Meeting of Team 2: Kevin Scheid, Lorry Fenner, Lloyd Salvetti and Gordon

Lederman with Chris Kojm and Vice-Chairman Hamilton

November 17,2003

Notes Taken by Ben Rhodes

Mandate: Kevin Scheid discussed the Team's mandate. In addition to intelligence

management, collection and analysis, he said the team will look at Congressional
oversight, resources, and covert operations - which overlaps with Team 3.

Help from Commission: Lee asked what the Commission could do to help the Team's
work. Kevin Scheid said the Team would benefit from more interaction with
Commissioners. They are beginning to form opinions, and don't want to draft a
monograph that contradicts the feelings of the Commission. Lee asked about the best way
to do this. Kevin Scheid suggested interaction with Commissioners who are particularly
interested in intelligence. For instance, the Team had a very good luncheon with
Secretary Lehman. There are likely three or four other Commissioners with a particular
interest in the Team's work. Lee said he would raise the issue at an upcoming meeting.

Access: Lee asked if the Team is getting the access it needs. Kevin Scheid said they have
done well with NSA - less well with CIA and DoD. Since Lee's meeting with Secretary
Rumsfeld things have gotten better at DoD. They are still waiting for the classified
addendum to Rumsfeld's anti-ballistic missile report. The document has Rumsfeld's
feelings about management of the intelligence community (1C) and the Commission
should see it, but it is not clear who controls the document - DoD or Congress. The CIA
is still a problem. Lee asked if the problem is bureaucratic or stonewalling. Kevin Scheid
said it's a little of both - the Point of Contact at CIA would rather do less than more.

Lee said for Wednesday he wants each Team to do a summary of their access situation -
exactly what have they not received that they requested, and what can the Commission do
to help? On CIA, Lee said he is willing to see Director Tenet. Meeting with Rumsfeld
went well - a similar meeting with Tenet could preclude the need for a subpoena. Lee
asked about subpoenas. Kevin Scheid said he would not recommend one at this point.

Report: Lee asked about the report. Kevin Scheid said they have conducted 95
interviews and are beginning to draft a narrative. They have an outline for their
monograph, and are halting interviews temporarily to do some writing in December. Lee
asked if they could make the May deadline. Kevin Scheid said yes. They could have a
draft monograph in January or February. The question will be how thorough their
answers, findings and recommendations can be by May. Lorry Fenner said the Team will
need Commissioners to pinpoint gaps in the Team's work. Chris Kojm said the
Commission could meet on a draft monograph sometime in January or February to
provide guidance. Kevin Scheid reiterated that the sooner the dialogue with interested
Commissioners begins, the better.
Ideal Intelligence Community: Lee said his ideal I.C. would be independent of the
Executive Branch. The problem is our intelligence chiefs are politicians, thus
intelligence is tilted to the President's view. An example of a more independent entity is
the Federal Reserve - while not wholly autonomous, it has a tradition of independence
and is rarely challenged by the President. Lee said he was not sure of other
Commissioners' views, but he feels the DCI did not call it like he saw it in the run-up to
9/11 and the war in Iraq. Part of the problem was a lack of independence. Lee said he
knows it's a fantasy, but thinking of the ideal I.C. is a good starting point.

TTIC: Lee asked how TTIC is doing. Lorry Fenner said they have conducted some
interviews but not gotten into nuts and bolts. Lloyd Salvetti said Director Brennan has a
vision for where TTIC can go, the question is whether they can get there. He views it as
independent but there are turf-conflicts with the CIA's CTC. Gordon Lederman
disagreed. He said TTIC is not the entity we need - it resembles building a car by pulling
pieces together from a junkyard when what we need is a sportscar. Lee said the vision is
often good with ideas like TTIC - the problem is in the implementation.

Management: Lee raised DCI authority. He suspects the Commission wouldn't go all the
way to a DNI because of the problems of implementation and DoD. He asked about the
"middle-ground" of a strengthened DCI. He said the Team should be pragmatic, but at
the same time recommend what is best for the I.C. and not withhold judgments that are
tough to implement - the Commissioners will then make political judgments. Kevin
Scheid asked if the Commission will be looking for options. Lee said the Team should
identify the major recommendations and offer the pros and cons of each one.

Lee asked about the Under Secretary of Defense of Intelligence. Kevin Scheid said it
could be value-added if he worked with the DCI, but is counter-productive if he competes
with the DCI or attempts to fill a perceived vacuum of power around the DCI.

Information-Sharing: Lee raised information-sharing. Clearly there was a problem

connecting dots between CIA-FBI-DoD and others. The Team should say what went
wrong, what has been done, and what more needs to be done. Kevin Scheid said TTIC is
part of this, but there is a constellation of organizations charged with CT - DoD, CTC,
DBA, DHS, the military services, and now TTIC. No one has rationalized who does
what. Lee said there is a line between strategic and tactical intelligence, but Kevin Scheid
said that line is now being blurred.

Analysis: Lee raised analysis. We collect mountains of data, but have problems with
analysis. Lee recognizes the necessary swing back to HUMINT, but we must recognize
the limitations of HUMINT - we are not going to infiltrate UBL. Kevin Scheid said what
we need is not more HUMINT but the right kind of HUMINT. We need to move past
people working under embassy-cover to meet new transnational threats like terrorism.
Lloyd Salvetti said he thinks we are moving towards more creative ways of doing things.
Lee said the Team should highlight positive steps that have been taken - for instance
more focus on linguistic expertise - to give re-enforcement.
Lloyd Salvetti said there was a strategic gap after the Cold War - we cut back collection
and analysis. We used to look at the Soviets strategically, thinking 5-10 years ahead.
Nobody did this on terrorism. TTIC has a long-term strategic component. The I.C. needs
components that look beyond the PDB, 5-10 years in the future.

Counter-Terrorism Strategy: Kevin Scheid said the Team cannot locate a

comprehensive, integrated counter-terrorism strategy for the I.C. Emphasis pre-9/11 was
on tactical operations - not strategic analysis. There was no sense of the threat. Lee said
this is a very important criticism. The Team should offer an assessment of what's been
done to remedy this, and what needs to be done.

Warning: Kevin Scheid said the Team cannot locate who is responsible for warning in
the I.C. - the National Intelligence Council has an officer for warning who says CTC is
responsible. CTC has nobody who does this. The Team has drawn the conclusion that
nobody is responsible for warning and - because of minders - people in the I.C. know
this conclusion has been drawn.

Accountability: Gordon Lederman said the central theme as he sees it is a lack of

accountability. For instance, TTIC may be the right model, but if it doesn't work nobody
is responsible. Lee said this problem permeates the entire USG - people don't want
accountability. Gordon Lederman said post-World War II we opted for a decentralized
approach thinking we could put up with problems while protecting our democracy. Now
different threats have made the price of decentralization too high. Lee added that he
thinks the I.C. has developed in too many different directions. Everybody wants
intelligence and anyone with enough power and resources sets up their own operation.

Resources: Lee raised the issue of resources. Congress has a pattern on this - an
intelligence failure happens and they throw money at it. We need to look at cost-
effectiveness. It's not popular, but the Commission should address it.

Priorities: Lee raised setting priorities. He said this responsibility has to lie with the
policymaker. It's not as simple as when all we wanted to know about were Soviet
missiles - now people want intelligence on everything. The tough problem is making
judgments. Presidents Clinton and Bush missed terrorism as a national security judgment.
Kevin Scheid said this too was missing in the I.C. - a presidential directive from the mid-
908 set priorities, but there was no review of priorities in the I.C. from 1995-2002. There
has been a new presidential directive and priorities are being reviewed, but thus far CIA
has rejected the document request for this review as beyond the Commission's scope.

Privacy: Lee raised the issue of privacy. We need to make observations about
intrusiveness - the American people may not be ready for what is coming. What
safeguards should be in place to draw the line between liberty and security? Chris Kojm
said this is primarily Team 6's responsibility but Team 2 had some overlap. Lorry Fenner
raised the example of Canada's internal security service. There is a split agency that
issues a public report every year on secrecy. Lee said it comes back to management
structure. The benefit of having domestic intelligence in the FBI is the institutional
respect for the rule of law. He is not sure if the same culture permeates the intelligence
community. There may have to be an independent entity for review - like the Canadian
model - if the American people are to accept a domestic intelligence agency.

Oversight: Lee said we need recommendations for more vigorous oversight. We have
Congress and PFIAB, which is not independent of the President. Tim Roemer is talking
to Members on the Intelligence Committees; many favor permanent appointments. The
Leaders don't want to do this because it is a sought after appointment. The Commission
needs to look at this while remaining cognizant of the acute political sensitivity.

Budgeting: Lee said another Congressional issue is budgeting through supplementals.

Lloyd Salvetti said the I.C. plans on supplementals. Lee said this is an abomination -
there is no legislative process, and the authorization and appropriations process breaks
down. Everything is in an omnibus or supplemental. Kevin Scheid said there should be an
Appropriations Subcommittee on Intelligence - this would at least establish some
financial accountability with the DCI which could trickle down. Lee suggested that
recommendations may have to be floated with some Members during the vetting process.

Public Knowledge and Classification: Lee said another problem is public awareness.
The CIA closes itself off and this arouses deep public suspicions. The incentives are in
the wrong direction - the notion is "when in doubt, classify." Kevin Scheid said there is
an Annual Report required by the DCI that does little more than relate some of the I.C.'s
accomplishments. Lloyd Salvetti said none of the think-tanks - and almost no
Universities - have intelligence projects. We need venues where people study, debate and
report on intelligence - perhaps a Congressionally funded Center. But academics won't
do projects without access. Kevin Scheid added that there are no watchdog groups either.

Leaks: Lorry Fenner raised the issue of leaks. There have been enormous leaks that have
cost us dearly - this make the I.C. gun-shy with declassification. Leaks have not been
pursued by DoJ. For openness to increase, there needs to be a parallel effort to crack
down on leaks of necessarily classified information. Lee said you have to talk to
prosecutors - why are leaks so tough to prosecute? Is it too difficult legally? The severity
of some leaks - including regarding UBL - is a point worth making.

Foreign Travel: Lee asked about the Team's travel. Kevin Scheid spoke about the recent
staff trip and how it was illuminating to get an outlook on foreign intelligence from
abroad, and that they were able to draw on diverse perspectives. The Team was looking
at how we work with host countries to form transnational solutions to transnational
problems. Lee asked what additional travel would be necessary. Kevin Scheid said the
Team would benefit from a trip to Asia - perhaps for 10 to 14 days - as they are detailing
activity by the 9/11 plotters in Kuala Lumpur as a case study. The Team would also
benefit from a European trip to see how we are working with intelligence services beyond
the U.K. Lee said he was supportive of the need for more travel, and would raise the issue
with the Commission.