Government Executive - Authors - Gregory F. Treverton

What makes an effective intelligence chief? A former DNI official points to the answer

Gregory F. Treverton, The Conversation — Mon, 08 Jun 2026 17:30:57 -0400

President Donald Trump’s choice for acting director of national intelligence, Bill Pulte, has proved controversial. Pulte’s lack of background in national security matters has sparked resistance from Democrats on Capitol Hill, which is not surprising. But some Republicans, too, have expressed dismay at the president’s choice, a Trump loyalist who currently runs the Federal Housing Finance Agency.

“I see no evidence of any qualifications for that job,” said U.S. Sen. John Cornyn, a Republican from Texas.

The current director of national intelligence, Tulsi Gabbard, is leaving the job at the end of June 2026.

Here’s why it matters who holds the job of director of national intelligence.

Principal national security adviser

To speak of telling truth to power seems terribly old-fashioned these days, but as a veteran of White House intelligence operations, I know that is the essence of the job.

The director of national intelligence is the president’s principal adviser on intelligence, though the CIA director has remained somewhat co-equal in that role. In past administrations, the director of national intelligence has been responsible for both the President’s Daily Brief, where the most crucial and sophisticated intelligence is presented, and for the work of the National Intelligence Council.

Most of the President’s Daily Brief items are still done by the CIA, but the director of national intelligence or a deputy briefed the president, daily in most administrations but one or two times a week in the first Trump administration. Now, it is not clear the briefings take place.

The issues in those briefings lean toward the immediate and tactical: What is the situation on the ground in the wars in Iran and Ukraine? If the United States does X, how will the Iranian regime or Russian President Vladimir Putin respond?

But intelligence strives to push presidents and their colleagues to think more strategically: What are the implications of hypersonic missiles? What is the trajectory of the relationship between Russia and China? What are China’s geostrategic objectives, and what is the role of the Belt and Road Initiative in that vision? What if, far from toppling it, U.S. and Israeli attacks push the Iranian regime to become more hard line, or even produce some “rally ’round the flag” effect among previous opponents of the regime.

9/11 led to intelligence changes

I was chair of the National Intelligence Council from 2014 to 2017, providing day-to-day intelligence support to the National Security Council and its committees, as well as trying to find time to do more strategic intelligence, looking at trends and connections across issues, producing what are called National Intelligence Estimates.

The director of national intelligence, known as the DNI, sits atop the 17 agencies that make up what is called the U.S. intelligence community. The director neither runs those agencies nor has full control of their budgets.

Rather, the director of national intelligence coordinates them, which sometimes seems like the proverbial herding of cats. They assemble a combined budget for intelligence, but many of the big agencies, such as the National Security Agency, which makes and breaks codes and intercepts signals of interest, belong to the Pentagon.

The creation of the director of national intelligence position was a direct result of the 9/11 terrorist attacks.

The report of the 9/11 Commission was vividly damning about the failures of communication between agencies in the run-up to 9/11. In meetings in New York that summer, CIA and FBI officers were literally unsure what they could tell each other: The former wondered whether the FBI people were really cleared to hear this, while the latter feared that talking might blow a case they were working on. That lack of coordination played a role in letting the plotters slip through intelligence, often in plain sight.

The result of the commission’s work was the Intelligence Reform and Terrorism Prevention Act of 2004, which created the director of national intelligence position.

A score of blue-ribbon panels over 50 years had recommended breaking the director of central intelligence’s conflict of interest – coordinating agencies and their budgets while running one of them – and creating a director of national intelligence position.

James Clapper, the director of national intelligence for whom I worked as chair of the National Intelligence Council, constantly emphasized “integration.” Across agencies, integration mostly means talking to each other and sharing information. This works against the natural tendency to scoop your colleagues.

Across disciplines, integration means better aligning what information intelligence agencies collect with what analysts need.

How integration works

If presidents want to know what the CIA thinks about a particular issue, they can simply ask. Usually, though, the question is what does the intelligence community think, and then the question goes to the National Intelligence Council, the director of national intelligence’s interagency group for intelligence analysis.

Major strategic analyses – national intelligence estimates – like one done in 2022 on the implications of the COVID-19 pandemic out to 2026, may take months. In all cases, though, the analysis carefully records where there are differences of view in the intelligence community.

In my last year chairing the National Intelligence Council, of the 700 or so analyses we did, about 400 were responses to questions – called “taskings” in governmentese – from the national security adviser or one of the deputies.

National intelligence officers are national experts from inside or outside federal government, and their deputies – the heart and soul of the NIC – are all assigned from intelligence agencies. The largest number come from the CIA, but I worked with a cyber analyst from the Secret Service and a wonderful analyst from the New York Police Department.

Resolutely nonpolitical stance

What was striking then and has struck me both times I’ve had the privilege of running a U.S. intelligence agency is the dedication of the officers.

They work for the nation, not for a political party or ideology. As chair of the NIC, I had no idea of the politics of my people, save for the several closest to me. For them, telling truth to power is not a slogan. It is what they do. They are always worried about “politicizing” – producing an assessment to suit a policymaker’s preference or, worse, being pressured to do so.

The director of national intelligence sets the tone for that resolutely nonpolitical stance and polices it through principles articulated in the agency’s analytic integrity and standards. As chair of the NIC, for instance, I’d receive regular assessments of both the quality of our analyses and whether we risked becoming “politicized.”

For their part, do politicians and agency leaders like it when their pet projects are assessed by intelligence as unwise or infeasible? Of course not. I’ve been on that side of the intelligence-policy divide as well. But the United States is much the better for it.

This story, originally published on Dec. 4, 2024, has been updated to reflect that Bill Pulte has been chosen by President Trump to be the acting director of national intelligence.

Gregory F. Treverton, Professor of Practice in International Relations, USC Dornsife College of Letters, Arts and Sciences

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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How a director of national intelligence helps a president stay on top of threats from around the world

Gregory F. Treverton, The Conversation — Fri, 06 Dec 2024 08:00:00 -0500

In all the arguments over whether President-elect Donald Trump’s choice for director of national intelligence is fit for the job, it’s easy to lose sight of why it matters.

It matters a lot. To speak of telling truth to power seems terribly old-fashioned these days, but as a veteran of White House intelligence operations, I know that is the essence of the job.

The director of national intelligence is the president’s principal adviser on intelligence, though the CIA director has remained somewhat co-equal in that role. The director of national intelligence is responsible for both the President’s Daily Brief, where the most crucial and sophisticated intelligence is presented, and for the work of the National Intelligence Council. Most of the President’s Daily Brief items are still done by the CIA, but the director of national intelligence or their deputy briefs the president, daily in most administrations but one or two times a week in the first Trump administration.

The issues in those briefings lean toward the immediate and tactical: What is the situation on the ground in the Ukraine war? If action X is taken, how will Russian President Vladimir Putin respond? But intelligence strives to push presidents and their colleagues to think more strategically: What are the implications of hypersonic missiles? What is the trajectory of the relationship between Russia and China? What are China’s geostrategic objectives, and what is the role of the Belt and Road Initiative in that vision?

9/11 led to intelligence changes

The current director of national intelligence is Avril Haines, who is my friend and former colleague from when she was the deputy national security adviser in charge of the National Security Council policy committees and I was chair of the National Intelligence Council, providing the intelligence support to those committees.

As director of national intelligence, Haines sits atop the 17 agencies that make up what is called the U.S. intelligence community. She does not run those agencies. Nor does she have full control of their budgets.

Rather, the director of national intelligence coordinates them, which sometimes seems like the proverbial herding of cats. She assembles a combined budget for intelligence, but many of the big agencies, such as the National Security Agency, which makes and breaks codes and intercepts signals of interest, belong to the Pentagon.

The creation of the director of national intelligence position was a direct result of the 9/11 terrorist attacks.

The result of the commission’s work was the Intelligence Reform and Terrorism Prevention Act of 2004, which created the director of national intelligence position.

Before that, the director of central intelligence wore two hats, as the director of the Central Intelligence Agency and loose coordinator of the broader intelligence community. Hardly surprisingly, directors of central intelligence spent most of their time running the CIA, for that was the source of their troops – and their troubles when they arose. A score of blue-ribbon panels over 50 years had recommended breaking the director of central intelligence’s conflict of interest – coordinating agencies and their budgets while running one of them – and creating a director of national intelligence position.

Across disciplines, integration means better aligning what information intelligence agencies collect with what analysts need.

How integration works

The National Intelligence Council is organized like the State Department, with officers for regions and functions. Once a question has been presented, the relevant national intelligence officer will convene his or her council colleagues from the other agencies. They will argue about the answer to the question, a process sweetly called “coordination,” then agree on the answer. If need be, the process can be done in a few hours. Major strategic analyses – national intelligence estimates – like one done in 2022 on the implications of the COVID-19 pandemic out to 2026, may take months. In all cases, though, the analysis carefully records where there are differences of view in the intelligence community.

Resolutely nonpolitical stance

What was striking then and has struck me both times I’ve had the privilege of running a U.S. intelligence agency is the dedication of the officers. They work for the nation, not for a political party or ideology. As chair of the NIC, I had no idea of the politics of my people, save for the several closest to me. For them, telling truth to power is not a slogan. It is what they do. They are always worried about “politicizing” – producing an assessment to suit a policymaker’s preference or, worse, being pressured to do so.

The president’s daily briefers, for instance, give up a year of their lives to come to work at 4 a.m., learn their briefs and then fan out across Washington to brief senior officials. They like being “on the team” of the person they brief, but they become uncomfortable if the conversation turns political. The director of national intelligence sets the tone for that resolutely nonpolitical stance and polices it through principles articulated in the agency’s analytic integrity and standards. As chair of the NIC, for instance, I’d receive regular assessments of both the quality of our analyses and whether we risked becoming “politicized.”

Gregory F. Treverton, Professor of Practice in International Relations, USC Dornsife College of Letters, Arts and Sciences

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Viewpoint: An Invisible Government Agency Produces Crucial National Security Intelligence, But Is Anyone Listening?

Gregory F. Treverton and Robert Hutchings, The Conversation — Thu, 11 Jul 2019 13:00:00 -0400

This year marks the 40th anniversary of a little-known U.S. organization that has provided crucial intelligence and analysis to presidents for all those decades: the National Intelligence Council.

Right after World War II, President Harry Truman understood that the United States was embarking into a new world order and required, in the words of one observer, guidance on “the big job – the carving out of United States destiny in the world as a whole.”

He established a Board of National Estimates deliberately outside the White House, State Department and Pentagon so that strategic intelligence would be provided with a degree of independence and detachment.

As national security scholars and practitioners, we believe it was a wise judgment. In our experience, when intelligence analysts are close to policy operators, the risk grows that assessments will be cut to suit the cloth of policy – a frequent problem with military intelligence.

In the 1970s, the board was transformed into the National Intelligence Council. The board had become too detached and academic, in the view of both the director of central intelligence, James Schlesinger, and the national security advisor, Henry Kissinger.

Schlesinger’s successor, William Colby, replaced the board with national intelligence officers, who later became the National Intelligence Council and took on the role of strategic intelligence analysis, drawing on the work of all the intelligence agencies.

We each served, at different times, as chairman of the National Intelligence Council. Our recent book, “Truth to Power,” chronicles the history of the council, an organization well known inside government but little understood outside, and its involvement in almost all the major foreign policy challenges of the last decades.
Did the National Intelligence Council always get it right? Of course not. As Yogi Berra put it, “It’s tough to make predictions, especially about the future.” And while the council, and U.S. intelligence more generally, would like to always “get it right,” the better standard is whether its work was useful in helping policy move in a wise direction.

On that score, it has played a critical role in supporting presidents ever since Truman’s time, often providing an important check on the wilder impulses of policymakers.

In a dangerous but shapeless world, strategic analysis has never been more important. Yet it is apparent that disdain for analysis has also never been greater than under this administration.

The National Intelligence Council at work

The council now is composed of fewer than 100 analysts, national intelligence officers and their deputies, organized like the State Department in geographic and functional accounts, like terrorism or technology.

When we each served as chairman of the council, if the national security advisor or another senior National Security Council officer wanted to know how “intelligence” assessed a particular issue, the question would go to the council.

The appropriate national intelligence officer would convene his or her colleagues from all the agencies to agree on the answer and produce an assessment. Disagreements would be noted in the assessment, which would first be given to the National Security Council, then often put in a form that, while still classified, could be distributed more widely, including to Congress.

The council is still answering questions, but there is very little process in the Trump administration. The main policy committees, the “principals” (Cabinet officers) and “deputies” (their number twos and threes), hardly meet, and decisions are made by tweet or held tightly by the national security advisor.

The process for the council’s National Intelligence Estimates is similar to writing an assessment, but the point of the exercise is to look ahead, to identify connections among issues and their importance. From start to finish, an estimate can take months to complete. Finished estimates are approved by a meeting of the agency heads, the National Intelligence Board, whose members are the heads of every U.S. intelligence agency.

In 2002, a U.N. weapons inspector checks out a weapon in Iraq. Petr Pavlicek/International Atomic Energy Agency, CC BY

The need for strategic intelligence

Perhaps the council’s most studied failure, the 2002 National Intelligence Estimate on Iraqi weapons of mass destruction, is a case in point about the limitations of intelligence in guiding policy.

That estimate was used to justify a war – not yet ended – in which over 4,000 Americans have died, according to official Defense Department statistics, but Iraq did not turn out to have any of the weapons. The estimate cited evidence, but it turned out not to be evidence of weapons.

Surely, in assessing that Saddam Hussein had weapons of mass destruction, the council got it wrong. But so did virtually everyone else, including the two of us, who nonetheless opposed the war.

Yet the bigger story of that estimate is that it didn’t make a difference to policy. The George W. Bush administration had long before decided on war, according to then-National Security Advisor Condoleezza Rice and then-Deputy Defense Secretary Paul Wolfowitz. And so the most the estimate did at the time was to perhaps provide some cover for skeptical Democrats in Congress who didn’t want to vote “no” to war.

The council did, however, provide good strategic analysis that – if heeded – could have averted policy fiascoes in the Middle East during this same period.

For instance, two of the council’s assessments in January 2003 were cautionary about the planned U.S. invasion and occupation of Iraq.

The first assessed that the war would produce a spike in anti-American terrorist activity and recruitment, while the second noted that occupation would evoke bad associations with earlier foreign occupations of Baghdad, and so needed to be internationalized as soon as possible, presumably through the U.N.

They went unheeded by the Bush administration.

In 2011, the Obama administration participated in the NATO operation in Libya aimed at preventing a bloodbath in Benghazi, Libya’s second-largest city. The administration did not heed the warnings from intelligence and military leaders that the operation could grow rapidly into a much greater involvement in that country’s political problems.

The operation quickly and predictably expanded from a limited humanitarian intervention into a much broader campaign to overthrow the regime of Moammar Gadhafi, which led to even more civilian casualties.

President Obama later called this his “worst mistake,” acknowledging that he was at fault for “failing to plan for the day after” the intervention. At least he wished he had heeded cautionary assessments.

We have both witnessed how presidents and Cabinet officers often don’t want strategic analysis. They have ascended to senior positions because they have (or want to project) a high degree of self-confidence and self-assurance. They don’t like their pet projects subjected to critical scrutiny.

But under President Trump, this has become a much more acute problem. Intelligence community judgments that North Korea would not give up its nuclear weapons and that Iran was in compliance with the 2015 nuclear deal were wholly ignored by the Trump administration.

Policymakers understandably want intelligence analysis to support their policies. But whether they know it or not, they also need intelligence as a somewhat detached check on their ambitions.

This post originally appeared at The Conversation. Follow @ConversationUS on Twitter.

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Moving Targets

Gregory F. Treverton — Sat, 01 May 2004 00:00:00 -0400

Terrorists are everything the Soviet Union was not, and intelligence agencies are struggling to get a bead on them.

In a small room in a super-secure building, a young intelligence analyst surrounded by a bank of computers practices a primitive sort of information sharing. He rolls in an office chair from screen to screen, harvesting top-secret information produced by several of America's finest spying operations. This "wheeled fusion" is the only way the analyst can combine, compare and manipulate information from across the intelligence community.

As the threat of terrorism advances and the Cold War recedes further into memory, America's intelligence agencies are struggling to adapt to a world different in every way from the one they had known. Everything has changed: the nature of the threat, the sources of information, the technology they use and the "customers" they serve. So far, the innovations to address those changes, especially in analyzing intelligence, are being pursued gingerly by small groups that are more tolerated than encouraged by senior leadership.

During the Cold War, intelligence agencies focused on nation-states; nonstate or "transnational" actors were secondary. Now the priority is reversed and the principal targets are nonstates such as al Qaeda. States are of interest as facilitators of terrorism, willingly or because they lose control of their territory.

We know what states are like, even states that are very different from our own. They are organized in hierarchies. Intelligence and policy officials share an understanding of states. There is much less shared understanding of nonstates, which come in many sizes and shapes and combine network and hierarchy. As a result, understanding them is more elusive and more outcomes are possible than was the case for states.

Many state targets were, like the Soviet Union, secretive. Information was in short supply, so pride of place went to secret sources of intelligence. Terrorist groups today are hardly open about their plans, so secrets still matter. But signals about terrorists and their weapons can be ferreted out of the vast databases of customs declarations, motor vehicle records and the like, as well as from the noise of Web chat rooms.

The Soviet Union was not only hierarchical but also ponderous and predictable. Al Qaeda has shown itself to be nimble and unpredictable. New groups, new weapons and new modes of attack crop up frequently. In the circumstances of the Cold War, the way intelligence agencies are organized made some sense. Collection and analysis were "stovepipes," the collectors organized by intelligence source, or "INT" (signals intelligence, or SIGINT; espionage, or HUMINT; and imagery, or IMINT), and the analysts by function or geographic region. In effect, all were asked what they could contribute independently to solving the puzzle of Soviet behavior. In understanding terrorism, by contrast, the need for collaboration is much greater, not only across sources or specialties in federal intelligence agencies, but also with foreign partners and with state and local officials.

Similarly, during the Cold War, the customers of intelligence agencies typically were limited to federal government officials, and intelligence mostly contributed to broad policy choices. Now intelligence must serve a much wider range of customers-ranging from foreign partners of the United States, to state and local law enforcement authorities, to private citizens-many of whom need continuous intelligence as a basis for their ongoing operations.

Cold War to Terror War

During the 10-year lull between Cold War and terror war, intelligence budgets declined and agencies' deep expertise on the Soviet Union dispersed. At the same time, intelligence agencies needed new customers and new missions. They found customers, especially in economic agencies like the Commerce Department. But they were interested in immediate support, rather than long-term analysis. With more customers and fewer resources, intelligence agencies were hard-pressed to keep up with the flood of short-term questions they were asked. Intelligence agencies are in the service business, so turning away new customers or shucking off old ones is painful. Rather than refusing some requests, intelligence agencies reduced their focus on and thereby their capacity for deep analysis.

The dominance of question-answering is pervasive, even where it would not be expected. Military intelligence agencies, for instance, report spending as much as half their time answering specific, usually short-run, questions instead of doing their traditional job of assessing potential U.S. foes. The CIA's crown jewel of analysis, the President's Daily Brief, is jokingly referred to as "CNN plus secrets." It is very current, often little more than a new piece of secret information with some analyst commentary to put it in context.

The intelligence community must continue answering immediate questions, but it also must open space for long-term thinking. In an era of terrorism, both will require dramatic changes in the way intelligence agencies do business. They must reach out to a much wider variety of sources. In a world of secret sources, analysts had to be separated from intelligence collectors; in the world of the Internet, analysts have become collectors. In the world of secret sources, analysts were mostly passive users of information that was delivered to them. Now, they must actively search for and question data, something that comes naturally to people who have grown up using Google.

In solving puzzles about the Soviet Union, analysts worked alone or in small groups. In trying to understand terrorism, they have to work in large virtual networks across specialties and agencies. Answering questions from a variety of customers might best be done by generalists such as intelligence agencies employ, but long-term understanding requires interaction with deep specialists who often work outside the intelligence community. Analysis of the Soviet Union did not make much use of formal tools or methods, except in some technical areas. Analysts tended to operate on the basis of their experience or that of their immediate work unit. Previous assessments or patterns were the point of departure and analysts tended to look for information to confirm those patterns. This tendency was abetted by time pressure, which drove analysts toward rapid conclusions.

Today, analysts have to make more extensive use of method and technology-from aggregating expert views to Internet searching, data mining and pattern recognition. Data has to be scoured not only for confirming evidence, but to find what is out of the ordinary. The key analytic choices remain with analysts, but technology holds in memory rejected hypotheses and previously discarded data. It also notices what analysts are watching and what questions they are asking, and will use that information to suggest sources of information and to refine searches.

Piecemeal, but Promising

The needs of the future are not lost on U.S. intelligence agencies. Yet the press of the present is so intense, and the legacy of the past is so powerful, that innovations have been piecemeal, though promising. Several examples suggest the range. In one case, the CIA's Sherman Kent Center, an in-house think tank for intelligence analysis, has been working with the RAND Corp. to apply techniques of alternative analysis to terrorism and other transnational issues. Alternative analysis seeks to challenge assumptions and to broaden the range of possible outcomes considered. Its purpose is to hedge against "group think," or premature consensus, and the natural tendency for analysts to search too narrowly, looking more intently for information to confirm their prior hypotheses than for data to discredit them.

The CIA's initiative has engaged experts not only in trans-national issues (from both inside and outside the intelligence community) but also from a range of fields, such as cognitive psychology, psychiatry, organizational decision-making, product innovation, investment analysis and diplomatic history. In the case of Iraq, alternative analysis might have leaned explicitly against the preconceptions of analysts (not to mention policy officials) by trying to assemble the best case that Iraq did not have weapons of mass destruction.

Instead of the traditional analytic process, understanding terrorism involves what Karl Weick, an eminent psychologist at the University of Michigan, calls "sense-making." Knowledge is not something people possess in their heads; rather, it is something members of an organization do together, perhaps even by sharing hypotheses aloud. The objective is to connect the dots on a continuing basis, knowing all the while that the nature and position of the dots are in constant flux. Instead of deep expertise in a particular slice of a problem, sense-making requires lots of eyes examining data for emerging threats. For instance, while radiologists saw evidence of broken bones in children for many years, only when social workers teamed with radiologists and pediatricians in the 1960s did child abuse become a diagnosis.

A compelling example of innovation at the tactical end of analysis is called multi-INT, merging information from more than one intelligence source, and doing this again and again quickly. In one sense, multi-INT is not conceptually different from what intelligence agencies call "fusion" or "all source analysis." But recently, in Afghanistan and Iraq, it has involved analysts from the National Security Agency, handling signals intelligence, and the National Geospatial Agency, handling images, working in networks to permit very rapid responses to questions about the locations of possible foes or surprises.

In principle, multi-INT could be done within a single form of intelligence, or even a single organization. In the summer of 2001, for instance, the FBI agents in Phoenix who were interested in Zacarias Moussaoui's flying lessons did not know that their colleagues had been monitoring the same school two years earlier on suspicion that Osama bin Laden's pilot had trained there. The FBI did not know what it knew. In this case, multi-INT might quickly have brought to bear on the Phoenix office investigation what the FBI already knew about the school.

Sucking Up Data

There's certainly no shortage of tool building for analytic tasks within the intelligence community. The CIA has In-Q-Tel, a high-tech venture capital fund, and the Advanced Technology Programs, a seed-bed for new technology in analysis. ATP's counterparts at the level of the intelligence community are the Advanced Research and Development Activity, for technology broadly, and the Intelligence Information Innovation Center, for information technology in particular. The biggest kid on the technology block is the Defense Advanced Research Projects Agency, whose projects run well beyond intelligence. Its intelligence initiatives are focused on mining large data sets, remembering discarded hypotheses and seeing new patterns, and providing analysts with better ways of working together. So far, however, these efforts have been scattered and too often driven by technology.

With no clearinghouse for matching what analysts want and what technology can provide, there is the risk that innovations will not be fused to provide real advances in analytic methods. And intelligence agencies will have to recognize, as Silicon Valley has, that technical innovations that confer advantage are fleeting. If advantage is to be maintained, then the cycle for producing innovations must not only be more efficient, it must be shorter.

On the intelligence collection side, the terrorist threat is compelling agencies, the FBI and the Homeland Security Department in particular, to think of their officers as "embedded collectors," that is, as employees performing other jobs, such as pursuing criminals or patrolling the border, but also in position to gather information about what is out of the ordinary. Before Sept. 11, FBI agents collected a lot of information, but concentrated on the portion that was immediately relevant to the specific case they were investigating. As embedded collectors, they would recognize that the information they collect has value beyond a single case and to others, if not immediately to them. In addition to the FBI, DHS has 18,000 agents in Customs and Border Protection, 15,000 employees in Citizenship and Immigration Services, and 39,000 full-time and 6,700 part-time screeners in Transportation Security-all potential intelligence collectors. And that's not including the 600,000 officers in state and local law enforcement.

Homeland Security has no mandate to gather intelligence, indeed the word "collection" remains taboo-but the capacity is there. To be sure, the notion of embedded collectors raises a host of civil liberties issues: When does unusual behavior become grounds for suspicion, let alone recording? Moreover, collectors must know what to look for and how to pass on what they see. Gilman Louie, president of In-Q-Tel, likens the idea to having a soda straw extending from intelligence analysts all the way down to the cop on the beat. So far, there is no infrastructure for the straw, let alone guidance and policy to govern what should be pushed or pulled through it, in either direction.

Yawning Gap

Some of these beginnings are hopeful, even exciting. But they are small and scale remains an issue. Some, such as multi-INT, probably have to remain relatively circumscribed to no more than several dozen analysts and a total team of fewer than 100. If they became much larger, then security managers might cease to tolerate them, and they would run the risk of becoming less innovative and more like the bigger, more bureaucratic traditional processes.

Nevertheless, the need to work broadly across organizations to understand terrorism runs into existing stovepipes. A proposed solution is to create "edge organizations," which would be virtual networked centers created around the edges of existing structures. But how can such edge organizations be formed and empowered? Most of the intelligence community pays lip service to the proposition that analysis should be organized around problems or issues, not agencies or functions or sources. But the big analytic agencies, the CIA and the Defense Intelligence Agency, resist thinking of themselves as providers of analytic troops who could be deployed to do their work elsewhere in issue-oriented and perhaps virtual centers.

Intelligence collectors such as NSA and NGA have begun to reshape their missions from only gathering to hunting and gathering data. They are re-examining the makeup of their workforces, and they've discovered that data hunters might have to be different from gatherers in background, temperament and training. Traditionally, the two agencies' initial processing and analysis of data were driven by the type of information they collected. Data gathering will continue in order to populate databases, for example. But the hunters, those who will reach out for data across data sets and various types of intelligence, will need different skills.

In the end, the biggest obstacle to change will be the intelligence community's security policy, which tightly compartmentalizes information and shares it only among those who have a need to know. Understanding terrorism requires sharing information, not cosseting it, and giving it to precisely those who don't have a need to know. For security reasons, some of the most interesting multi-INT experiments have not been virtual, but rather have depended on place in the manner of "wheeled fusion." Only when small and experimental could they could get license to operate within the security fence, sharing information in ways that the originating agencies probably would not have permitted on a larger scale.

From the outside, the security issues look daunting, but insiders seldom mention them. They are so used to them that they hardly notice, a sad indicator of how hard change will be. In one sense, the problem of security is less pressing now, at least in principle. During the Cold War, intelligence was very dependent on a small number of collectors, so exposure of any one of them was deeply damaging. Arguably, that is less true now with much more information available and many, varied targets of intelligence gathering. Yet there remains a yawning gap between diagnosing the problem and framing solutions to reshape intelligence to understand the terrorist threat.

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The State of Federal Management

Gregory F. Treverton — Thu, 01 Jan 2004 00:00:00 -0500

Under pressure from Congress, political leaders and independent examiners, managers are more focused on results than ever.

t a hearing on Capitol Hill in 1968, a member of Congress summarized then-Postmaster General Lawrence O'Brien's managerial circumstances as "no control over your workload . . . no control over wages and . . . limited control over workplace conditions." O'Brien was taken aback but agreed, adding that if his constraints had been put that succinctly earlier, "perhaps I wouldn't be sitting here."

O'Brien's remark is a reminder that management in the public and private sectors is alike in all the unimportant respects. Most obviously, managing in the public sector is conducted in the glare of politics. Michael Blumenthal, who ran Bendix Corp. before serving as Treasury secretary, said once that in the private sector if he took time off to play golf, he was complimented for effectively delegating responsibility. If he did the same in government, he was accused of shirking his responsibility.

The unspoken truth at the heart of all efforts to improve government management and efficiency is that government wasn't designed to be efficient. It was mostly designed to be accountable, to advance social goals and to avoid fraud, waste and abuse.

Yet interest in better performance has grown. If Americans seemed, until Sept. 11 at least, to answer the question, "What do you want the federal government to do?" with a simple "less," at least they wanted that less to be done better. The quest to devise measurable indicators of results was codified in the 1993 Government Performance and Results Act (GPRA), and it has been reflected in the Clinton administration's Reinventing Government initiative and the Bush administration's President's Management Agenda. It is having some effect. The state of federal management has improved and is improving, as data on outputs, if not social outcomes, gets better and managers are impelled to pay more attention to them.

That trend has been reflected in the Federal Performance Project, conducted by Government Executive over the past four years in partnership with the Pew Charitable Trusts and with, first, Syracuse University's Maxwell School of Citizenship and Public Affairs, and later, The George Washington University Department of Public Administration. Under the project, agencies were assigned letter grades in five management areas: finance, human resources, information technology, capital assets (when it was relevant), and a broader category called managing for results. The project tried to focus on outputs, an approach that won generally high marks from observers. At first, the five functions were given equal weight in grading the agencies, but in the third year the project switched to basing half the grade on managing for results.

Not all the interest in results that produced that shift comes with a generous spirit, for "bad management," like "waste," is a handy stick to be used by those who simply don't like particular government programs. Yet a wide range of interviews conducted for this article-with evaluators of programs and those evaluated, along with informed observers-uncovered a good will that would surprise many Americans. Managers are capable people, and they want to do better, which is less of a surprise than it would seem to most Americans. After all, if we may be suspicious of the public service yearnings of the big political contributors who want to be U.S. ambassadors abroad, it takes another kind of man or woman to want to run the Internal Revenue Service.

All of the top officials whose agencies have been evaluated by the Federal Performance Project were political appointees. But most were actually qualified for their jobs, in training or experience. James Lee Witt, who managed a dramatic turnaround at the Federal Emergency Management Agency, had run disaster relief for Arkansas before his 1993 appointment; none of his predecessors had any such experience. Kenneth Kizer, a doctor who had run California's Health Services Department, took over the Veterans Health Administration in 1994. Yet his sweeping changes hardly earned him a hero's medal; quite the contrary, he was denied renomination for a second four-year term in 1998. The Administration for Children and Families' Olivia Golden, the Federal Housing Administration's William Apgar and Doris Meissner of the former Immigration and Naturalization Service, were academic specialists in the material they came to manage. The IRS' Charles Rossotti had built a technology company.

Those committed leaders struggled to do well in the context of mixed and changing signals about their agencies' missions from their authorizers, especially Congress but also public constituencies. They managed in tight boxes akin to O'Brien's-with outmoded technology, fragmentary measures of performance, weak systems for connecting money to purposes, and rigid personnel systems with an age distribution that threatens droves of imminent retirements. Yet the attention to results was great and growing, and the constraints of those boxes were loosening.

EVALUATING MANAGEMENT

The rub in any evaluation of results is that it is easier to measure inputs than outputs, let alone outcomes in society, and the chain linking inputs to outputs seldom is clear. For instance, the nation wants fewer hungry people-an outcome-but the information the Agriculture Department knows best is how much it spends on food stamps-an input. It might be able to measure how many stamps it delivers-an output. Yet do more food stamps delivered indicate more people fed or more hungry ones who need food? Even some input measures can be misleading. Clean audits of an agency's financial systems, for instance, look like a sign of good fiscal management, but not if they are achieved only by applying brute force at audit time in manually working around deficient systems.

Moreover, while the evaluations that exist overlap, they are not directly comparable, so developing a complete picture of how well or poorly the government is doing is no mean feat. The most comprehensive evaluations are done by the Office of Management and Budget. Because OMB's reviews are connected to decisions about agency budgets, managers consider its efforts the most significant. That was not the case in the past, when OMB's evaluation efforts were regarded as box-checking exercises conducted by junior officials.

The first evaluation method used by OMB in the Bush administration is the scorecard for departments and large agencies produced under the President's Management Agenda. In scoring Cabinet departments, the effort differs from the Federal Performance Project, which focused on agencies, regarding most departments as sprawling confederations of very different organizations, with management processes too varied to assess as a whole. OMB awards red, yellow or green lights in five management categories: strategic management of human capital, competitive sourcing, improving financial management, expanding e-government, and integrating budget and performance. It gives each department two ratings, one for overall performance and one for progress in implementing each of the initiatives. It thus tends to focus on inputs and to compare performance to previous history, not outcomes.

The other OMB evaluation effort, known as Performance and Management Assessments, is more results-oriented. It addresses programs, not departments or agencies, and thus takes a smaller bite than the Federal Performance Project. Still, when scores can be compared, they are broadly similar, and, indeed, the OMB scorings occasionally refer to Federal Performance Project assessments. The Social Security Administration and the National Weather Service have scored highly, while the IRS and the Immigration and Naturalization Service (which has been split up and moved into the Homeland Security Department) have fared poorly. OMB begins with program purpose and design, then looks at strategic planning, program management and finally at results and accountability, with the last accounting for half the total score. In looking at results, OMB explicitly compares the program being scored with similar programs elsewhere; for the National Weather Service, that means asking how it compares to Navy and European weather forecasting organizations.

These evaluations tend to focus more on how agencies are being managed than on how employees on the front lines view their organizations' performance. But surveys and interviews suggest that the appetite for innovation is greatest at the top and the bottom of agencies-in leaders and in the newest professionals. In between, middle managers are more likely to be operating on autopilot, tending to view any change in terms of its impact on the budgets they defend, and to be beaten down by years of trying to manage in the tight boxes they inhabit.

A survey issued in 2000 by the General Accounting Office provides evidence for that view. In the survey, GAO asked more than 3,000 managers in 28 agencies how they perceived their agencies were doing at instilling a performance-based culture. Overall, the results were dreary. At 11 agencies, fewer than half of the managers perceived a strong top leadership commitment to achieving results. At 26 agencies, fewer than half perceived that employees received positive recognition for helping their agencies accomplish their strategic goals.

While more than half of the managers at 22 agencies reported that they were held accountable for the results of their programs, at only one-the Office of Personnel Management-did a majority report that they had the decision-making authority they needed to achieve their goals. On an agency-by-agency basis, the survey's results overlapped only in part with the Federal Performance Project or OMB's efforts. Where comparison was possible, the results were parallel. The Forest Service, IRS and the Health Care Financing Administration (now the Centers for Medicare and Medicaid Services) tended to be at the bottom of each set of rankings, with Social Security and NASA toward the top and the Federal Aviation Administration in the middle.

Not surprisingly, how officials whose efforts were graded in the Federal Performance Project felt about the process depended on their score, when the reports were issued and, especially, how exposed their agencies were politically. For Olivia Golden, the evaluation came at the end of her tenure and was a welcome chance to put her story together and tell it. For her and many other officials, any attention to government performance absent a crisis was welcome. Also, having worried that the assessment would be naturally biased toward "harder," more measurable services such as Coast Guard rescues or Social Security telephone inquiries, Golden was pleased to find a receptive hearing for the Administration for Children and Families' "softer" services.

For another social services manager, who asked not to be identified, the Federal Performance Project was both too much and too little. It was too much because he knew his agency was badly managed but could not persuade Congress to provide either authority or money to fix many of the shortcomings. Moreover, he thought, any review, no matter how well-intentioned, was bound to produce a "bad management" stick for use by those on Capitol Hill who simply did not favor government assistance to poor people. On the other hand, the report was too little because he felt he didn't learn much and instead spent considerable time getting the reviewers up to speed about his agency. He deemed similar reviews by the National Academy of Public Administration or GAO more helpful because they were deeper and more interactive, and resulted in specific recommendations.

For the INS' Meissner, all of the evaluations were less helpful than they might have been because they did not vividly capture a particular manager's context. In her case, not only was the agency's mission ambivalent and its congressional oversight complicated, but it was undertaking major reforms as it was growing as rapidly as the World War II Pentagon-hardly easy circumstances in which to manage.

For the Coast Guard's Capt. Mark Blace, the Federal Performance Project was a target of opportunity to begin to weave a strategic view into a very tactical agency culture. The Coast Guard volunteered to be part of a pilot test for the project, then was evaluated two years later. So agency leaders had an incentive to construct a vision and try to achieve it. That process helped the Coast Guard draw a map from inputs to outputs, rather than simply projecting forward from existing activities. For instance, officials realized they did a good job of tracking the distress calls the Coast Guard answers, but were less focused on the mission of avoiding rescues in the first place by promoting water safety.

It is, of course, impossible to parse out the effect of any evaluation process, but the cumulative effect of various performance measurement efforts, starting with the Government Performance and Results Act, has clearly made a difference. Maurice McTigue, a former New Zealand Cabinet minister who runs the Mercatus Center at George Mason University, which focuses on agency accountability, says his discussions with federal chief financial officers move quickly from what they disclose to how they plan and measure results. They are competitive, wanting to look good and do well, and so they are willing recipients of suggestions. As a result, McTigue and others say, the concept of accountability is shifting from how money is spent to what is accomplished in the public interest.

MANAGING...TO DO WHAT?

The art of managing for results in government involves bringing into harmony three sides of a triangle: goals, institutional capacity, and authorizing environment. For a manager, that means answering three questions: What am I supposed to do? What is my agency capable of doing? And, critically, what will Congress (and my superiors or constituencies) allow me to do, or at least tolerate my doing? For their part, private sector managers usually can take goals as given, and while they must deal with intrusions from the "authorizers" in government and occasionally among their boards or shareholders, most of the time they are left to try to build organizational capacity to meet goals. They can be preoccupied with one leg of the triangle.

In government, however, effective management is difficult unless the three legs of the triangle are in tolerable alignment. The critical element in that process is not personal leadership-though that matters-but whether or not an agency's goals and mission are clear and supported by its authorizers. The Social Security Administration got the only A grade in the first year of the Federal Performance Project, which was a tribute to its efficiency, especially in adapting new information systems to serve its clients. Yet its goal is clear and clearly supported by both its constituencies and Congress: Get information and benefits checks to people who are entitled to them. The Weather Service, graded tops in the 2001 survey, also has a clear mission, one it translated into "no surprises" and then into more specific goals for warning times about storms.

At the other extreme, the INS ranked at the bottom the first year, despite a doubling in its budget over the previous half decade. Its many problems began with a split in its authorized mission. On one hand, the agency was supposed to keep illegal immigrants out of the United States. But on the other, it was charged with helping legal immigrants to become citizens and receive federal benefits. So, too, the Forest Service is charged with both preserving public lands and producing resources from them.

Sometimes, the problem is that Congress and the public keep changing their minds about agencies' missions. The IRS, for example, seems to have a clear-cut job: collect taxes from those who owe them. Yet when the agency sought to close the gap between what was owed and what was paid, by employing performance measures to increase collections, its tactics earned it a beating on Capitol Hill in 1997. Congress prohibited the IRS from using those measures. But then, predictably, by 2002, members of Congress were looking at declining IRS tax collections and criticizing the agency for going soft on tax cheats, and by 2003 the incoming IRS commissioner made going after them his top priority.

The same fate befell the Veterans Health Administration when it sought to restructure itself to serve a client base that was moving south and west, and with ills more likely to be caused by poverty and old age than combat-and thus more likely to need clinic and nursing home care than long stays in hospitals. Yet closing VA hospitals removed local icons of government beneficence-icons that employed people in various congressional districts-so communities and their representatives fought the closures.

In other cases, the sheer complexity of the authorizing environment creates headaches for managers. EPA received a decent grade (B-) in the 1999 Federal Performance Project, despite its authorizing handicaps. Cobbled together out of dozens of pre-existing programs, it is overseen by more than 40 committees and subcommittees of Congress. That legacy has forced EPA to operate in rigid stovepipes-focused on air, water, toxins and other pollutants. Decentralization into 10 regional offices was both a blessing and a curse. It made for responsiveness in addressing local circumstances, but the regional administrators became barons in their own right-and ones who also had to act through the stovepipes, so coherent national initiatives were doubly difficult to implement.

PEOPLE, MONEY AND TECHNOLOGY

The second leg of the triangle, capacity, also is important in government. So the attention to management inputs-such as staffing levels-is hardly beside the point. As a veteran of the Clinton administration's National Performance Review put it: "When we recommended that agencies take on downsizing by cutting headquarters more than field operations, many couldn't do it. They didn't have the human resources tools." For public agencies, as for private corporations, the most important element of capacity is their people. But unlike their private sector counterparts, many public agency heads manage in the presence of strong unions, rigid personnel systems, and employees who are drawn to their jobs partly by a desire for job security.

For agency heads, managing the capacity leg of the triangle means being creative in working around rigidities in the personnel system. The FAA, where labor relations had been embattled since the air traffic controllers' strike of 1981, used personnel flexibility granted by Congress to negotiate a five-year agreement with its union in 1998. By 2002, three-fourths of FAA employees worked under a pay-for-performance system. The FAA's top managers, the equivalents of Senior Executive Service members elsewhere, forgo raises based on length of service and instead get cash bonuses of up to a quarter of their salaries if they meet performance goals.

More recently-and dramatically-the Homeland Security and Defense departments have been freed by Congress from many civil service constraints. Soon, more than half of the civilian employees of the federal government will not work under traditional civil service rules. Their managers now have much more latitude in rewarding performance. With authority, however, also comes accountability, and across the government managers already have more latitude in personnel practices than they actually use.

In addition to managing the human resources challenge, many effective agencies have become very creative in dealing with funding issues. The one bright spot by 2002 in INS's otherwise dreary management picture was on the services side, where offering faster processing of visas for a $1,000 fee enabled the agency to hire more people, do more training and acquire better technology. Likewise, the National Park Service's authorization to charge recreational fees enabled it to make a dent in its maintenance backlog. And after the Food and Drug Administration was authorized in 1992 to collect fees from pharmaceutical companies, it cut drug approval times in half by 1999.

Likewise, effective procurement, especially of information technology, is a vital part of building capacity. Using authority given it in 1996 to operate outside ordinary procurement rules, the FAA was able to buy 22 central computers for monitoring flights in just 18 months.

Most government IT managers have shown they can get the job done, but find it much harder to demonstrate the returns on IT investments. When the INS sent student visa approvals for two of the Sept. 11 hijackers several months after the attack, it provided graphic testimony to the agency's continuing information woes.

MEASURING IMPROVEMENT

As the Federal Performance Project went on, it attempted to assess whether agencies were showing success in achieving better performance. In 2002, the project revisited six agencies it had first graded in 1999. Three had improved, while the other three had worsened. The biggest success story was the FAA, though its improvement was tempered by its evident failures in the Sept. 11 disaster. It took, for instance, six years to draft regulations to require better training and higher standards for the private firms that were responsible for screening at airports. The IRS also was a success story. The blowup with Congress in 1997 gave its leaders the chance to reshape the agency. Rossotti replaced the agency's 33 geographic baronies with four business units aligned with sectors of the tax-paying populations.

The two worst failures were both mostly a case of "more of the same only more so." The INS, for instance, grew in budget from $1.5 billion in 1993 to $5.5 billion in 2002, and in personnel from 18,400 to 36,400. Yet there still were only 2,000 investigators available to track the estimated 9 million illegal immigrants already in the country. And the agency's enforcement mission remained 180 degrees removed from its service one. Even on the enforcement side, its real mandate was not what it seemed. "Prevent illegal immigration" turned out not to be license to pursue illegals. Rather, INS' real mandate was shaped by communities along the border, which wanted that border to be safe and controlled.

The Social Security Administration, tops on the Federal Performance Project's list in 1999, stayed atop the 2002 list, but its grade dropped from an A to a B. The reasons lie between the goals and authorizing environment legs of the triangle. SSA continued to do what Congress wanted and what it had the institutional capacity to do. It was faulted, though, for ducking the riskier task of engaging in the policy process. Like the FAA with regard to airport security, SSA was missing in action in the debate over how to ensure the financial future not just of Social Security but of the Americans who are served by SSA's programs.

WHAT AMERICANS WANT

Last summer, the second Volcker commission, formally the National Commission on the Public Service, outlined a bold agenda for measuring the past and imagining the future of the federal government:

Organize the government into a smaller number of mission-oriented departments like Homeland Security.
Get much better leadership in government.
Enhance government performance.

Ultimately, the form of the government of the future will be determined, as always, by Americans' answer to the "What do you want from government?" question. The events of Sept. 11 changed the country's answer-leading, for example, to the nationalization of airport security-though only time will tell how much. Surely, though, the new answer will not be "more of the same." During the Cold War, there was neat one-to-one correspondence between the threat and the institutions-mostly government and mostly federal government-that were developed to deal with it. To be sure, contractors and citizens were involved, but for most Americans, fighting the Cold War meant simply paying their taxes.

Now, by contrast, the threat is more diffuse. So will be the ways of dealing with it. The war on terror will be fought with local police as much as federal armies. It will be fought multilaterally, with coalitions cutting across nations and across the public and private sectors, with the government providing carrots, sticks and, mostly, sermons. Private citizens will be much more engaged, and, as the intrusive security procedures at airports suggest, they may have to change their behavior much more than they did during the Cold War.

There were hints of new forms of public-private partnership in the Federal Performance Project assessments. The Food Safety and Inspection Service, for example, shifted from "poke and sniff" inspections to working with food producers to develop and monitor inspection processes. But again, progress was limited: The requirements of the new partnership were seen as threatening by inspectors, only a quarter of whom had college degrees.

The teething problems of the Homeland Security Department have been understandable in trying to assemble a large department from a number of pre-existing pieces with different organizational cultures. Yet it is not clear that in the end whether "homeland security" is much clearer a mission than "defense" or "health and human services." Nevertheless, the government may well be streamlined, as the Volcker commission recommended, into a smaller number of more mission-oriented agencies, of the sort that tended to perform best in the project's surveys. That is likely to happen less by conscious choice than by the force of competition, as agencies move toward their core missions, privatizing or otherwise shucking off ancillary activities.

The circumstances of the war on terrorism do offer opportunities to bring new talent into government, as the Volcker commission seeks, but doing so will require rethinking not just hiring but careers and the laws that shape them. A recent RAND study looked at the requirements of leadership across the government, for-profit and not-for-profit sectors. The study found not so much shortages of particular skills-though the government did report some such shortages, given its relatively low pay and constraints in reaching out for talent. Rather, all three sectors reported that the nation is producing too few future leaders who combine substantive depth with international experience and outlook. So, too, managers with a broad strategic vision in a rapidly changing world are in short supply.

The practices of existing organizations do not produce such leaders-quite the contrary. That is most striking in the federal government, where lateral entry from other sectors is almost nonexistent, except at the top. In the short run, the answer for government is to seek much more flexibility to acquire talent laterally and for short periods. The government will continue to be hard-pressed to compete for talented professionals, such as top-flight economists.

Over the longer term, dramatic changes in patterns of leadership in government will be required. Under such a system, talented people would pursue "portfolio careers": They would be government officials one year and private sector executives the next. But that vision runs smack into U.S. procedures for political clearance in the short run and conflict-of-interest legislation in the long term. The logic of the future suggests that those conflict-of-interest provisions are outmoded, but that may not be the logic of politics-at least not soon.

The third Volcker commission recommendation was to develop new ways of enhancing the performance of the government. If agencies were more tightly organized around missions, their success would be easier to measure. The future seems likely to be "government by market," but of a special kind, with the emphasis on the "best provider." As the Volcker commission emphasizes, the federal workforce has shifted from clerks to specialists. Functions will move from public to private, to partnerships between the two, and back again.

It will be more and more necessary to spell out why government does much at all. The Social Security Administration earns high marks for customer service and getting checks out, but lots of private companies also do those tasks well. SSA is efficient at serving customers, but then so is Wal-Mart, and Wal-Mart comes with potential "offices" almost everywhere. If Disney runs theme parks, why not national parks, where so much is outsourced already?

The federal civil service of the future will be smaller in people, if not budget, with much more flexibility in hiring and rewarding those people. The lines separating the civil service from private employment will blur, as not just people but functions move from one sector to another. But procedural and legal constraints will remain. How formidable they are will depend, ultimately, on how distrustful Americans are of all large institutions, public and private.

Gregory F. Treverton is a senior analyst at RAND and associate dean of the RAND Graduate School. He was vice chair of the National Intelligence Council during the Clinton administration. His most recent book is Reshaping National Intelligence for an Age of Information.

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Time to Spy in America

Gregory F. Treverton — Mon, 01 Sep 2003 00:00:00 -0400

The need for information extends beyond following individuals. It requires gathering foreign intelligence domestically.

t is time to contemplate creating a separate domestic intelligence agency with independent oversight.

The arguments for a separate domestic intelligence agency are three-capacity, need and accountability. In terms of capacity, the FBI is likely to remain-and perhaps should remain-primarily a law enforcement organization.

The need for information extends beyond simply following individuals. It also requires gathering foreign intelligence domestically-finding out what is being said on the streets and in the mosques of cities at home as well as around the world. The Sept. 11 terrorists not only trained in Afghanistan and used European cities as staging areas, but they also mixed in easily in the United States.

The need for domestic intelligence means that the last generation's solution to the vexing issue of accountability cannot be today's. In the mid-1970s, the nation's first-ever domestic intelligence investigations were fraught with abuses of the rights of Americans, especially in a perilous mixing of domestic intelligence and law enforcement at the FBI during J. Edgar Hoover's long tenure as director. The justification for and ostensible focus of these counterintelligence programs, COINTELPRO in bureau parlance, was hostile foreign intelligence services. But most of COINTELPRO's targets were American citizens in civil rights and anti-war groups.

As a result of such investigations, the FBI's domestic intelligence activities were sharply restrained, and the wall separating intelligence from law enforcement was built higher. Now, the nation can no longer afford to refrain from domestic intelligence, nor to suffer the ragged cooperation between intelligence and law enforcement that was the backdrop to Sept. 11. The new Terrorist Threat Integration Center can be a useful step in improving cooperation between the two. But it is meant to better connect the dots in understanding the terrorist threat, not to be a domestic intelligence service.

The lesson of COINTELPRO is that dangers to democracy can arise from mixing domestic intelligence with law enforcement in a single agency. A separate agency with independent oversight is vital to better intelligence work and a safer democracy.

The new Homeland Security Department would be the logical place for such an agency, though the attorney general should have some oversight responsibility, as he does for other intelligence agencies. The congressional intelligence committees should oversee the entire agency, in contrast to the current approach, in which oversight of the FBI is split. The intelligence committees oversee only the intelligence operations at the FBI, and the rest of the bureau reports to other committees.

A single point of oversight would reduce the chance of another COINTELPRO fiasco by clarifying who is in charge. It would diminish the risk involved when operations require mixing intelligence and enforcement in ways that aren't fully disclosed to committees with separate mandates, and with different access to secret information.

Since we have yet to fully calibrate the terrorist threat, it would be wise to take some time to reflect on the risks and value of creating a homeland security intelligence service. The general sense is that terrorism against the United States will be serious but not on par with the threat faced by Israel. Thus, the nation will not be forced to shift the balance between liberty and security as far toward security as Israel has had to do.

Gregory F. Treverton is a senior analyst at RAND and associate dean of the RAND Graduate School. He was vice chair of the National Intelligence Council during the Clinton administration, and wrote Reshaping National Intelligence for an Age of Information (Cambridge University Press, 2001).

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Set Up To Fail

Gregory F. Treverton — Sun, 01 Sep 2002 00:00:00 -0400

It's no surprise that the FBI and CIA don't cooperate. We haven't wanted them to - until now.

s the joint House-Senate intelligence committee grinds through its investigation of why intelligence failed before Sept.11, it should not be surprising that cooperation between the CIA and the FBI was ragged at best. We created them that way. Out of concern for our civil liberties, we prevented them from becoming too close. The FBI and CIA sit astride the fundamental distinctions of the Cold War - distinctions between intelligence and law enforcement, between foreign and domestic, and between public and private. The distinctions run deep.

Those distinctions were not imposed by nature; rather, the United States mostly chose them for good, practical and constitutional reasons. They did not serve us badly during the Cold War, but they set us up to fail in an era of terror. Now, reshaping intelligence and law enforcement means not just reshuffling organizations and refashioning their cultures, it means rethinking basic categories of threat and response. In that sense, the proposed new Department of Homeland Security is a first step in a long process, but surely not the last.

Law enforcement and intelligence are worlds apart. That was driven home to me early in the Clinton administration when I was vice chairman of the National Intelligence Council, which brings together all the intelligence agencies to hammer out national intelligence estimates. There was evidence that Iraqi intelligence had plotted to kill former President Bush during his post-presidential visit to Kuwait. In the event, the plot never came close, but the Clinton administration faced a decision about whether to punish Iraq. In examining the evidence, the administration put together a team combining CIA intelligence analysts with FBI and Justice Department lawyers. The interaction was fascinating, but it showed just how different intelligence and law enforcement are in mission, operating code and standards.

Intelligence, what John Le Carré, author of best-selling spy thrillers, refers to as "pure intelligence," is oriented toward the future. It seeks to inform policy-making by interpreting new information in the context of the existing understanding of complex situations. Intelligence agencies live in a blizzard of uncertainty where the "truth" never is certain. Thus, their standard is "good enough for government work." Because intelligence agencies strive above all to protect sources and methods, their officials want desperately to stay out of the chain of evidence so they will not have to testify in court.

By contrast, law enforcement comes after the fact. Its business is not policy but prosecution, and its method is building cases. It strives to put bad guys in jail. Its standard is high: good enough for a court of law. In the Iraqi case, evidence that for intelligence would have been good enough to unleash cruise missile attacks on Iraq was not good enough for our FBI and Justice colleagues, so the team looked again and again at forensic evidence and the "signatures" of bomb makers. Law enforcement knows that to make a case, it must be prepared to reveal something of how it knows what it knows. The nation's premier law enforcer, the FBI, has no real history of analysis; indeed, the word "intelligence" means something different in law enforcement. It means "tips" that will help to find and convict evil-doers. It does not mean presenting a mosaic of understanding to policy-makers.

The distinction between foreign and domestic magnifies the intelligence-law enforcement split. American institutions and practices before and during the Cold War drew a sharp distinction between home and abroad. When he created the Central Intelligence Agency in 1947, President Truman worried openly about a "Gestapo-like" organization, so the CIA was barred from law enforcement and domestic operations. A generation later, in the mid-1970s, Congress' first-ever inquiry into intelligence investigated abuses of the rights of Americans. The Senate Select Committee on Intelligence Activities (which I served as a staffer) was headed by then-Sen. Frank Church, D-Idaho. The most serious of those abuses, which included the harassing of Martin Luther King Jr. along with many American religious and political groups, had emerged from COINTELPRO, a curious mixing by the FBI of law enforcement and intelligence ostensibly for domestic counterintelligence purposes. Our response was to raise the walls between intelligence and law enforcement, for example by creating a special court, the Federal Intelligence and Surveillance Court, to review applications for national security wiretaps and surveillance.

To be sure, turf battles and different cultures also play a role in keeping the CIA and FBI apart. When I first went to Washington in the 1970s to work for the Senate Select Committee, it was literally true that the directors of the CIA and FBI didn't speak to each other. That state of affairs has improved-it could hardly have gotten worse-but still, relations between the two have been rough. The National Security Agency, too, is barred from law enforcement and from domestic spying, so if the trail of conversations NSA is monitoring becomes "domestic"-that is, if it involves a U.S. citizen, corporation or even a resident alien-the trail must end.

The Cold War could draw a distinction between public and private because at the time, national security was a federal government monopoly. To be sure, private companies and citizens played a role, but for most citizens, fighting the Cold War simply meant paying their taxes. That does not seem likely to be so for the campaign against terrorism and for homeland security. Safeguarding critical infrastructures, such as communications or electric power, from terrorist attack means protecting public goods that are mostly in private hands. Across the country, there are three times as many "police" in the private sector as in governments. Thus, private companies will be drawn more deeply into fighting terrorism than they were into fighting communism. The lives of private citizens also will be affected more deeply by anti-terrorism efforts. To the inconvenience of waiting in long lines imposed by security procedures at airports will be added harder questions about whether citizens will be willing to carry national identity cards or let their biometric identifications be taken for special advance screenings as "trusted fliers."

All three of these distinctions-between law enforcement and intelligence, foreign and domestic and public and private-were all too vividly on display before Sept. 11. In its law enforcement role, the FBI failed to share important intelligence with non-law enforcement brethren in government. Focused on domestic crime, the bureau failed to see the threat Osama bin Laden posed within this country. Blocked by the high walls protecting privacy, the FBI couldn't get into the laptop computer belonging to alleged 20th hijacker Zacarias Moussaoui.

An Aug. 23 CIA cable warned of two bin Laden associates who had entered the United States and two others who were expected to attempt entry. Apparently, the FBI did little with the information and also failed to share it with the Immigration and Naturalization Service until the INS already had admitted the other two into the country. Questioned about its failure to follow up, one FBI official said, "If the cable says, 'Don't let them in the country,' and they were already in the country, what's the point of bringing this up now?"

In any event, the FBI failed to locate Khalid Almihdhar and Nawaf Alhazmi, who are said to have been responsible for the jet that crashed into the Pentagon on Sept. 11. On Oct. 18, the Los Angeles Times reported that a simple check of public records and addresses through the California Department of Motor Vehicles would have disclosed the location of the two hijackers who were the subject of the Aug. 23 cable. A check with credit card companies would have shown airline ticket purchases and given their correct addresses.

A State Department official testified that the FBI has refused for a decade to provide the INS with access to its National Crime Information Center Database on the argument that the INS is not a "law enforcement" organization. Nevertheless, the Los Angeles Times reported, an internal FBI review concluded that everything was done that could have been done to prevent the Sept. 11 attacks. Before Sept, 11, the "standard FBI line," according to a source who spoke to writer Joe Klein for an Oct. 1 story in The New Yorker, was that "Osama bin Laden wasn't a serious domestic security threat," presumably because his earlier attacks had been abroad, not at home.

No agency told the Federal Aviation Administration to be on the lookout for the four bin Laden associates, apparently because it was not in the law enforcement business. And nobody told the airlines because they were private, not public.

Meanwhile, Moussaoui had been arrested on Aug. 16 in Minneapolis for a visa violation. FBI agents at the field office suspected him of terrorism and sought, increasingly desperately, to search his laptop computer. They were frustrated in a debate with headquarters about one of those walls between intelligence and law enforcement that had been raised during the 1970s-the Federal Intelligence and Surveillance Court, established in 1978.

Before FISC, presidents had claimed the prerogative of warrantless searches for national security purposes. In a compromise between presidential discretion and civil liberties, FISC created a special secret court in Washington to review requests for covert national security wiretaps and searches by the FBI and NSA. By the FISC standard, however, the "primary purpose" of any search had to be a suspected connection to a foreign power, and the FBI offices disagreed on whether Moussaoui met that standard. The debate continued through Sept. 11, according to a July 7 story in The New York Times.

COOPERATING WITH OURSELVES

Terrorism at home is new terrain for the nation, and so it will take us time to work through the implications of the changed threat. In terms of organization, if the United States were now starting from scratch, it would never re-create its existing intelligence or law enforcement structures. Establishing a Department of Homeland Security is a good first step, but there is no magic organizational solution.

If the Department of Homeland Security has its own intelligence assessment capability, it needs to be a serious one, which means it would need authority to both receive raw intelligence and assign tasks to the intelligence collectors. It would need access to foreign intelligence and to the domestic material that emerges from law enforcement. It would not be simply a departmental intelligence operation like the State Department's Bureau of Intelligence and Research. Rather, it also would serve the broader set of officials, especially in the White House homeland security office.

It would need to be focused on terrorism and be oriented domestically. Of current institutions, the CIA and the intelligence community's Counterterrorism Center, which is located at the CIA, are, for legal reasons, focused mostly abroad. Operators, not analysts, have dominated the center. At present, remarkably, no agency systematically reviews domestic information for intelligence and warning purposes-as opposed to law enforcement; the FBI has only expressed the intention to begin doing so.

The Homeland Security Department's intelligence capacity would link intelligence tightly to warning. Getting warnings too close to operations was a concern after Pearl Harbor was bombed in 1941, but seems the right approach now. In the run-up to Pearl Harbor, Army and Navy intelligence had, apparently, been reluctant to sound the tocsin based on what was inevitably "iffy" evidence. They were close to their operational colleagues and thus knew that it was a costly nuisance for those operators to act on warning-for instance, putting the fleet to sea-if the warning turned out to be a false alarm. The concern is fair, but now the warners (at the CIA, for instance) are so disconnected from those who must act that they are tempted to overwarn-a temptation in evidence this past summer. Moreover, the new assessment capacity will have lots of competition, hence many watchful eyes and differing views to prevent its assessments from being tailored to suit the convenience of Homeland Security operators.

Tom Ridge, the president's homeland security adviser, instituted a national warning stoplight chart with colors ranging from green through blue, yellow and orange to red, the highest state of warning. The idea is based on 20 years of experience in Britain. It is a good one, but the United States lacks Britain's experience, so no one-not state and local officials, much less private citizens-knows yet what the colors mean. With time and experience, the Homeland Security intelligence assessors could help the colors begin to acquire some meaning for public officials and private citizens alike.

The new unit also could provide additional incentive for the CIA and the FBI to communicate, in the form of another set of eyes looking at, and trying to integrate information from, both. It hardly would be decisive in producing easier communication between the two agencies-there is too much history, not to mention constitutional concern. But the new intelligence unit would be a customer with a direct stake in the intersection of the information and analysis produced by the two.

The challenge of cooperating among ourselves in the war on terrorism is indeed formidable. Not only does the war on terrorism involve, by one count, 18,000 federal, state and local agencies, but there are many more if private players are added-not just corporations but nongovernmental organizations as well. And almost none of them have security clearances. Thus far, most intelligence sharing has been haphazard. After Sept. 11, it turned out that there was information suggesting nuclear threats to New York, information that no part of the federal government bothered to share with New York officials. At the other extreme, California's governor interpreted very skimpy information about threats to the state's bridges as a reason for public announcement and stepped-up protection.

The implications of the changed threat run well beyond organization, to what is collected, by whom and under what restrictions, all sensitive issues of domestic intelligence gathering. The Sept. 11 terrorists not only trained in Afghanistan, they also used European cities like Hamburg, Germany, and Brixton, England, as staging areas where they could live, train and recruit in a protective environment. Similarly, they mixed easily in some areas of the United States, South Florida and Southern California in particular. The nation's need is not just to follow individuals, it is also to know what is being said on the streets and in the mosques of Brixton or Boston-it must do domestically what has heretofore been considered "foreign" intelligence gathering.

The terrorist threat takes us back to the thicket that the investigators of intelligence worried about a generation ago. Then, the investigations led to higher walls between intelligence and law enforcement. After Sept. 11, intelligence and law enforcement have been pushed toward each other, yet how far remains controversial.

For instance, the 2001 U.S.A. Patriot Act made it easier to move information across the organizational divide. Before the law was enacted, any information that was before a federal grand jury could be shared with CIA analysts only with a court order. Now, that information can be shared more easily. The act also loosened the FISC standard to permit covert searches if a foreign connection was a "secondary purpose." The new law updated wiretapping authority to cope with a world of multiple, mobile cell phones. This summer, FBI Director Robert Mueller relaxed rules that had restricted FBI agents from doing things that ordinary citizens do, such as surfing the Internet or visiting churches and similar public places.

Shifting the culture of the FBI from law enforcement to prevention, as Mueller has urged, is such a dramatic change that it may not be wise. In any case, it is the work of a generation, not a couple of years. Ultimately, if we require not just good law enforcement but good domestic intelligence, can the FBI do both? Former National Security Adviser Brent Scowcroft has suggested creating a separate career track in the bureau for intelligence-a call that fell on stony ground. By tradition, law enforcement has been the bureau's dominant mission and special-agents-in-charge have dominated its pecking order. Should the FBI be split into two agencies, one for law enforcement and the other for domestic intelligence?

If domestic intelligence is now an urgent need, should we create not just a Department of Homeland Security, but also add to it a home office-our version of MI-5, the British domestic intelligence service-as several members of Congress have suggested? Creating a new service would not solve the turf disputes born of overlapping missions. But, somewhat paradoxically, a separate U.S. domestic service might make for clearer lines of accountability than would a domestic intelligence agency that could wind up as a stepchild in a reshaped FBI.

And if domestic intelligence means not just tracking suspected terrorists, but also monitoring the chatter in the mosques of Chicago or the strip malls of South Florida, how much risk are we prepared to run that rights of Americans, let alone of non-Americans (who have far fewer rights), will be compromised?

In coming to grips with these questions, the creation of a Department of Homeland Security will provide a beginning, but just a bare beginning.

Gregory F. Treverton, now at RAND, was vice chairman of the National Intelligence Council during the first Clinton administration. His book Reshaping Intelligence for an Age of Information was published last year by Cambridge University Press. ]]>

Intelligence Crisis

Gregory F. Treverton — Thu, 01 Nov 2001 00:00:00 -0500

Old sources and methods must be reshaped to deal with a host of new threats, especially a new kind of terrorism.

he old and new worlds of intelligence met on Sept. 11 when terrorists attacked the World Trade Center and the Pentagon. The old world was dominated by a single target, the Soviet Union, and a few consumers, most of them political and military officials of the U.S. government. Information was in short supply, and most of what the intelligence community had, it owned, having produced it with its own special sources-espionage or spy satellites. The intelligence world regarded that information as reliable. In the new world, intelligence has many targets, not one; many consumers, not just a few; and vast amounts of information, much of which is neither owned by intelligence nor regarded as reliable-for example, that stew of fact, fiction and disinformation known as the Web.

Sept. 11 drove home the fact that terrorism is an old world problem but in new world circumstances. The new world is much more open than the old, but terrorists are not part of that openness. They do not advertise their plans, so intelligence's special sources are still important-espionage, or human intelligence (HUMINT), intercepted communications or other signals (SIGINT), and photos or other images (IMINT). Yet even to grapple with old world terrorism, methods from the old world need to be reshaped by the circumstances of the new. The CIA needs to conduct espionage, for instance, in a very new way-outside the official cover of embassies, more patiently and in a more targeted fashion. Even then, it will be hard-pressed to penetrate terrorist cells in South Asia or the Middle East. It will need friends or allies, not all of which will be states, and it will need to share with them in ways that do not have much precedent. Those sharers will be partners and sources and customers of the intelligence community.

We still have no words to describe the "post-Cold War world." The terrorist attacks are a too-vivid reminder that dangerous threats remain. But those threats are not in a class with the Soviet Union. They are snakes, not the Soviet dragon, to use the phrase of former Director of Central Intelligence R. James Woolsey. In military terms, the United States is indeed the sole superpower; only it has the whole panoply of military instruments and the capacity both to combine arms in complex joint operations and to project those operations over long distances. It will remain so for the foreseeable future; indeed, in some terms its lead is lengthening.

American military predominance gives rise to a paradox: Because the United States is so predominant in conventional war, it is not likely to fight another one. Only a fool, or a desperate man, would repeat Saddam Hussein's mistake by taking on the United States where it is strong. Future foes will try to find where the United States is weak. They will not confront American power symmetrically. Rather, they will reach for asymmetric strategies and tactics, in which weapons of mass destruction, especially chemical and biological weapons, will loom large. Future regional conflicts will be fought under the shadow of such weapons, and thus must be planned under that shadow. Would-be foes will train such weapons on U.S. forces where they mass, or against the long lines of communication over which the United States must move forces, or against vulnerable allies or bases the United States needs.

In contrast to military might, political and economic power will be more dispersed.

Most of the major powers of the future will be large, rich and relatively homogenous. The list is almost certain to include the United States, Japan and Europe; Russia or China may be on it as well.

At a third level, global processes are undermining the hegemony of the nation-state, which has been the dominant fact of international politics since the Treaty of Westphalia in 1648. Those processes include:

Economic globalization. Economic trends both integrate and disintegrate. They integrate in that national borders and distances matter less. At the same time, though, in a world where people's skills are really the only national endowment that matters, countries that opt out of the global economy and people with fewer skills are left behind. Economics integrates only those who can be integrated. Thus, the gap between the haves and have-nots-a disintegrating force-is growing, not just between rich and poor nations but also within nations, including the rich ones.
Communications revolution. The information revolution is the key enabler of economic globalization. It was the information revolution that undid the Soviet Union; planning and brute force could produce roads and dams but could not induce innovation in computer chips. It is continuing to undermine the ability of governments to control information. A generation ago it was feared that computers would abet dictators; Big Brother seemed closer at hand. Now, the opposite seems true.
Rising belief in the nonmaterial. People seek to differentiate "us" from "them" in religion, ethnicity or other ways. In that sense, what drove the tragedy of the former Yugoslavia and the revival of Islam that is visible around the world-horribly in the case of the terrorists -look like two sides of the same coin, and what motivates the American militias does not seem very different. Perhaps partly in alienation from processes of global integration, peoples seek some form of transcendental association.
Changing demographics. Over time, enormous disparities in growth rates between the Northern and Southern hemispheres will sharpen emigration pressures. They will also create youth "bulges"-that is, cohorts, especially of young men, much too large to be integrated into the job force. Those bulges may be sources of dissatisfaction, and so of instability, in such key developing countries as Egypt, Pakistan and Turkey, and they can be sources of recruits for terrorism as well.
Environmental concerns. Like demographic shifts, these are chronic, not acute: From one year to the next an environmental indicator may simply worsen gradually, almost imperceptibly, then come to a sharp crisis once some tipping-point is reached. Imagine what two nuclear meltdowns-two Chernobyls-within a year would do to the international agenda.

'New' Old Threats

For some developments that emerge from these global processes, the old-fashioned language of threat is appropriate. That is plainly the case for terrorism. Americans learned of their vulnerability from a gruesome string of bombings-the World Trade Center in 1993, the federal building in Oklahoma City in 1995, Khobar towers Air Force housing in Saudi Arabia in 1996, the U.S. embassies in Kenya and Tanzania in 1998, the USS Cole in 2000. What was shocking about Sept. 11 was not that terrorists could do it, but that they could do it four times, simultaneously, in a coordinated campaign.

There was and remains concern that nuclear bombs, materials or know-how might spill into the hands of terrorists. The Tokyo subway gassings by the mysterious Aum Shinrikyo group demonstrated that lethal biological weapons have been-and are-within reach of almost any terrorist group. If terrorists seek killing on a vast scale, they have no reason to go to all the trouble of building atomic or radiation weapons. They could use biological ones instead. If terrorists have not used atomic or biological terror thus far, that has been because "conventional" explosives have been lethal enough for their purposes.

For downing airplanes or otherwise killing large numbers of people at once, conventional explosives are more than sufficient. Indeed, the truck bomb that destroyed the U.S. Marine barracks in Lebanon in 1983 was, at the time, the largest nonnuclear explosion the FBI had ever seen. The suicide-bomber who drove into the barracks didn't have to meet his maker to accomplish his mission; he could have achieved nearly the same result by parking the truck several hundred yards from the barracks and exploding it by remote control. And the terrorists of Sept. 11 found an elegantly horrible solution. By turning fuel-laden airplanes into flying Molotov cocktails, they saved themselves the trouble of building any bomb.

Moreover, the new terrorism seems to differ from the old in motivation. That change was hinted at with the first World Trade Center bombing in 1993. The new terrorists, unlike previous ones, are not rational in our terms. Previous terrorists could be frightful but were rational. They used terror in pursuit of political objectives. They wanted something. Thus, they had to reveal their role, opening the possibility of retaliation against them or their state sponsors. By contrast, these enemies seem to have no political objectives we can satisfy or spurn. They want revenge for acts of ours they cannot describe and that we would not recognize. They are apocalyptic. Most previous terrorists have been rational, if extreme; they have sought specific political ends. While few places are strangers to terrorism, and while yesterday's sponsors of terror may be tomorrow's targets, the United States will continue to be the target of choice for these avengers. Its sheer size and dominance of the international system will continue to make it the "Great Satan." The domestication of threats such as terrorism and crime will blur the line between intelligence and law enforcement. In one sense it is only natural that as traditional threats wane, pure intelligence should turn to new purposes, such as catching criminals. Yet that turns intelligence to purposes for which it was expressly not designed: Not only has domestic practice separated intelligence and law enforcement, lest the two together become "Big Brother," but intelligence is avowedly national, its purpose to get a leg up on other nations, while future law enforcement will be inherently cooperative. Law enforcement also blurs the other distinctions, on which American intelligence has been based, between public and private and between foreign and domestic.

The cultures of intelligence and law enforcement are worlds apart. For intelligence, the purpose is policy, and the standard is good enough to serve as a basis for making that policy. For law enforcement, the purpose is convicting criminals, and the standard is that of a court of law. Intelligence takes pains to protect sources, and so stays out of the line of evidence. Law enforcement has to trade off protecting sources with convicting criminals, and its officers need to be prepared to testify publicly. This clash of perspectives and the challenge of finding new missions will be a primary shaper of U.S. intelligence in the years ahead; the disagreements will be sharper because the history of the two main organizations, the CIA and the FBI, is one of ragged cooperation at best.

Threats, But No Threateners

While law enforcement will strain the role of intelligence, the familiar concepts and language of threat, deterrence and punishment will still be relevant. For other results of global processes, however, the old language is misleading, and the old concepts do not suffice. These developments can be thought of as threats without threateners. The threat results from the cumulative effect of actions taken for other reasons, not from an intent that is purposeful and hostile. Those who burn the Amazon rain forests or try to migrate here or who spread pandemics here, or even those who smuggle drugs into the United States, do not necessarily wish Americans harm; they simply want to survive or get rich. Their self-interest becomes a threat to us.

These threats differ sharply from the Cold War's nominal threat. They are:

Chronic and long-term, not acute and short-term. Human beings, with their adrenal systems, are optimized to deal with acute threats, like war, not with chronic problems whose causes are today but whose consequences are tomorrow or the day after. We are galvanized by the "stun effect" of dramatic developments. By contrast, the threats without threateners are like New York City bridges whose maintenance can be deferred from year to year without visible effect until, all of a sudden, they are on the verge of falling down.
Not necessarily "zero sum" in the way traditional threats were. In war, one state's loss usually is another's gain. By contrast, action against environmental degradation can produce gains for all. But there will still be competition over who pays and how much. The cutting down of the Amazon forest is almost pure loss for most of humankind; it is not, however, for those who do the cutting.
Not necessarily reversible. The effects of wars are reversible within a generation or two. Societies recover. Not so, perhaps, for global warming, whose effects might be permanent, or for some kinds of pandemic, which might, like AIDS, rob societies of several generations of leaders.
Less susceptible to unilateral approaches than traditional security issues. During the Cold War, the United States made alliances and other such arrangements, in economics as well as security, but Americans still felt many of the levers of their security were in their hands. That seems less so for many of the new issues. Containing migration or environmental degradation inherently requires cooperation with other states. In that sense, the United States is coming to be less different from other nations than it was.
Sometimes beyond the domain of government. National security during the Cold War was a government monopoly. The threat was political and military, and most of those levers were in the hands of government, particularly the federal government. That is much less so of the newer challenges, for which many of the levers are in the hands of companies or private citizens. Egypt, for example, is one of a very few countries to receive significant assistance from the U.S. government, yet in the end, whether Egypt grows fast enough so that its youth bulge does not threaten its stability depends more on the actions of private capital than government assistance.
Unlikely to be "cheap" or as unifying as traditional security threats. The Cold War's image of the nuclear danger was both stunning and unifying; nuclear war, one student put it, would have united in death all Russians-men, women, children and the KGB. The nuclear danger was equally unifying for Americans. At the same time, for most Americans, responding to the Soviet threat meant paying taxes; their daily lives were not otherwise much affected. That is not so for many of the new dangers. For a "new old" issue such as terrorism, the critical debate ahead is how much Americans will need to change their daily lives-from how they travel, to whether they register with their local police to how often they are searched.

The 'Market State'

Power is dispersing around and through the nation-state, and the role of nation-state governments is changing. The broad shape of the international system may reflect the interactions of the major nation-states, but increasingly, the drivers of that system are elsewhere. What lies behind old threats and new is a transformation of international politics-the emergence of the market state. The transition from what might be called the "territorial state" to the market state has been going on for a century at least. That transition, however, was obscured by last century's preoccupation with particular, and particularly fearsome, territorial states-Germany, Japan and the Soviet Union. It may be muted for a time, but will not be reversed, by this century's preoccupation with terrorism's new old threat.

Critical levers, many of which used to be in the hands of government, are passing to the private sector. Each of the 10 largest companies in the world has annual total receipts larger than the gross national products of 150 of the 185 members of the United Nations, including countries such as Portugal, Israel and Malaysia. From 1983 through 1988, the ratio of public to private flows of capital to the poorer countries averaged just under 2-to-1; over the course of 1989 through 1995, the ratio switched to almost 5-to-1 in favor of private flows. Later, just before the Asian economic debacle of 1997 to 1998, it approached 10-to-1.

The market respects neither the borders nor the icons of the traditional state. It does not care whether the worker is Filipino or American, Chinese or German, man or woman, homosexual or military veteran. If the person can do the job, he or she is rewarded, and if not, not. "Made in America" is not a label of interest to the market.

The circumstances of the market state are transforming the role of government. The government of the territorial state was a doer; students of public administration and later public policy learned that government's choice was "make, buy or regulate." For tomorrow's public managers, the choice will be "cajole, incentivize or facilitate"-a very different task. What the government will provide is its power to convene, its infrastructure, its legitimacy, perhaps, and its information-or intelligence. The shift in mind-set this will require of the intelligence community can hardly be overstated. Intelligence only slowly came to the realization that it worked for Congress as well as the U.S. executive. It will not come easily to the idea that it works with, and sometimes for, CARE and Amnesty International, not to mention Shell and Loral.

Puzzles Versus Mysteries

The changed world requires a fundamental reshaping of intelligence. Espionage, for instance, needs to be dramatically reshaped to be smaller, more tightly targeted and to operate mostly independent of American embassies abroad. And spying will also be a cooperative venture; American spy-masters seldom will be able to crack into terrorist cells, but other countries may be able to do so.

Spying is most valued for solving immediate, tactical puzzles-what is Osama bin Laden planning? These puzzles have a solution if only we had access to the information. Puzzles were intelligence's stock-in-trade during the Cold War-How many missiles does the Soviet Union have? How accurate are they? What is Iraq's order of battle? Puzzles' opposites are mysteries, questions that have no answer even in principle-Will North Korea keep its part of the nuclear bargain? Will China's Communist Party cede primacy? What will Mexico's inflation rate be this year? No one knows the answers. The mystery can only be illuminated; it cannot be solved.

Spying, however, is a target-of-opportunity enterprise. Despite what spies may hear or steal today, or be able to communicate to their American case officers today, they may not hear or see or be able to get out tomorrow. What is decisive today may be unobtainable tomorrow. Worse, the moments of crisis, when information from spies is most valuable to us, may be precisely when they are most exposed, when to communicate with them is to run the greatest risk of disclosing their connection to us.

Secrets are more valuable with regard to enduring puzzles, ones that will still matter tomorrow if they are not solved today. A foreigner's negotiating position is perishable; after today's round the U.S. negotiator will know it. By contrast, the order of battle for the Iraqi military is an enduring puzzle: Whatever we know today, another piece of the puzzle will always be welcome tomorrow. Similarly, some hints about the organization of the Hezbollah terrorist organization will be useful even if we fail to get tactical warning of today's terrorist operation. For these puzzles, spying will continue to be useful.

The required reshaping of the clandestine service goes well beyond what is imaginable in today's political climate. Indeed, today's first answer-more money-is exactly what is not required. First, espionage should be narrowed to focus on potential foes near U.S. troops deployed abroad, the governments of a small number of potentially destabilizing rogue states and closed groups that threaten to engage in terrorist activities against the United States. The cost in terms of risk of clandestine operations warrants their careful use only when the information obtained covertly would significantly enhance U.S. national security. A streamlined clandestine service would yield a greater payoff for the United States.

Second, this streamlining implies that the CIA would no longer have stations everywhere around the globe. There is merit to the counter-argument that tomorrow's untidy world makes it impossible to predict where the United States will want to act, and so some infrastructure for spying should be sustained almost everywhere. The argument is particularly strong with regard to supporting military operations. Yet recent experience suggests that where the United States dispatches troops abroad will be hard to predict with much advance warning. The only way to be prepared in advance to support American troops would be to sustain an infrastructure for spying virtually everywhere. On balance, the risk of such a far-flung presence outweighs the gain.

Third, the narrowed targeting of the clandestine service means it should focus only on those high-value secrets that cannot be collected another way. The value of those secrets can, to be sure, only be assessed in light of what is available openly. But the task for the clandestine service is obtaining critical secrets.

Fourth, the reshaped clandestine service would operate from the United States and through case officers abroad operating outside embassies under nonofficial cover. Operating under official cover is paper-thin in any case; what it mostly supplies is diplomatic immunity, thus lowering the risk to a CIA spy-master should he or she be caught by local counterintelligence officials. The reshaped service's few stations abroad would mostly be limited to liaison with cooperating local intelligence and police services.

During the Cold War, when the CIA's targets were, first, Soviet officials anywhere, and second, officials and politicians from the local country, the diplomatic cocktail party circuit was not a bad place to troll for recruits. "In the Cold War, if you wanted to recruit an East German or a Pole, the vehicle for that contact was the diplomatic cocktail circuit or the tennis court. None of the guys you're interested in now are on that circuit," Robert Gates told Tim Weiner, author of "The CIA's Most Important Mission: Itself," in the New York Times Magazine (Dec. 10, 1995). Nor are terrorists or the leaders of Colombian drug cartels likely to be frequent guests on the embassy circuit.

Cracking the hardest targets, like terrorist cells, will take a very different mode of operation. As Gates put it: "You need a guy walking into Tripoli or Pyongyang who doesn't look like he just left Iowa." Yet nonofficial cover is expensive and time-consuming, and given the lack of diplomatic immunity, it is potentially dangerous. CIA officers operating out of embassies already are distracted to some degree by the need to do the embassy cover job they are supposed to have in addition to their espionage work. Other countries closer to terrorist organizations, including countries that are not friends of the United States, may have better luck.

Finally, in the future spying will focus less on collecting information than facilitating its collection by technical means. The clandestine service will gather secrets less through what its own spies hear than through the sensors those spies can put in place. It will have a particular role with respect to signals intelligence. Already, the bulk of funding for SIGINT goes for satellite-based collectors, but most of the take comes from ground stations, many of them clandestine. At the same time, while the precise details are secret, the United States probably breaks more codes by stealing code books than by breaking the codes with the National Security Agency's supercomputers and brainy mathematicians.

That will be all the more true as SIGINT will need to get closer to the signals in which it is interested. During the high Cold War, the Soviet Union sent many of its phone calls through microwave relay stations. Since private telephones were relatively few, intercepting those conversations with satellites yielded important insights into economic production and sometimes into military movements or lines of command. Now, though, with hundreds of communications bundled into fiber optic lines, there is less for satellites to intercept. If SIGINT is to intercept those signals, it will have to tap into particular communications lines in specific places. It will have to collect keystrokes straight from a personal computer, before software encrypts the message.

Market State Intelligence

The United States will face some fearsome snakes, some of which will be closed to view and so require old world methods. Yet the dominant feature of the new world is how much information is out there. Intelligence is no longer just in the secrets business, it is in the information business. The implications of the shift are dramatic. The explosion of information means that policy officials will be more, not less, reliant on information brokers. If collection is easier, selection will be harder. There will also be more brokers and more competition among them. Intelligence analysts will be one set of brokers, but others, the competition, will range from CNN, to Bloomberg and Oxford Analytic, to journalists and academics.

The more open world is blurring the distinction between collection and analysis. The best looker is not a spy-master, much less an impersonal satellite, but someone steeped in the substance at hand-in short, an analyst. Yet analysts now get rewarded for being generalists, not deep specialists, and in some areas, such as economics, intelligence cannot compete with the private sector. Analysts, though, are cheap in comparison with satellites, and hiring more people from outside, even for brief tours, would deepen the intelligence community's expertise.

In the circumstances of the high Cold War, there were powerful arguments for targeting intelligence tightly on the Soviet Union; for giving pride of place to secrets, especially those collected by satellites and other technical means; for centralizing intelligence; and for separating it from the stakes of policy agencies. None of these arguments, however, is compelling today.

With one target and one preeminent consumer-in form the President but in fact the National Security Council, encompassing the State and Defense departments and the NSC staff-there was a certain logic to the way intelligence was, and is, organized. It was structured according to the different ways intelligence is collected-the National Security Agency for intercepting signals; SIGINT, the CIA's clandestine service, for spying; HUMINT; and so on. These "INTs," or "stovepipes" in the language of insiders, could each concentrate on the distinct contribution it could make to understanding the Soviet Union. In the process, though, those "INTs" became formidable baronies in their own right.

Now, however, the old structure just has to be wrong. No business would organize this way. Now, there are many targets and many consumers, though there are some consistent alignments among targets, customers and collectors. In these circumstances, a firm would organize by lines of business, establishing a distributed network or a loose confederation in which different parts of intelligence would endeavor to build very close links to the customers each served. The existing Director of Central Intelligence centers-for counterterrorism, counternarcotics, and the like-are suggestive models. They do organize by problem or line of policy. They primarily integrate within the world of intelligence, though they provide a focal point for connecting to policy. And the distributed network would be "virtual," not bricks and mortar, because while some problems, such as North Korea or terrorism, will be enduring, others will rise and recede quickly.

In the circumstances of an age of information, perhaps it is time for intelligence to "split the franchise" and dramatically change how it is organized. Today's tactical puzzles where secrets matter are both fewer and more varied than the Cold War's Soviet puzzles, but they are still important. For solving puzzles, analysts need to be close to the collectors of secrets. In a world of too much information, policy-makers will want to "pull" up what they need, not have information "pushed" upon them; they will want to pull up puzzle solutions when they need them, not receive a torrent of information whether they ask for it or not. Yet solving the puzzle is often important enough that getting policy officials to pay attention is not a problem.

Mysteries are more abundant now, and the franchise of framing strategic mysteries is very different from solving puzzles. Analysts need access to secrets, but their crucial partnerships are those with colleagues outside intelligence and outside government, in the academic and think-tank worlds, in nongovernmental organizations and in private business. Intelligence needs to be opened wide, not cosseted in secret compartments. This franchise is based on the recognition that intelligence's business is information, not secrets, and that its product is experts, not paper.

In a world where both structures and U.S. interests are up for grabs, policy-makers would be better served by intelligence brokers close at hand, down the hall, not out at Langley. Perhaps the CIA should be dispersed, its analytic pieces assigned to the State, Treasury and Commerce departments and elsewhere across official Washington.

The last part of the challenge for intelligence in the market state will be to reach out to new partners, especially in dealing with hard targets such as terrorism. It will mean conceiving of intelligence strategically, as a means of helping others see a set of issues the way the United States does and so facilitating the building of coalitions. While U.S. intelligence has been creative, in fact, in sharing intelligence-for instance, in U.N. peacekeeping operations-in principle, sharing has been a grudging act, letting a few trusted friends see some of the crown jewels if they had something to contribute in return. Building relationships will still be an important reason for sharing, but in the future, the partners will be much more varied-not just intelligence agencies but NGOs, not just foreign offices but foreign companies. And the sharing will be two-way, not one. In the world of the market state, a world that is not fully open everywhere but is not very closed anywhere, humanitarian NGOs will know more about many African countries than the CIA, and oil companies will be just as expert on Indonesia.

The market state ultimately will invoke the dilemma of how much intelligence can be broadened to serve shared international purposes, given its very national origins. After all, intelligence has been thought of as the way to get a leg up on other nations, not bring them into coalitions of the willing. The campaign against terrorism, for instance, will bring together the willing and the reluctant. Countries and groups that are no friends of the United States may be brought into an anti-terrorism coalition, and intelligence cooperation-including laying out the case against particular terrorists-will be part and parcel of assembling and sustaining such a coalition. In time, the coalition might give real force to an international norm against terrorism.

But in the process, virtually all the distinctions on which U.S. intelligence has been based would be strained. Intelligence and law enforcement would be forced together. Distinctions between "home" and "abroad" would be hard to sustain as terrorist networks reach across borders and even include American citizens. U.S. collaborators would run well beyond trusted friends, to those who are neither friends nor states. Finally, the intensity of cooperation required would leave the intelligence community hard-pressed not to reveal something of its capacity, if not its sources and methods.

Gregory F. Treverton, former vice chairman of the National Intelligence Council, is senior policy analyst at RAND and senior fellow at the Pacific Council on International Policy. His book, Reshaping National Intelligence for an Age of Information, from which this article is adapted, was published earlier this year by Cambridge University Press. ]]>