fielding, what I think is critically important, and what I hope this commission would give us advice and counsel on, is that we cannot as a country allow at least some of the very important provisions of the PATRIOT Act to sunset without a greater, more reasoned, less political and more informed discussion as to why we need them in our war against terrorism.

And I agree with the professor, I do think that we have to have a national consensus, if you will, as to what the government is doing, and people need to be comfortable that we're going to pursue -- the government is going to pursue its important public safety and national security measures in a fair and impartial way. That's important. But what is happening with respect to the PATRIOT Act and the debate that we're having I'm very frustrated about because it's a debate that's permeated with a lot of misinformation, sometimes false information. And I did suggest that we have a commission of legal scholars, practitioners in the national security and criminal enforcement area to study the provisions of the PATRIOT Act that are going to sunset. And if we're going to have something like that, it probably would be better not to have it in 2004 or it would be subject to some of the political considerations that are obvious. But it needs to be ready to go after the election so that Congress can get the benefit of a dispassionate, reasoned and informed advice as to the efficacy of some of the provisions of the PATRIOT Act.

Again, I personally would support all of the provisions that are scheduled to be sunsetted to continue, but I think that's something that we need to look at very carefully. And certainly provisions like 218 that are so important to our anti-terrorism efforts, cannot afford to be allowed to sunset without the kind of discussion that I'm talking about.

MR. FIELDING: Thank you.

Professor?

MR. SCHULHOFER: Yes. I think on this subject there's probably far more agreement than disagreement between the two of us. Number one, I think it would be wonderful if we could take that debate out of politics or at least to a lesser -- turn down the political temperature on that debate. And if a commission or a panel, perhaps delegated by the judiciary committees of the Congress, to develop a report would be a way of perhaps lowering the political temperature a little bit, I think it would be very constructive.

On this I agree completely. There's an enormous amount of misinformation. I think the issue has been overly politicized on both sides. The ACLU, I think, has exaggerated some of the problems. I think on the other side the Justice Department has, to some extent, exaggerated the benefits. I'm surprised when, for example, the changes -- proposed legislation to -- under the national security letters. There is an important need there to expand the definition of what is a financial institution for purposes of national security letters, and bring that up to date, that's fine. But that proposal was announced by the President of the United States in a major address. That seems to me, surprising. I don't understand why something of that technical nature should be elevated to the level of a politically salient kind of issue. This is where I think we could all benefit by lowering the tone a bit.

There is misinformation, but I would highlight on the substance. First of all, there are many provisions of the PATRIOT Act that give the Justice Department powers to be used in investigations that are entirely unrelated to terrorism. And the Justice Department's report on the PATRIOT Act actually acknowledges this and brags about it. I guess you could say identifies a number of investigations including an extortion inquiry, a gambling, a narcotics inquiry, where new PATRIOT Act powers were used in a conventional criminal investigation. Now, maybe there's a case to be made for that, but if there is we should take it out of the debate about terrorism and make the case a free-standing case on its own terms why the sneak-and-peek search powers and several of these other powers should be used for conventional law enforcement.

With respect to section 218, I agree that some change in the wall and some change in the significant purpose requirement is appropriate for terrorism investigations. I do not agree that those changes are appropriate for conventional criminal law enforcement, and the fact is that the PATRIOT Act expansion of FISA powers is now available to the Justice Department for any criminal investigation. In fact, when the primary purpose is to investigate prostitution in New Orleans, or gambling in Montana, the FISA provisions can be used as long as the very broad conception of foreign intelligence -- which as I believe the commission knows, covers a very large waterfront unrelated to terrorism and even unrelated to hostile foreign powers, those are there. So that's an example.

Larry Thompson, I think appropriately, suggested that we should try to be specific about where more accountability would be appropriate. Without extending my answer I would just give a couple of examples because I think it's fair to want to be concrete about that. The National Security Letters of course involve affidavits but they bypass the courts. A number of the administrative subpoena provisions bypass the courts, the demands for documentary evidence under FISA have much more limited judicial oversight than we would conventionally require outside of the foreign intelligence area.

So anything that's FISA is much less accountability. There's some accountability, but it's much less than we would traditionally require. FISA is exceptional. It's an exception to our normal regime, and we should do it where it's appropriate but not -- but we should be careful about whether it is appropriate or not, because that's a dilution. And the last one I would mention that's not a PATRIOT Act example, but the enemy combatants again, there is no accountability there. None, absolutely none.

The concept of the rule of law disappears completely if you accept the Administration's position that they can seize a U.S. citizen right here in the United States, and that by the President's determination that the person is an enemy combatant cuts off all access to the courts, to the press, to counsel, to anything whatsoever. That is a substitution of the judgment of one person -- to be sure it's our commander and chief, but it is nonetheless, it's the judgment of one person without any outside accountability. That's one I think that sorely needs to be rectified.

MR. FIELDING: Okay, thank you. Let me just ask one final question of both of you, and I'm going to switch gears and you can put your prepared text down, because you have expertise in this area. One of the major problems that we're going to have to decide at the end of the day is whether we should recommend a change in our domestic intelligence gathering. Some of the concepts have been to have an MI5 type of an entity or something like that. If you could each give us your views on that succinctly, I'd appreciate it.

Mr. Thompson?

MR. THOMPSON: Yes, Mr. Fielding, I think it would be a terrible mistake to create a separate domestic intelligence agency, if you will, if I understood your question, to indicate that that's what you proposed to do?

MR. FIELDING: That's correct, thank you.

MR. THOMPSON: And I explained more reasons more fully in the written statement that I prepared, but what we have here in terms of how we are going to deal with terrorist activity in this country, and this is a response too to something that the professor said, is that you need to have an integration of your intelligence investigative activity, your counterterrorism investigative activity with your prosecutors. They need to be talking to each other. You cannot have FBI counterterrorism agents pursuing an investigation, not talking to the prosecutors and not knowing what available criminal statutes, and they do not have to be the material support statute, it may be some other kind of statute.

But what kind of available criminal statutes are out there that when the decision is made that this person has gone too far and that we've exhausted our intelligence capabilities, we need to take him off the streets? And what we were having before is that because of lots of reasons, and because of lots of walls, there was no integration or there was not enough integration in our efforts. And so our counterterrorism agents were not talking to our prosecutors sometimes because they were trying to hide information improperly, sometimes because they were afraid to do so, and you need to have this integration.

We need to have section 218 help bring the walls down. I would respectfully submit that the creation of a new agency would bring the walls back up. I visited the United Kingdom and I've talked to officials at MI5. They have a much different legal system and what has developed over there is appropriate for their system. There are only 40 some-odd different law enforcement agencies for the MI5 to deal with here. We have thousands of different agencies. The FBI is undertaking a restructuring that I think is going a long way toward emphasizing intelligence, emphasizing greater analytical support, so I would say it would be a big mistake to do that.

MR. FIELDING: Thank you.

Professor?

MR. SCHULHOFER: Yes. On this subject, I'm afraid, I have more questions than answers. I find it a very, very difficult and troubling issue. I agree that we have to be very careful not to create more walls and more barriers. Most of the barriers are cultural and organizational rather than legal. And nonetheless, if you create a different agency, you run the risk of exactly what Larry Thompson just described. The problem, I think, with the FBI is that because it has had a traditional law enforcement focus, its orientation and training and perspective on problems is different from the intelligence gathering function.

FBI agents are excellent at building a provable case and sensitivity to evidence that will be admissible in court. It's a different perspective and I'm not sure whether we can turn that ship around and create a new culture within the FBI. There are also, I think, bureaucratic imperatives here in Washington that, even if we knew what the ideal solution was, I'm not sure that we could get the sufficient political momentum to get people on board for it. One of the proposals that I've seen which I think has some attractiveness is to create within the FBI an intelligence function whose director would report more or less directly to -- either to the DCI or to some individual that would have a more proactive role in integrating intelligence.

But in other words, you could have housed within the FBI -- thereby addressing some of the bureaucratic momentum -- but housed within the FBI an organization that would have a different culture training recruitment and perspective that would have more of the quick, creative, imaginative, proactive kind of culture that I think you need for an intelligence agency. But with that said, I'm I think as puzzled about this problem as anyone else.

MR. FIELDING: Thank you both, gentlemen.

Mr. Chairman.

MR. KEAN: Congressman Roemer?

REP. TIMOTHY J. ROEMER (D-IN): Thank you, Mr. Chairman.

Thank you, Mr. Commissioner Fielding, for warming up our two distinguished guests today on this cold, frigid day in Washington. I know Professor Heymann couldn't make it because of, they say, two or three feet of snow we hear from our friends up in Boston and New England. It might have been four feet of snow. It gets bigger and bigger all the time, but we certainly appreciate both of you being here today. I want to follow up right away on one of Fred's questions and push Mr. Thompson a little bit harder here.

Mr. Thompson, it might be said by critics of the FBI's performance prior to 9/11 that to sustain an intelligence gathering system that was devised back in 1947 with the separation of domestic and foreign gathering resources and this bright line, that that is no longer sustainable in a 9/11 world with the terrorism we have. Professor Schulhofer has just indicated that he might -- well, he's got a lot of questions, like we all do. He might be open to something being put into the Department of -- to the FBI.

Let me throw three things, options out at you and you tell me what you'd be more in favor of, but give me a couple more specific reasons why. The current status quo, creating something within the Department of FBI to help us gather this domestic intelligence information and create this better handoff without the stovepipes or something within the Department of Justice. Again, trying to bring down the wall, trying to expand our capabilities to keep up with technology, trying to make sure that the PATRIOT Act reflects some of these challenges and opportunities but certainly not going back to the status quo that we've had for the last 56 years.

MR. THOMPSON: Congressman, I agree that we shouldn't stay at the status quo. That's unacceptable. Thinking about what you said, I believe based on my experience in dealing with these issues that we should proceed along the second alternative and I know before I left that's what Director Mueller was doing with a sense of great urgency. I know that there was created within the FBI an Office of Intelligence that reported to the assistant head of the FBI for Counterterrorism and that person now is an individual who has an intelligence background which I think is terrific.

There has been more effort being put in to recruiting and training analysts, and that's something that we need to do. We need to continue to consider how we can create a career track for people within the FBI who are going to specialize in intelligence collection, who are going to specialize in analytical studies. So those are all the things that we need to be doing better. I think we're on the track to doing that. But on the other hand, I think we need to continue to make certain that the FBI and other organizations are working very closely together. We have stood up the TTIC, the Terrorist Threat Integration Center. I think that goes a long way toward doing some of the things that are so important, that are needed with respect to how we deal with terrorism.

I have 30 years of law practice, and almost all that 30 years has been either as a prosecutor or as a defense lawyer, and as a defense lawyer I know how important it is to maintain the balance that Mr. Fielding was talking about with respect to our important civil liberties. And while the FBI has made some mistakes in that area over the years, by and large the thousands of men and women who are their special agents are trained to deal within the four corners of the Fourth Amendment, for example. They're trained to deal with legal issues. Many of our intelligence officials do not have that kind of training, and maybe they shouldn't have that kind of training with respect to what's required in intelligence.

You need to be creative. But I think in terms of dealing with the domestic issues that the professor pointed out, dealing with the domestic issues as it relates to our counterterrorism efforts, it's very important to have an organization like the FBI that's been trained to deal within the confines of a wall. In addition, it's very important to have an organization like the FBI that has this network of informants throughout the country who are bad guys and who know a lot about what's going on in their respective communities, and that in itself is a valuable repository for intelligence information, and just one other final point.

We need to have this integration because there's a lot that can be done in the prevention area when you can leverage the possibility of a long prison sentence because someone has violated the wall with cooperation, and with that cooperation you're going to get the kind of intelligence if the person was engaged in terrorism activities that we need.

REP. ROEMER: Thank you.

Dr. Schulhofer, did you have anything you wanted to add subsequent to Mr. Thompson's answer there to your first one?

MR. SCHULHOFER: Well, let me just try to be brief because I think I agree very largely with what he said. I think integration of this function is crucial. We have an enormous problem in this country because we have, I believe I saw a figure, 38,000 law enforcement agencies in this country. It's not like Britain or France or any other country, so even at the federal level we're just scratching the surface of the necessary integration that you need with the NYPD and thousands of other police departments.

I think the Terrorist Threat Integration Center -- TTIC, is it? I'd wondered how that one was pronounced -- is a beginning, but my understanding is that the way TTIC is structured, there is not a government official who has budgetary authority and agenda setting authority over that. It's a working group among a number of big heavy hitters with nobody in charge, so I think it's a step in the right direction but it doesn't really integrate as much. It doesn't integrate, and we need something of that nature which really is integrated and that you maybe need to have someone like -- above the director of central intelligence who's in charge of the counterterrorism function.

Lastly, I would just say that I'm delighted we're talking about this, and part of my concern was that all the debate about the PATRIOT Act, as important as it is, has been diverting attention from things like this which are so much more difficult and so much more important. They don't get the public attention of library borrowing and things like that, but this is really where the action is, and it's part of the reason why I kind of bristle when I hear talk about the PATRIOT Act because yes or no, whether the issues are right or wrong, they're really not the ones that we should be most concerned to talk about.

REP. ROEMER: Let me now follow up on a question that goes directly to the heart and soul of our mandate on this 9/11 Commission, and that is what happened prior to 9/11? We're supposed to write the definitive accounting of the terrorist action and the government's activities leading up to September 11th as well, and I think from your book, professor, The Enemy Within, a Century Foundation report, you bring up this resources question over and over again that you believe that the need for additional resources might even be greater than the need for additional legal authorities and battling terrorism, and we have Mr. Thompson here from the Justice Department.

I want to put out a quote from your book and have you both respond to it if you would. Quote, "Yet on September 10th, in a political environment that gave high priority to shrinking the government, Attorney General Ashcroft rejected an FBI request for an additional $58 million to fund a strengthening of its counterterrorism effort." Unquote. We have a Department of Justice, former Department of Justice official here that might be able to shed some light on that accusation from Professor Schulhofer.

Mr. Thompson, do you have any recollection of that request for a $58 million increase in the counterterrorism budget? And then we'll have Professor Schulhofer tell us a little bit more about his perspective on that.

MR. THOMPSON: My recollection, Congressman, is that that took place in the give and take of developing a budget, and there's a process, and Commissioner Gorelick is well aware of this process of a component coming in with a certain request for funds, and leadership in the Department of Justice for negotiating with that component for the right level of funding but as I recall, and this is just my present recollection, is I recall that September 10th situation evolved in the context in the developing of the Department's budget.

I think what's more important, though, is that following the attacks of September 11th, the Department's budget for counterterrorism efforts increased dramatically as well as the FBI's budget for counterterrorism, so I think you should look -- we should focus more on what happened in terms of what happened to the budget after 9/11 and when the budget was finalized. But one other point and that is this: Those of us who've been involved in federal law enforcement for a number of years have been concerned about the fact that federal law enforcement resources have traditionally been stretched thin and have been stretched thin as we ebb and flow in terms of the various social and law enforcement priorities we've had in this country.

In the '80s, when I was in the Department of Justice, there was a great desire to push the FBI into drug enforcement. There have been other times where the FBI's been pushed into more violent crime areas, there have been times that it's been pushed into public corruption. And we're going to continue to have to deal with the fact that not only the FBI but all of federal law enforcement has limited resources and we have to be very smart with respect to how we're going to deploy those. And I think right now we've deployed them in a way that focuses on the fact that terrorism is our number one law enforcement priority. I think that Director Mueller has done a great job in deploying those resources to deal with terrorism. And I agree with the professor that we will need to continue to look at resources and to make certain that our law enforcement officials have adequate resources to do the job.

REP. ROEMER: Thank you, Mr. Thompson. As a supporter when I was in Congress of the Balanced Budget Act, I fully support the proposition that we don't have unlimited resources and we have to make tough decisions and not go into deficit spending.

Professor, you say that the FBI could have used this for analytical capabilities, more available personnel, better computer quality, translation capabilities, $58 million prior to September 10th. Would that have been helpful, and in your response, why was that proposal rejected?

MR. SCHULHOFER: Well, first of all, I'd like to be clear just in case there is anyone listening who might misunderstand my point. I certainly do not think the result would have been different the following morning if the attorney general had made the other decision. That particular decision by the attorney general did not contribute in any way. What I do think is that the decision was symptomatic of an attitude that pervaded the Justice Department during the first nine months of the Bush administration and I believe it also pervaded the Justice Department in the previous administration. An attitude that was both -- consisted of very limited, very thin, very widely stretched resources and the wrong set -- what we can see in retrospect at least, a tragically inaccurate set of priorities.

Now the second one has been fixed. It was fixed within hours after September 11. We don't have to worry any more about people not paying attention. But the problem of inadequate resources, in my judgment, has not been fixed. I would say, by the way, that I would want to acknowledge, as Larry Thompson said, that immediately after September 11 there was a dramatic increase in Justice Department resources. In fact, I was looking for this and I found it, I thank you for referring to my book and I thought I'd hold it up for you again --

(Laughter.)

(Cross talk.)

MR. SCHULHOFER: It is not for profit and not for royalties, but it is out there. On page one of my book I mentioned the dramatic increase in resources that has occurred since September 11, that was on page one. But I still -- I do believe that we need to do a great deal more. And I hear mixed messages. In part I was glad to hear Larry Thompson say that we need to keep looking at it but I also heard, I believe, a sense that we have to accept the fact that resources are going to be limited and that we have to make choices. I don't accept it.

Of course to some degree they're always going to be limited, but I don't accept the fact that we're at the right baseline now. I don't think we are either in terms of the Justice Department itself or in terms of the Department of Homeland Security, which has the main mission of trying to address the soft targets. And if you read the DHS strategy document for protection of critical infrastructure, and it's something I would -- I realize it's not part of our panel, but in my mind, you can't separate the civil liberties issues from the alternative ways of buying security. And if the Commission takes a good look at that strategy document, as I would encourage you to do, I believe you'll see that there are no real priorities, there are no real choices made.

REP. ROEMER: Absolutely, Professor. Let me stop you there because I do want to get a couple more questions in. We did look at this critical infrastructure report last month, prior to the set of hearings. And there is a drastic paucity of the Administration, both the previous Administration, the current Administration and the legislative branch's inability to make these priorities, whether they be toward border issues, container issues, nuclear power plants, chemical plants and assess what has been made safer since 2001. We don't have that kind of qualitative measurement right now in place.

Let me go back to something that Fred brought up a couple of minutes ago but I don't think we got to the bottom of. And that's this issue of administrative subpoenas. The President has said to Congress that they need to pass a statute that would give the FBI this administrative subpoena power in anti-terrorism investigations. The FBI, as you both know, already has this power of issuing the National Security Letters.

I think most Americans don't know much about these national security letters. They know a lot about the ability under section 215 to possibly go and get library records, but they don't know in a FBI field office, in any city in the country, that the FBI can write internally in that field office, in Indianapolis, Indiana, my home state, a National Security Letter. It doesn't need approval from anybody other than the special agent in charge in that office in Indianapolis. I don't think that there is judicial review of that procedure. That can entail telephone records of an individual -- maybe more Americans are concerned about their telephone records and the security and sensitivity of those than they are about what they're reading at the library, I don't know. That might be a case for debate.

Let me ask the question to you, do you believe that the existing National Security Letter authority is inadequate? And that the FBI does need this additional administrative subpoena power and why? Mr. Thompson?

MR. THOMPSON: Yes, Congressman. There have been instances in which the national security letters have proven inadequate to get the requested information, to obtain the requested information in a timely manner. And that's what's important here, getting information in a timely manner. And that's why --

REP. ROEMER: Mr. Thompson, just be specific to me. In terms of timely manner, I outlined how quickly a National Security Letter can go through a field office. The agent writes it, he only has to go to the supervised special agent in charge, can happen in my understanding, pretty quickly. Why is timing something that would be important to you in this instance?

MR. THOMPSON: The resistance of the person who is, excuse me -- because of the objection, if you will, of the person who is to provide the information and --

REP. ROEMER: The objection of the --

MR. THOMPSON: The recipient.

REP. ROEMER: The recipient, and in this case, the telephone company? Or whoever.

MR. THOMPSON: Whoever, correct.

REP. ROEMER: My understanding is the telephone company hands this over pretty quickly.

MR. THOMPSON: I'm just giving you my recollection as to why the administrative subpoenas are needed. And it makes no sense why the FBI cannot have an administrative subpoena for a -- to conduct investigations as it relates to terrorism when it does have that authority in any number of other areas. For example, it has that authority to use administrative subpoenas in healthcare fraud investigations.

And again, getting back to what you and the professor mentioned with respect to safeguards and accountability, as you know, an administrative subpoena, while it is believed that that administrative subpoena in certain situations would enable the FBI to get information in a more rapid manner, important information quicker, these subpoenas are not self-executing and if the recipient objects, they are subject to challenge in court. It makes -- it just seems to me, as someone who looked at this in my previous position that it makes no sense for the FBI and law enforcement not to have that arrow in its quiver with respect to the tools that are available to conduct terrorism investigations when it has that authority in a whole variety of areas. I don't recall the number but there were multiple areas in which federal law enforcement agencies have the ability to utilize administrative subpoenas, and it simply makes no sense not to have that available to conduct terrorism investigations.

REP. ROEMER: So who would approve the issuance of this, Mr. Thompson, the administrative subpoena? And how do we prevent against -- how do we make sure there are safeguards so that these are not abused?

MR. THOMPSON: Well, typically the way they are dealt with in non-terrorism matters is that the FBI works hand-in-hand with an assistant United States attorney and the administrative subpoenas are issued.

REP. ROEMER: Professor, you argue again in your book -- I won't mention the name since you've already got plenty of publicity on it. On page 30 you talk about, and I quote, "There has been an expansion of the government access to private information with little intelligence value and enlarge its powers to investigate offenses entirely unrelated to terrorism." Unquote. You talk about financial records, educational records, personnel files, e-mail. Can you be a little bit more specific about how you would approach this issue of National Security Letters in the administrative subpoenas, checks and balances here and whether or not we need those?

MR. SCHULHOFER: Right. I think that national security letters, as your question implied, have far fewer safeguards. They don't have zero because there does have to be a certain amount of paperwork, but they have far fewer safeguards than we normally require for the subpoena of personal records held by a third party. Normally, the person who's concerned, the owner of the records or the person to whom the records relate, would have the opportunity to object to the subpoena and to question its relevance, and the national security letter short-circuits that process and, in fact, it typically prohibits the holder of the records from notifying the person concerned that the records have been subpoenaed and turned over to the government. There are circumstances --

REP. ROEMER: And, Professor, can you be clear on that then? Can you emphasize -- so in a -- state that again. In an instance where you're trying to get this information under the National Security Letter and you go specifically to the telephone company to request an individual's telephone records, the telephone company does not have to inform that individual, that American citizen, that they have cooperated with the FBI and released those personal records. Is that correct?

MR. SCHULHOFER: That's correct. I believe that even --

REP. ROEMER: And any other case they do have to inform the individual. Is that correct?

MR. SCHULHOFER: I believe it's even worse than that. It's not simply that they don't have to inform the person, they're prohibited by law from informing them.

REP. ROEMER: And what's the penalty in these different cases? Is there a penalty on the telephone company?

MR. SCHULHOFER: Yes. I don't believe I could tell you accurately exactly what the penalty is, but I think the telephone companies and banks and so on understand that they're under severe penalties for violating that requirement. And there are cases when urgency is a factor and it should be respected, just as any exigent circumstances in many other law enforcement contexts. The problem here is that we take the possibility of exigent circumstances as a justification for greatly reducing accountability checks, even when there is no urgency. So that's something that could be addressed.

I do think that FISA, the FISA structure poses a problem, because there are a limited number of FISA judges. The number has been expanded since 9/11 but it's still a relatively limited number, compared to the district judges that sit around the country. And it's my belief, although this is -- I believe this may be classified information, I don't know, I don't have access to it, but my impression is that the FISA court is centralized, sits in Washington. And if that's true, then there is a problem for an agent in Indianapolis to proceed in a timely fashion with a request if it has to go through the FISA court and it has to get bumped up to Washington. That is a problem. But it seems to me that's a problem in cases of exigent circumstances, and it doesn't justify obliterating checks and balances for those cases that don't require it.

Now, having --

REP. ROEMER: Let me stop you for a second because I'm running out of time. Do you have any idea of how many times the FBI has used the National Security Letter since 9/11 --

MR. SCHULHOFER: I don't --

REP. ROEMER: -- across the country?

MR. SCHULHOFER: I don't. I --

REP. ROEMER: Do they tell -- does the FBI or Justice Department tell us how many times they've used it? Mr. Thompson, would you know that or --

MR. THOMPSON: I don't know what information has been provided to the Commission but I'm almost certain, Congressman, that that information has been provided to the intelligence committees, part of the oversight function.

MR. SCHULHOFER: If I could just add one detail here. First of all, I believe that the expanded National Security Letter authority was enacted within the last month or so by Congress. And part of that enactment appears in the congressional record as a complaint by the intelligence committees that they were not provided information by the Justice Department, and they expressed their understanding that with this -- or their hope that with this expanded authority, that the Justice Department would be more forthcoming.

I do agree that the definition of financial institution needs to be updated, but nonetheless, part of what's been lumped in there, for example, is access to credit card information, which in my judgment, is much broader than the situation really calls for.

REP. ROEMER: Final question, Mr. Thompson, Professor Schulhofer. Again, I very much appreciate your insights. I wish you could spend a lot more time with us. You might not want to but we certainly have benefited from all your advice and counsel here. A national identification card, would you support it, not support it, have a great deal of concern about it, caveat about it? Mr. Thompson?

MR. THOMPSON: I haven't thought a great deal about that, Congressman, so I may want to punt.

REP. ROEMER: Well, I'll try to catch your punt if you will respond in writing at some point and let me know your thoughts on it.

MR. THOMPSON: I would like to just elaborate a little bit about your last question, and that is, under the guidelines --

REP. ROEMER: Can I still get your written response --

MR. THOMPSON: You can still get my written response.

REP. ROEMER: Thank you very much.

MR. THOMPSON: But I think it's important to point this out is that under the guidelines that we develop for FBI agents in this area, it's very important to note that these kinds of investigations and these kinds of inquiries that you're talking about with respect to the national security letters cannot be undertaken except for a legitimate counterterrorism investigation for the purpose of detecting terrorist activity. Now, can an FBI agent or can an office short-circuit that? Human nature says that sometimes rules are going to be broken. But if they are broken, there are severe professional consequences for that kind of thing.

So we have guidelines and we have to rely on the professionalism of the overwhelming majority of our law enforcement officials, and they do not undertake these kinds of inquiries lightly and they do not undertake them to get information about activity that's otherwise protected by the Constitution or by other laws.

REP. ROEMER: Mr. Thompson, very well stated. I wouldn't disagree with anything. My questions have just been targeted at when they've done it, and let's say they'd done it in Indianapolis a dozen times, how do we have any kind of judicial review over making sure they don't abuse it, and outside that local office in Indianapolis, is there any kind of review of it, not just judicial review but any kind of administrative review in the FBI office? I don't know that we have good answers to either one of those questions.

A national identification card, once again?

MR. SCHULHOFER: I too have not thought through all of the dimensions of that. My intuition has been that the aversion to national security -- I'm sorry, national identity cards has been a little bit overdrawn. I don't fully understand why there is such an instinctive -- a relatively widely held public aversion to that idea. I think what we need to be careful about is the information that goes with the national identity card --

REP. ROEMER: So what would it be?

MR. SCHULHOFER: That's the area where I think whether it includes health information, biometric information, Social Security number. In the world that we're living in now, that kind of information plugs into -- what I see over there maybe from another hearing -- the total information awareness. And what we need --

REP. ROEMER: Do you want me to ask you that question next? Report that, modify it, throw it out?

MR. SCHULHOFER: That's easy, I don't. But what we need to be very clear about if we do have a national identity card is clear structures of accountability and restriction on the use of information. There's a lot of legitimately acquired information that can be used for illegitimate purposes, and we all know that the identity of a covert CIA agent was recently revealed by someone for political purposes. That's the kind of thing that's just the tip of a huge iceberg. So even when the government acquires information legitimately, it's crucial that we have very careful procedures in place that limit the use of that.

That's where accountability comes in, and this is where it makes me a little bit sad to hear Larry Thompson, who I respect so much, translate a concern about accountability into questions about the -- into a sense that there are doubts about the professionalism or honesty of our law enforcement officers. To me, that's not what accountability is about. We've had -- the Fourth Amendment has had for over 200 years the idea that a law enforcement officer's good faith affidavit of need and relevancy is not enough unless an independent judicial mind passes on his belief and on the basis for his belief.

That's certainly something that applies in ordinary law enforcement, and it's not because we think the officer is dishonest, it's not because we think he's not professional, it's because we've learned for hundreds of years the importance of having an independent check, and as I mentioned in my testimony this goes back to George Washington who is by far the most widely trusted executive in our entire history and from the very beginning, Washington himself accepted that what he did in the area of executive action would be and should be subject to review by the courts. He didn't take it personally and I would hope that our people in the Executive Branch today would be proud of our system that subjects everything that's done to that kind of a check.

REP. ROEMER: Well, I knew I'd get the two of you disagreeing on something. After 20 or 25 minutes there, you were very cordial to each other the whole time. I just want to end on your note about General Washington, certainly paraphrasing the widely noted quote about him, "First in war, first in peace," but certainly first to establish an intelligence capability for us in this country which we've read a lot of about as members of the intelligence committee for several years in that capability even back 220 years ago, so I want to thank you both again. I know I have lots of colleagues that want to ask both of you questions, and thank you very much for your time once again.

MR. KEAN: A number of the Commissioners want to ask questions, so if we can keep it as brief as possible, make sure they all get in.

Commissioner Ben-Veniste.

RICHARD BEN-VENISTE: Thank you, Mr. Chairman, and I'd like to join my colleagues in thanking you for your appearance today and your insights, and the amount of preparation that's gone into your presentations this morning. I start my analysis of the balance between the need for greater intrusiveness into the privacy of United States citizens with the observation that our intelligence with respect to the 9/11 hijackers was pretty good prior to the catastrophe that took place on 9/11.

Where our law enforcement and intelligence community failed was in utilizing the information that was available in a way that could have interrupted the plot. I would note that nothing that I have seen so far in the course of our investigation on this commission has caused me to change that assessment. The changes that have been put in place since 9/11 have on the other hand created an atmosphere of concern over government intrusiveness with respect to the privacy and free speech rights of our citizens.

There has been anecdotal information put forward and so I caveat it at that point that individuals who have been involved in protests regarding the Iraq war have wound up on no fly lists and have been treated in a way that makes them suspect that perhaps their names have been added by reason of their political action. With that preamble, I would like to put two questions. First, what assurances are there, if any, that expanded powers given to law enforcement to combat terrorism have been or are likely to be used for ordinary law enforcement not related to terrorism?

And historically, I would put forward the example of the RICO statute, which was designed to combat organized crime but has since been utilized in every conceivable way having nothing to do with organized crime. And secondly, given the concern that legitimate free speech and privacy rights may be infringed and given the enormous effort now underway to accumulate and disseminate databases with respect to United States citizens, something we're going to deal with a little bit later in these hearings today, I want to call your attention to a recent FBI intelligence bulletin and get your comments.

This bulletin came out on October 15th, 2003 and I'll just quote very briefly from it and get your comments about this bleed-over effect. The intelligence bulletin, which has circulated to federal, state and local law enforcement agencies throughout the country says, "On October 25, 2003, mass marches and rallies against the occupation in Iraq are scheduled to occur in Washington DC," and then it talks about potential violent or terrorist activities associated with the protest. It goes on to say, "Even the more peaceful techniques can create a climate of disorder," and they use as examples obstructing traffic, possibly intimidating people from attending the events protested.

It goes on, "Extremists may be prepared to defend themselves against law enforcement during the course of such a demonstration," and some of the indicia of extremists protecting themselves are the wearing of sunglasses and layered clothing. Activists may also use intimidation techniques such as videotaping. And then it concludes that law enforcement agencies are encouraged to report any potential illegal acts to the nearest FBI and Joint Terrorism Task Force.

By this, I think you can see that the definition of terrorism and terrorist acts or violent acts is particularly squishy with regard to this bulletin, and it of course created something of an uproar, and so my question with respect to that is are we overreacting, or is there the potential for creating a climate in this country that is so counterproductive to our ideals that we ought to look at it midcourse and make some suggestions regarding correcting it? Professor, why don't you take a first crack at the --

MR. SCHULHOFER: I've had the consistent opportunity to get in the last word.

(Laughter.)

So it's only fair. First of all, first question was what assurances do we have that the expanded powers won't be used for unrelated purposes? We have no assurances, and quite to the contrary, the Justice Department acknowledges that it has used these powers for unrelated purposes, particularly the Justice Department document, "USA PATRIOT Act: Myth versus Reality," which I believe is September '03. In the course of debunking myths such as the fact that the powers might be used for unrelated purposes, the report itself documents, and separately for each section, the instances in which they've been used, and it documents specifically instances when they were used to investigate the theft of trade secrets, investigate extortion, investigate what they called narco-terrorism which I believe is drug trafficking, and so on. It's all made very explicit so we know that this is being done and it's inexcusable because it's very simple as a matter of draftsmanship to do what the PATRIOT Act does in most of its section, which is to say that these are for purposes of a terrorism investigation.

Secondly, about the ability of this to bleed, I believe your question enters particularly sensitive areas of political protest. I think your question indicates itself how quickly we've moved in that direction. And we thought we had learned this lesson in the '70s, with the FBI guidelines that were adopted by Attorney General Levi and President Ford, which laid down rules intended to prevent the overly wide sweep of information that could intimidate the expression of First Amendment activity and it could be misused for inappropriate purposes.

Among other things, and I don't want to disparage the importance of First Amendment rights, it's extremely important, but I think it's also important for the public to understand that we don't get more security this way. What we get is an incredible misuse of FBI counterterrorism investigative resources, which as we have heard, are stretched very thin. And they're to be used to prevent the obstruction of traffic in cities.

So it was with this in mind that the FBI guidelines adopted in 1976 structured this to try to prevent this type of abuse. And one thing that happened on May 30th of '02 was that the attorney general announced very substantial changes to those guidelines that, in effect, relaxed and obliterated, unloaded most of the -- many, I should say, many of the significant restrictions that had been in place since 1976. And again, I try to make this answer brief, so I would just say again, this is another instance of a change that's totally unrelated to terrorism, because the guidelines that were changed, the FBI guidelines that were changed, were not the guidelines that governed international terrorism investigations. They were the guidelines that governed the investigation of general crimes. And I have yet to hear and explanation of why that was necessary.

So are we overreacting? I think it's demonstrable and not debatable that we have overreacted in ways that not only damage our liberty unnecessarily but they are counterproductive and they foster mistrust in a sense of oppressive surveillance and they foster alienation in the very communities whose help we need if we're going to win this fight. Thank you.

MR. BEN-VENISTE: Larry?

MR. THOMPSON: Commissioner, the professor and I have been on another panel and he did a great job, but I'll try to give you an explanation as to why we made some of the changes in the guidelines because we carefully reviewed those guidelines with respect to making changes that we thought were appropriate. And, Commissioner, you pointed out the fact that there was intelligence with respect to the individuals that were involved in the 9/11 attacks and there was information in the system about those men. But one of the problems I think we had prior to 9/11 is that we had a paradigm, certainly in the law enforcement community and perhaps throughout government, which was a reactive philosophy.

In other words, we were going to wait until something happened, then react to it, then investigate the heck out of it and prosecute the individuals who were responsible for the events. And it was crystal clear after 9/11 that we had to do a different -- we had to undertake a different approach and we had to focus on prevention. And we had to be proactive, and we had to undertake measures that were designed to detect and prevent terrorism at the very beginning.

Now, that does create the tension that the professor talks about and we certainly cannot overreact but we do need to develop a situation in which our law enforcement officials can undertake activities, especially activities that are open to the public that are designed to detect instances of terrorist activity. I do not know what the underlying intelligence was as it related to why the FBI offered that memo, I have not reviewed it. But we have to be careful, I agree with you, we have to be careful. But on the other hand, we have to be ever vigilant in terms of doing what we can to be proactive.

The one thing that the attorney general and I though were very concerned about when we reviewed the guidelines was to make crystal clear that while you could undertake activities of a public nature that were designed to detect terrorist activity, you could not undertake activities that were designed to interfere with our citizens' constitutional rights, rights that are protected by the Constitution or other laws. And that's a fine line and it's a judgment, but law enforcement officials make judgments every day.

So I would just respond to the memo, and that is I think it's important that we have to continue this new paradigm of prevention and disruption. And we have to be proactive with respect of what we're doing. But we cannot interfere with activities that are protected by --

MR. BEN-VENISTE: What are you protecting against and what are the disruptions? In that memo it doesn't appear to me to be related to the kind of terrorism that we're concerned with.

MR. THOMPSON: Sir, I would agree with your comment, except that I don't know the underlying intelligence that led to that memo and perhaps some of the unfortunate words that were used in that memo.

MR. BEN-VENISTE: Just one follow up to your answer, Mr. Thompson, and that is with respect to the changes that have been put in place post 9/11, which is after all, the central focus of what we're involved with in this commission. Other than clarifying gripes under FISA, which the FISA court, incidentally, said was unnecessary, but other than that, can you point to any particular aspect of what has been changed since 9/11 in our laws that would have directly impacted on the interruption of the 9/11 plot?

MR. THOMPSON: Other than --

MR. BEN-VENISTE: The clarification of FISA, which the FISA court said was simply a misreading by those who were applying FISA -- of the terms of FISA.

MR. THOMPSON: But, Commissioner, that misreading had been in place when I got to the Department of Justice, and it was certainly the way we were doing business in the Department of Justice.

MR. BEN-VENISTE: That's why I say, putting that aside, is there anything else that has been enacted since 9/11 that in your view would have likely resulted in the interruption of a plot?

MR. THOMPSON: Enacted is a narrow word, but I would say this: That if we had in place system-wide, government-wide, a paradigm that we were going to do everything that we can to prevent and disrupt terrorist activity, that we were going to share information, perhaps that paradigm, given what we now know that we knew about the hijackers' activity, perhaps, I don't know, but perhaps we would have been able to do a better job with respect to investigating, you know, those activities.

MR. BEN-VENISTE: That's a question of focus rather than law, isn't that right?

MR. THOMPSON: Correct. May I respond to your point, Commissioner, about the other PATRIOT Act provisions. Many of those provisions are general criminal law provisions and I think it would be difficult, but more importantly I think it would be inappropriate for the Department of Justice and federal prosecutors to limit those provisions, provisions that are in title 18 that are designed to go after crime, to any particular kind of criminal activity. And if the statute applies to general criminal activity that may be terrorism, but it may be bank fraud, it may be money laundering, I think you should use that statute to its fullest extent to go after that particular --

MR. BEN-VENISTE: Thank you. And I'll leave with the observation that some who are skeptical about how the PATRIOT Act was passed and the time that it took to pass it and what was included in it, have suggested that many of the provisions were essentially on the shelf on the wish list of law enforcement -- I see you smiling -- prior to the catastrophe of 9/11 and, as you have said, have not been restricted to use only to combat terrorism. Thank you, Mr. Chairman.

MR. KEAN: We've got two commissioners who have something to say and about three minutes to get the questions and answers in if we keep on schedule.

Commissioner Gorelick.

JAMIE GORELICK: Thank you, Mr. Chairman, I'll try to be brief.

Mr. Thompson, as you know I sat in your shoes at one point when you were deputy and I was deputy before that.

MR. THOMPSON: I tried to follow in your shoes.

MS. GORELICK: Oh, thank you, flattery will get you nowhere. I would like to ask you a philosophical question about the role of the Department of Justice. As you know, it has two basic roles, one is investigative prosecution in this context, and the other is the protection of rights. And post 9/11 it seems to me that there has been enormous pressure on the institution to favor the first role just because of how terrible an event 9/11 was. And so my question to you is who speaks for civil rights and civil liberties in that perspective within the councils of government?

And this question to bought to mind when I appeared on a panel and I know you were on the same program but on the Third Circuit, where the former head of the Office of Legal Policy and the former head of the Criminal Division essentially said that the government's position with regard to taking American citizens and holding them incommunicado without lawyers and with no opportunity to challenge whether they were properly being held as enemy combatants was unsustainable.

One of the gentlemen, Viet Dinh, said it was unsustainable, the other, Mike Chertoff, said we need a new system to make sure there are checks and balances. So I have a two part question. The first is were you so advised when you were deputy, and who spoke when we were -- we as a government, were creating the architecture that put people incommunicado without counsel, without ability to challenge the circumstances under which they were being held. Who spoke for our rights when that system was being set up and do we need a new structure to have that voice be heard?

MR. THOMPSON: Commissioner, at that conference, the Third Circuit conference, I quoted from a decision of the Supreme Court of Israel that I kept on my desk for the past two and half years. Shortly after the events of 9/11 I was visited by Justice Barak from the Supreme Court of Israel, he tried to -- wanted to see the attorney general, but the attorney general was traveling and he saw me. And he left with me a decision of the Supreme Court of Israel, that dealt with the interrogation of terrorist suspects and the use of what was called their moderate physical pressure in the interrogation of terrorist suspects. And I don't really know technically what moderate physical pressure is but it's --

MS. GORELICK: One can imagine.

MR. THOMPSON: -- one beyond questioning, just simple questioning.

(Laughter.)

And the Supreme Court of Israel prohibited that activity and in some very eloquent words and I think my old speeches are online at the Department of Justice, but I quoted from that speech throughout my tenure as deputy attorney general, and I refer to that speech in not only the Department of Justice internal deliberations but in interagency deliberations. And the gist of that is that we're a democracy, we have to abide by the rule of law, and that not all means that are available to protect a democracy sometimes can be utilized. And sometimes a democracy, while it looks like we have to fight with one hand tied behind our back, we have to do so if we're going to preserve our basic values.

So, to answer your question, I tried to and I know other officials always thought about these very important civil liberty concerns. We would be making a terrible mistake as a country and certainly as a Department of Justice if we allowed what happened on 9/11 to change the essential character of our country. I don't believe that has happened. We certainly have differences of opinion as to how we are, how we should have reacted, some of the ways that we are trying to proceed in combating terrorism, but I don't believe that we have retracted from those.

For example, when we undertook the revisions of the Attorney General Investigative Guidelines, it was always of paramount concern to myself, and I know it was of concern to the attorney general, that nothing in there give rise to any belief, and that's why we specifically stated it in black and white that the agents that undertake any kind of investigation of activities that are designed -- that are protected by the First Amendment or other laws.

Enemy combatant situation -- I'm really not punting but that was a matter that I was involved in as a lawyer. I don't believe -- and it's still in litigation so, Commissioner, I don't believe it would be appropriate for me to make any kind of extensive comments on a matter that's in litigation and a matter that I was deeply involved in as a lawyer.

MS. GORELICK: Well, we will, with all due respect to that position, I think we will need to return to it as a factual matter --

MR. THOMPSON: I understand.

MS. GORELICK: -- to determine how those decisions got made. One of the things that's been striking across the panels that we've had on every subject is that you get an amazing amount of candor once they take their respective uniforms off. And to hear two former Justice Department officials say that a position that was taken by the Department essentially was unsustainable, is unsustainable and to hear that now is disturbing and leads me to wonder whether we have the right checks and balances in place or whether we have put so much pressure on the Department of Justice to be the investigator that we perhaps need a countervailing voice, a counterpoint, some independent body to be the voice of civil rights and civil liberties.

And I'd be happy to give you the last word here. Had I had time I would have returned to that theme with respect to the Foreign Intelligence Surveillance Act because I believe when I was at Justice that I had enormous power that was essentially unchecked. And of course with the changes in the PATRIOT Act there's even greater power in the Department of Justice and I really do wonder whether there are sufficient checks. But I know -- I should give you the last word and then I know there are other commissioners who would like to have an opportunity to give a question or two.

MR. THOMPSON: I believe Judge Chertoff's comments will speak for themselves, but as I understood what he said was that a lot of decisions were made in the context of a crisis and people were making the very best calls that they could and that with respect to procedures in terms of granting access to counsel, that perhaps we should review and revisit some of the thinking with respect to those procedures. I think that's what he said, which is a little narrower than --

MS. GORELICK: Well, it's a matter of public record and we don't have time to pursue it now.

MR. THOMPSON: I hope you understand my comment on it.

MS. GORELICK: But I do appreciate that there were urgencies of the moment, and that's one of the purposes of this commission is to step back from those urgent moments and take a look at whether we have the right structures in place going forward. Thank you very much for your testimony, both of you.

MR. KEAN: Last question from Senator Gorton.

SLADE GORTON: Professor, your critique of the use of the phrase of the status, enemy combatant. Was it limited to the apprehension of citizens of the United States in the United States? Does it extend to the apprehension of non-citizens in the United States, to United States citizens apprehended in say, Afghanistan or in Germany, or non-citizens apprehended outside of the United States, say as a guerilla out of uniform in Samara?

MR. SCHULHOFER: Thank you, it's a very important question. First of all my position, my critique, certainly encompasses the seizure within the borders of the United States of both citizens and foreign nationals. These are people who are seized far from any zone of combat in an area where the courts are open and functioning and they should have all the rights provided by the Constitution.

When you deal with the seizure of individuals overseas in a zone of combat, and there I would include both U.S. citizens and foreign nationals again, when they're seized in a zone of combat, there is a need for -- what I think an obvious need for, discretion on the part of military commanders and different rules apply. In addition, our courts are not open and functioning in those areas. So certainly different rules apply. I believe that in this zone of combat situation there still should be a conception of due process that enables people seized in that circumstance to have the opportunity for some kind of hearing in some kind of tribunal to raise the question: Were they a war correspondent, were they a reporter, were they just a civilian caught up in trouble?

We held hundreds -- we held hundreds of those hearings during the Vietnam War and we held hundreds of those hearings during the first Gulf War. We have not held any of those hearings, as you know, with respect to people that are being held at Guantanamo at this point, more than a year after their capture. You referred I believe to Samaria? Is that --

MR. GORTON: Well, a city in Iraq where people are shooting at us.

MR. SCHULHOFER: Right. The Israeli Supreme Court uses that term to refer to occupied territories on the West Bank --

MR. GORTON: I spelled it differently.

MR. SCHULHOFER: But I think it's pertinent here because with respect to people seized in a zone of active combat, there's another Israeli Supreme Court decision more recent than the one Larry Thompson mentioned, a decision from February of this year, in which the Court said that alleged enemy combatants seized in a zone of combat on the West Bank have no right to a hearing until they can be removed from the zone of combat, which is a matter of days. But once they are removed they have the right to a hearing. I've cited that and quoted from that decision in my comments. So certainly we're in a completely different regime.

But we should not allow and we should not accept what I believe is the Justice Department's position and that has been that since you have these rules that apply to the battlefield and since after 9/11 the whole country is part of the battlefield, then the Justice Department has argued that the same rules should apply right here in the United States that would have applied in Samaria or Kandahar or anything else and that's a conception that if we accept it, the entire Bill of Rights --

MR. GORTON: Just one narrow follow up on perhaps the most difficult of yours -- let's presume the arrest of a non-citizen of the United States, a non-citizen who is not here, not legally -- Mohammed Atta himself before 9/11 or for that matter, the German saboteurs who landed here in 1942. Do they have the same rights as citizens?

MR. SCHULHOFER: Foreign nationals certainly don't have the same rights, they have no right to remain here. They can be deported and under certain circumstances I myself am very comfortable with the idea of preventive detention subject to some kind of independent judicial review of the need for it and the basis for it. That's a constant and I'm probably belaboring the point, but that has been my constant theme. I don't object to the substance of powers like these if they are appropriately reviewed by independent Article III judges. So certainly, foreign nationals have different rights.

The German saboteurs admitted that they were enemy combatants. They admitted that they were members of the German Navy. They admitted that they had buried their uniforms when they landed here. The question that's posed by the Padilla case is whether the rules that apply to someone who acknowledges their role should be the same as the rules that apply to someone who is being accused. And if we want to make -- if we think that being an accused enemy is the same thing as being a proven enemy then the Justice Department's position is sound.

MR. GORTON: Thank you, Mr. Chairman.

MR. KEAN: Thank you very much, Professor Schulhofer and Mr. Thompson, thank you very much for enlightening and interesting and we appreciate you taking the time.

MR. THOMPSON: Thank you.

MR. KEAN: If I could ask our next panel please, to assemble?

(Recess.)

MR. KEAN: Okay, if we could call the hearing back to order? Our second panel has assembled. They are Judith A. Miller, partner in Williams and Connolly, and former general counsel of the United States Department of Defense. Stewart A. Baker, partner Steptoe and Johnson, former general counsel National Security Agency, and Marc Rotenberg, executive director of the Electronic Privacy Information Center.

Mrs. Miller?

JUDITH A. MILLER: Should I start?

MR. KEAN: Go ahead, yes.

MS. MILLER: Mr. Chairman, Mr. Vice Chairman, members of the Commission, I am delighted to be here this morning. The topic of protecting privacy, preventing terrorism is central I believe to our ability to reduce the possibility of other catastrophic attacks. Better intelligence supported by technology is not all that is needed to defeat possible terrorist attacks here and abroad, but it is in my judgment a crucial element of any strategy to do so.

I know that time is short this morning, so I would like to make three basic points in this opening statement before our broader discussion begins. First, I believe the reaction to the Total Information Awareness Initiative at DARPA, the Jet Blue Initiative undertaken by the Army and the various efforts at watch list at DHS all demonstrate that privacy, civil liberty and fairness concerns must be built into any information sharing technology from the beginning in order to earn the trust and be consistent with the values of the American public.

The work of the Markle Task Force that Stewart and I have both participated in, as well as Commissioner Gorton, provides building blocks for what is necessary, I think. First, adopting guidelines on the use of technology that address relevance, retention, dissemination and reliability issues. Second, improving oversight, including audit and review procedures. Third, reviewing risk and benefits before the adoption of any of these powerful tools and using technology to enable both imaginative cooperation and privacy. To analyze data, control access to databases and facilitate audits of the use of those databases.

Second, and building on these principles, our task force recommended a System-wide Homeland Analysis Resource Exchange or SHARE network. A visualization of how this might work, permitting collaborative analysis of emerging threats in basically real time and using both stored and current information from around the world conveys the power of this approach far better than I can and I would commend that demonstration to this commission. But notionally, seeing state, FBI, CIA and trusted experts all collaborating in such an environment, a shared information environment, brings me to my third point.

None of this technology-enabled sharing will work if we can't find a way to incentivize the cultures of those agencies charged with implementing it to use it effectively. Although efforts are ongoing at the FBI and elsewhere, my own view is that this is the hardest problem by far. The task force makes some modest recommendations in this area as well. A simple but dramatic step, also urged by others, is to revise the "tear sheet" culture of intelligence reporting so that you write an unclassified version of the report first, not last. But if the intel community one year or five years from now still focuses its best efforts on making it into the PTTR every day, you will have a litmus demonstration that the new culture of collaborative sharing has not taken hold.

Thank you, and I'll await your questions.

MR. KEAN: Thank you, Mrs. Miller.

Mr. Baker?

STEWART A. BAKER: Thank you, Mr. Chairman, Vice Chairman and members of the Commission. I'd like to focus on a question that actually Commissioner Ben-Veniste asked or observed. That we actually had pretty good intelligence about the terrorists in the lead up to September 11. And I think that's right and what I'd like to focus on is not September, but August. Because in August the FBI learned that there were two terrorists whose names we had, who were in the country who were clearly here to kill Americans.

We had two and a half weeks to find them. They were living openly in San Diego, they were getting California IDs, they were buying stuff, engaging in financial transactions, signing rental agreements all in their own name, making reservations on the plane that they would ultimately fly into the Pentagon. We couldn't find them. That's a terrible failure. And I'd like to explore a little, from what I can gather, I'm not cleared to review any of this material anymore, but I have reviewed pretty carefully the public discussions of what happened to try to explore what went wrong there.

And I think when you look at it closely, it's really a failure of tools and a failure of rules. The tools problem is the problem we're here to talk about today. The FBI agent who discovered this and made it his mission to try to find these guys had some electronic tools, he was able to look in some databases for arrests, for certain automobile registrations. They hadn't been arrested and they hadn't been registered in any vehicles. He did not have access to a lot of government information, so that it took him about a week and a half to figure out what address one of the terrorists had put on his visa as he entered and then to check with the hotel that he put down to see if the guy ever stayed there.

He didn't have a computerized access once he got legal authority to go into either of those databases. So we lost weeks there. Once more, he didn't have computerized access to any of the records that these guys were generating -- not the financial records, not the travel reservation or even some of the California records. So there's clearly a failure of tools. If he could have been able to find those two guys and then check the links that they had to many of the other terrorists -- there were direct shared addresses as I remember, links to the people who flew into the south tower and the north tower. We had a chance to stop this. The one chance that I can see in all of the errors that were made where we really could have prevented this if we had the tools to find these guys, and it is a scandal that we don't have them.

So we need that. We need at a minimum an ability to do those searches quickly and efficiently, not just by shoe leather and by calling people which is the method that the FBI has used for a generation. That's just to fight the last war. Obviously the next set of terrorists is not going to be so accommodating as to use their real names. We're going to need other mechanisms and I've listed in my testimony which I've provided about a dozen IT capabilities that our investigators need in order to find these folks and to respond appropriately to crises.

So clearly we need more tools. But I think when you read the story of what went wrong in those two weeks with an eye that is informed by bureaucratic realities and political realities you'll see that there's a problem with the rules as well. It's really -- it's heartbreaking to read what this agent said when he asked for the authority to get the assistance of law enforcement -- there are a million law enforcement agents in the country, there were three times as many FBI law enforcement agents as intelligence agents, he wanted to get help on that side of the FBI and he was told by FBI headquarters, not on your life. You cannot capitalize, cannot do that because there's a wall between law enforcement and intelligence.

And his response was to say, the American people will not understand this, someone is going to die because of this. Osama bin Laden is the principal beneficiary of the wall that we have built. How can we possibly maintain this? The answer was, we don't like it either, but that's the rule.

Now, I feel strongly about this, obviously, because I was part of building the wall. I was at NSA. I thought the wall responded to an appropriate, reasonable worry -- theoretical but real -- about civil liberties and privacy and that we could have a wall and still have an effective response to the national security problems that we have. We wrote rules and we thought we had done a fine job of carefully balancing all of those equities. We obviously failed. We failed terribly.

And that failure I think reflects both a desire to constantly add to the protections even against theoretical risks to privacy that we have built into our system, and at the same time, not to spend as much time worrying about whether people will actually be able to do their jobs to protect Americans. Because what finally happened in this case was the rules might just barely have been workable if it were not for the fact that there was a privacy scandal in the FISA Court in 2000 and 2001, in which the court believed it had not been properly informed about contacts across the wall when it was given FISA orders to sign. It ordered a massive review. It threw out one of the principal FBI investigators who appeared before it and I'm guessing, though I don't know, that disciplinary action and maybe even a perjury indictment was considered for that fellow.

This was so bad that we dropped coverage on terrorism suspects in the United States in early 2001. So al Qaeda is preparing to kill thousands of Americans, we can't even keep up the wire taps that we have authorized in the past. It's a disaster. And it's a disaster because there was such an intent focus on preventing even the most theoretical privacy abuse. That's the lesson that I would draw from September 11.

I just would say one more thing. I'm very worried that we're going back there, that what we have seen -- I gave a speech once, I said, you know, we had two and a half years of serious failures. We had a major failure on September 11. We've had two and a half years to figure out what went wrong, who should be disciplined, and one person has been forced out of government, Admiral Poindexter. And the lesson that you can draw from that is, well, you can screw up pretty badly in protecting the American people, but if you get crossed wires with privacy lobby, you're gone. That is exactly the wrong message to be sending to our FBI and CIA agents.

And finally, I would guess I'd say if you look at what's happening in the Administration today, efforts to develop new and innovative tools are stalling and even the wall is coming back. My understanding is that within TTIC there are actually limits on what intelligence agents can look at by way of law enforcement information, despite our major effort to get rid of that wall and the terrible consequences that we saw from having it. So my fear is that we are re-establishing August of 2001 and that the real risk here is that just like last time, that August will lead us to September. Thank you.

MR. KEAN: Thank you.

Mr. Rotenberg.

MARC ROTENBERG: Thank you, Mr. Chairman, members of the committee. I think my purpose at this point in the hearing is to provide the cornerstones for the privacy interests. When we talk about privacy and liberty after September 11th, people tend to talk about it in the abstract, and they say we should not trade our country's precious freedoms and constitutional liberties for some sense of short-term security.

I believe it's extremely important for this commission to actually understand what the framework of privacy protection is in this country, because that is precisely what is being altered by the many proposals that have been put forward since September 11th, both to give the government new investigative authority and also to give the government new tools of surveillance, not only of people who may pose a threat to the United States but of citizens in the United States, people who participate in the political process, people coming to open public spaces to express their views. These are also the people who become subject to the new systems of surveillance we are establishing after September 11th.

But to understand this problem, I think we need to go back in time. I think we need to go back to the late '60s and early '70s, when the Congress undertook an extensive investigation of the surveillance implications of government-based data systems. And after almost eight years of hearings, Congress passed the Federal Privacy Act of 1974. And what that act did was to establish comprehensive safeguards for people in the United States against the misuse of their personal information held by federal agencies.

There was no dispute that the technology would play a critical role in advancing government programs, including law enforcement, nor was there any dispute about the need to establish appropriate safeguards that would ensure that the technology could be used for the benefit of the American public and the American government and still safeguard essential liberties. The Privacy Act of 1974 is the basic framework of privacy protection for the use of personal data in the United States, and it imposes very significant obligations on federal agencies that collect and use personal data. It does this not to frustrate an agency purpose or to add additional burden but rather to ensure that when personal information is collected by federal government agencies, it is used for an appropriate purpose.

Now, the other key cornerstone to think about in assessing privacy protection in the United States is the Federal Wiretap Act. The wiretap statute was passed in 1968, following perhaps two of the most important privacy cases decided by the United States Supreme Court. One concerned the use of a tape recorder in a public payphone in the streets of Los Angeles and whether that new investigative method would require the use of a warrant, which is to say judicial approval, or whether law enforcement could be free to use any new form of technology without judicial oversight to gather evidence that could be used in the criminal prosecution.

And the court said quite clearly in Katz v. United States that this new type of technology needs to be subject to Fourth Amendment standards; not that it could not be used or that a prohibition should be established but rather that the traditional Fourth Amendment standards would be required for electronic surveillance. And the following year, in 1968, when the Congress passed the federal wiretap statute, based on Katz and the Berger v. New York opinion, it constructed an elaborate regulatory framework imposing significant oversight responsibilities on federal agencies that were using electronic surveillance authority.

Now, given the focus that the Commission has understandably undertaken over the last several months, of the mood of the country post-September 11th, I think it's reasonable to consider also the challenges that the United States faced in 1968, when both the Supreme Court and the U.S. Congress enacted such sweeping privacy safeguards. We faced powerful adversaries in China and the Soviet Union. Nineteen sixty-eight was the year of a presidential assassination and the slaying of a civil rights leader. There were widespread public protests across this country, unlike anything we've seen in over two decades. And yet at that point in our nation's history, the court and the Congress recognized the need to establish important privacy safeguards for our citizens.

Now, I'd be very pleased to speak with you about a number of the developments that have happened post-September 11th, to look at the Jet Blue matter, to look at CAPPS, and to look at total information awareness. But I would urge you at the outset to consider the important work that has been done prior to 9/11 to establish privacy rights for people in the United States, even during periods of significant turmoil.

MR. KEAN: Thank you very much.

Senator Gorton.

MR. GORTON: Mr. Rotenberg, since you've finished, I'll start with a couple of questions for you. As I read your written testimony here, on the last page you have four recommendations which seem to me more to be cautions about the way in which we make recommendations than substantive recommendations themselves. But on the assumption that one agrees with every one of those four cautions, does that mean that in your view, no additional legislation was needed after 9/11, either to strengthen the investigative and law enforcement powers of agencies in the United States or changes in the 1974 privacy law to which you refer?

MR. ROTENBERG: Well, let me say, Senator, first of all that I felt strongly that changes were necessary prior to 9/11 to make air travel safer, and there were a lot of weaknesses in the U.S. air travel system that were fairly well known, particularly by comparison to European carriers, and that had not been addressed. I think part of the problem that you face is understanding that preventing 9/11 may be more about preventing the exploitation of security flaws than it is about dramatically expanding surveillance capabilities.

Now, our panel discussion today focuses on expanding those surveillance capabilities, but I do need to say at the outset, I think even before we get to that issue, we have to focus on how we reduce the security flaws that any person who might consider harm against the United States is able to exploit. The question you ask, of course, is what changes might we make to the Privacy Act, or to the federal wiretap statute after 9/11. Those changes that were made in the USA PATRIOT Act, I do not believe have significantly contributed to the greater safety of the United States. Now, Stewart Baker and I may actually disagree about what was happening at the FISA court in 2002 at the time that a seven judge panel unanimously concluded that there had been mistakes in the applications for those FISA warrants. And it came as a surprise to many of us when the appellate panel reversed that determination and said that, in effect, this procedure that had been established to ensure that the lower standard used for intelligence investigations not become a back door way to bootstrap criminal investigations, which is now the concern of many in the civil liberties community.

I don't think significant changes in those two laws are required, but I do believe that a lot more can be done to ensure security.

MR. GORTON: Okay. So from your view, there was not a need, post 9/11 for any statutory changes in either direction, but simply a more efficient and more effective use of the statutes that were already on the books.

MR. ROTENBERG: Yes. And I think the way this could have played out is when the government was proposing to establish new systems of surveillance, and of course many have been proposed, and some put into place as I described on my testimony. It should have been the case that an effort was undertaken at the outset to assess how our current privacy rules would apply to these new systems of surveillance. I think that would have gone a long way to addressing some of the public concerns in the CAPPS system for example, which is the passenger profiling system. The TSA is proposing to go forward, but the required -- required by OMB, required by federal law, privacy impact assessment for that project, has not been completed. And so when civil libertarians and others, raise concerns about passenger profiling, they are saying in part, there are privacy obligations that that agency is obligated to fulfill, that it has not yet fulfilled.

MR. GORTON: With respect to CAPPS and airline security, do you have any critique or differences with a proposition for a voluntary system, under which if citizens who travel by air are perfectly happy to give up whatever is considered appropriate to get a form of identification which will allow them to avoid some of the security lines and go more directly to their gates, assuming that it's voluntary and not mandatory.

MR. ROTENBERG: Well, Senator, if that could be made to work, I mean it would seem a sensible solution, but I would be surprised, frankly, if those who are charged with protecting the security of the country would be satisfied by that solution. Now I remember a similar debate Stewart Baker and I had almost 10 years ago over the key encryption standard, the Escrowed Standard for encryption, and it was proposed at that time when there was strong public resistance. Well, maybe we should just make it voluntary at the outset so that those vendors that want to implement this standard that enables surveillance will be able to do so. Of course we realize, as law enforcement, that such an approach really wouldn't fulfill the mission that was underlying the effort. And I think you would face a similar dilemma here. The people who are likely to follow the voluntary path for passenger profiling are probably those that you're least concerned about.

MR. GORTON: Ms. Miller, in a sense, the same question to you as to Mr. Rotenberg. In your view, was the statutory regime prior to 9/11 adequate and sufficient both with respect to national security and privacy?

MS. MILLER: A couple of points, I guess, on that, Senator. First, I've said previously that I thought that the FISA Act could have been properly clarified. Whether you did it precisely as the PATRIOT Act did it or not, the observation I had while I was at DOD is that there was a myth built up over many, many, many years, through a number of administrations. There was a particular sort of ossified view of what that statute meant that occasionally got in the way of people just understanding and being on the same page and being able to go forward to the court effectively. I didn't see, personally, any situation where we weren't able to get what we needed under the old statute, but I recognized that there was enough lack of clarity, perhaps, or confusion sometimes, in the minds of individuals trying to get authority under that statute that some clarification could be of benefit.

The bigger problem that I see right now is one that hasn't really been addressed by whether the PATRIOT Act or any other sort of proposed legislation or oversight that I've heard being discussed, and that is that, to the extent you wanted -- you were going back to the point of this panel -- to the extent you want to actually enable people to share information usefully in a proactive and hopefully preventive way, in a variety of contexts, beyond what we faced on 9/11.

I think, and I differ strongly with Stewart on this point, I think you have to put in mechanisms in advance to make the American public trust that technology. And it is not an undoable task, it just requires -- just is perhaps to light, but it does require oversight from the Executive Branch, oversight from Congress, a whole set of guidelines and discussions that can be done in public for the most part instead of behind the scenes, that will give the American public confidence that what we are doing as we use these powerful tools is designed to protect us, not to undermine our liberties. And I think that's something that can be done.

MR. GORTON: Mr. Baker, the pre 9/11 adequacy of both our security statutes and our privacy statutes. And your critique of the PATRIOT Act, too much, too little? What should be done?

MR. BAKER: One of the things that the PATRIOT Act did was try to knock down all of the most obvious legal bases for the law between law enforcement and intelligence, and since I think that was a major contributor to the disaster of September 11, I think that was a good idea. That mean getting rid of the restriction on sharing of wiretap information with intelligence, getting rid of the restrictions on sharing grand jury information with intelligence and getting rid of the principle purpose rule that had emerged from practice in the FISA court.

MR. GORTON: And we need the PATRIOT Act in each of those cases?

MR. BAKER: There's a kind of revisionist view that we got from the FISA court of review that said, gee, you really didn't need to do that, if people who had properly understood the law would realize that what the FISA court had been doing for 20 years was wrong. Well, they'd been doing it for 20 years, no one had appealed it, it was, as Judy says, ossified into the practice of everyone who touched the FISA court and that was not going to change, I suspect, without congressional intervention.

MR. GORTON: Go ahead, I interrupted you.

MR. BAKER: As far as security issues, I actually think there are some problems that we were sort of engaged in national security deficit funding on -- we have yet to recognize that once you have gotten rid of the wall between law enforcement and national security, you're going to run the risk that if you try defendants for terrorism in U.S. courts, as so many people seem to now want, they're going to start making Brady motions to examine the entire take of U.S. intelligence agencies to see if they can find something that might be exculpatory. And unless you can find a way to find a way to deal with the problem of whether Brady really extends that far, you're going to run the risk that at least the lawyers for, and maybe the defendants themselves, will get to see exactly what our methods and sources are with respect to the terrorism problem. That's a big problem.

I think we also, the court of review said go ahead and get this FISA orders against people, and we think it's constitutional to do it, even in a criminal context, but of course if we actually try them, they're going to be making suppression motions in courts that are not going to end up reporting to the FISA court of review. And if we don't actually struggle with the question of how we're going to handle that, we could end up finding we have a crisis about the FISA wiretap system within five years.

MR. GORTON: Would the solution to those problems require additional legislation?

MR. BAKER: Probably. I don't think the courts are likely to address that, although it's certainly possible to restrict Brady in particular, and perhaps even to understand the question of the -- well, the FISA quarterly review clearly came to the view that it was constitutional to use FISA in this context. I am not as confident that the Ninth Circuit will come out that way.

MR. GORTON: And in light of 9/11 and the particular challenges we face today, is there any appropriate review of the 1974 Privacy Act?

MR. BAKER: Actually, I don't think the 1974 Privacy Act as it's been understood and administered has proven to be a significant barrier, and I suspect it won't prove to be a significant barrier in the future to carrying out appropriate national security measures.

MR. KEAN: Richard?

MR. BEN-VENISTE: Good morning, and I'd like to thank you on behalf of my colleagues for your appearance here today. Let me start with a personal observation, and that is that those who are vigilant in protecting our constitutional rights and civil liberties against overreaching in times of national crisis are every bit as patriotic as those who favor more extensive incursions in the name of national security, perhaps even more so because they are courageous in the face of what's seen to be a popular demand. Something terrible happens, the cry is we've got to do something different.

I would suggest that we did in fact have the tools available p