Thank you President Medawar for that introduction. Thank you Chairman McNulty for having me. It is a pleasure to be in Los Angeles today. It is my second time here since I became Director of the FBI, and it is great to be back in this fine city. I would also like to introduce Richard Garcia to those of you who may not already know him. Rich is Assistant Director in Charge of the Los Angeles office.

Today, I want to talk to you about an issue which has recently been the subject of great national debate. That subject is intelligence.

Intelligence information has been vital to our nation from the beginning. You may not realize that George Washington, the father of our country, was also the father of intelligence gathering efforts in the United States. At FBI Headquarters, there hangs a letter written by General Washington to one of his fellow revolutionaries in 1779. In the letter, Washington offers advice regarding an individual who is gathering and transmitting intelligence.

He writes, “It is not my opinion that Cupler [Junior] should be advised to give up his present employment. I would imagine that with a little industry he will be able to carry on his intelligence with greater security to himself, and greater advantages to us – under cover of his usual business.”

In short, Washington is advising the young man to keep his day job and go undercover. Washington and the other founding fathers knew the importance of intelligence, and they were adept at using it. Their intelligence capabilities helped us win the Revolutionary War.

Although intelligence has been crucial throughout history, there are many misconceptions and, ironically, a lack of information about it. It is ironic because intelligence is just that – information. Or as we define it: vital information about those who would do us harm.

While the need for intelligence has not changed over the years, the threats facing our country have changed. The United States Intelligence Community as we know it today was developed in response to the Cold War. It was a different time with a very different enemy.

Working against the Russian spy was a long-term effort, requiring patience. Later, we used the same methods effectively against traditional organized criminal groups in the United States. Now, the Soviet Union no longer exists, and the traditional organized crime families are greatly diminished.

Today, our adversaries are nation states, militaries, and international terrorist and criminal organizations. They are dedicated to stealing our secrets or destroying our way of life. Confronting these new threats, patience is no longer a virtue because we do not have the luxury of time.

One of the key lessons of September 11th is that threats to our nation can come from anywhere at anytime. Our adversaries do not respect organizational boundaries or international borders. They are networked together by modern information technology that has made the world smaller than ever before. Today, criminal activity crosses international boundaries in the stroke of a computer key.

Crime is more diverse than ever before. It ranges from international terrorism to Internet transmission of child pornography, from lone shooters to large gangs, from stealing state secrets to stealing corporate research, from the trafficking of illegal weapons to the trafficking of human beings.

Often there is a nexus between criminal activity and terrorism. We see organized crime laundering money for drug groups. Drug groups selling weapons to terrorists. Terrorists committing white-collar fraud to raise money for their operations.

Let me give you an example of this type of connection. Believe it or not, the organized theft of infant formula is a growing national problem. Bands of thieves steal formula from retail outlets. They then sell the stolen formula to companies that repackage and resell it to other wholesalers, or to individual stores that pay a higher price. These tend to be inner city stores that capitalize by selling it to recipients of coupons provided by the federal government. In a number of our cases, the subjects of these investigations are suspected of providing financial support to terrorist organizations, such as Hamas and Hezbollah. As you can see, frequently these investigations are not just criminal, but are also counterterrorism investigations.

Confronting these diverse and symbiotic threats is not easy. It means intelligence is now more important than ever. One good piece of intelligence information can give us the early warning we need to stop a stealthy, speedy, and deadly enemy.

To uphold our long tradition of protecting America, the FBI must be an intelligence-driven, highly trained, electronically sophisticated, and internationally networked organization. Intelligence must be woven across all FBI programs because cases that appear unrelated may share common links.

To stay ahead of criminals and terrorists, we must out-maneuver them in multiple places at the same time. It takes a network to defeat a network.

So how do we use the intelligence we have to carry out our mission of protecting America? How do we strengthen our network?

Intelligence information arrives in a river of unrelated, often indecipherable, data. It may be fragments of phone conversations, scraps of paper, e-mails, random sightings, or rumors. This information must be sorted and analyzed to determine what is factual, meaningful, relevant, and, most importantly, threatening. This is no small task, but it is the challenge we face today: transforming bits and pieces of that information into intelligence that can be acted upon in compressed time frames and disseminated to the people who need it.

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Our job is to provide information to decision makers, both inside and outside the FBI, so they are prepared for any situation. The value of that information is determined by whether it helps them make better decisions. The desire to protect the nation and better serve decision makers – from the president to the patrolman – fuels our commitment to strengthening our intelligence capabilities.

To understand how we have changed, it first helps to understand a little about what is called the “intelligence cycle.” This is a continuing analytic methodology that drives the FBI’s investigative mission. In simplest terms, the cycle has four parts:

1) requirements management – identifying what we don’t know;
2) collection – gathering information on what we don’t know;
3) production – answering the questions; and
4) dissemination – getting the answers out to the right people, whether it be the President of the United States or the patrolman on the street.

Although the FBI has long experience in collecting information, we needed to be better able to analyze and share that information.

There are three ways in which the FBI is doing just that – we are reshaping our operations, we are enhancing our workforce, and we are strengthening our partnerships.

First, reshaping our intelligence operations. We established one comprehensive program with oversight over all FBI intelligence. Now, we are moving to expand that effort to better coordinate and share our intelligence resources and more easily adapt to fast-moving global threats.

Our ability to preempt another 9/11 or Oklahoma City bombing will depend on our ability to predict an attack. To increase the scope of our intelligence capabilities, we have created Field Intelligence Groups. They are in every FBI field office nationwide. They are made up of agents and analysts with a single intelligence mission. Through them, every field office can more effectively carry out each step of the intelligence cycle.

Indeed, here in Los Angeles, the Field Intelligence Group consists of 20 agents and 20 officers, managed jointly by the FBI and the Orange County Sheriff’s Department. They are working to expand their efforts and form a regional center that would provide 24/7 operations. The success of these Field Intelligence Groups is key to our future intelligence capabilities.

Second, aside from reshaping our operations, we are enhancing our workforce. Organizational changes are important, but the heart and soul of any organization is its people. We are improving our intelligence capabilities by establishing a cadre of intelligence professionals.

We have a vigorous recruitment plan, as well as a new automated system to speed the application process. To date, more than 57,000 applications have been received for the position of intelligence analyst at the FBI.

Aside from intelligence analysts, we need agents, surveillance specialists, linguists, and others who understand many cultures in countries around the world. We have hired more than 700 linguists since September 11th, but we need more. We need those who speak not only Arabic and Farsi, but also Pashto and Urdu, Malay and Mandarin, as well as many other languages.

Many different skills are needed to establish a first rate intelligence workforce, but to hone these skills, training is critical. We have created courses to better train our personnel. Every new intelligence analyst attends our FBI College of Analytic Studies – where a seven-week course teaches them essential knowledge and skills. Furthermore, all new agents receive intelligence instruction, and we are establishing career tracks for agents who wish to specialize in intelligence. We want intelligence to be as routine to every FBI agent as his or her gun and credentials.

Third, in addition to building our workforce, we are building stronger partnerships. We have enhanced our partnerships and information sharing at all levels – local, state, federal, and international.

At the state and local level, our Joint Terrorism Task Forces are on the front lines of the war against terrorism. They are the action arm, working side-by-side with our intelligence and law enforcement partners to address the terrorist threat throughout the country. They track down each and every counterterrorism lead, no matter how insignificant it may seem. In the last three years, we have increased the JTTFs from 35 to 100. They are the eyes and ears of communities around the country.

It was the JTTFs which helped foil the Millennium plot here at the Los Angeles International Airport. Since September 11th, the JTTFs have conducted investigations into Al-Qaeda cells from Lackawanna, New York, to Portland, Oregon.

In addition to better cooperation at the state and local level, we are also working more closely with our partners at the national level. To ensure we all have access to the same information, we have created a number of “fusion centers.” One example is the Terrorist Threat Integration Center. Here, federal agencies work side-by-side analyzing terrorist threat information. This is the place where we “connect the dots.” Think of it as our camera aimed at the universe of threats against America, able to give us a snapshot of the threat at any given time.

Once the dots are connected, making information available – or dissemination – is critical. Due to legal barriers and operational concerns, we and other agencies tended to be protective of our information prior to September 11. Thanks to the Patriot Act, today, we freely exchange our information. The Terrorist Screening Center is another place, in which multiple agencies bring together disparate “watchlist” information for the purpose of identifying potential terrorists to prevent future terrorist attacks. Think of this as the “Who’s Who” of terrorists.

These are just a few of the ways we are reshaping our operations, enhancing our workforce, and strengthening our partnerships. The question is, what do these changes mean for each of you?

It means that we are using these new found intelligence capabilities across all of our programs. For example, shared intelligence information is helping us crack down on the more than 20,000 gangs active in the United States. Here in the Los Angeles metro area alone, there are 110,000 documented gang members. To track their activities, we use an array of investigative techniques, including surveillance, wiretaps, and undercover operations. We gather and analyze intelligence from as many sources as we can, including informants and, sometimes, the gangs’ own websites.

Intelligence not only helps us at home, but also around the world. Let me give you one example of how intelligence allows us to attack problems internationally.

We have a unique program dedicated to recovering stolen art and cultural artifacts. Due to their high value, art and cultural property are often associated with other criminal activities such as extortion, fraud, money laundering, and, in some cases, illegal drug trade. According to the United Kingdom’s National Criminal Intelligence Service 2003 threat assessment, there is a link between the removal and transport of cultural objects and the funding of terrorism.

Our specialized FBI investigators work with law enforcement agencies throughout the world. We had one case in Spain, in which $50 million worth of artwork was stolen from a home. Our New York Division worked with our Madrid office and the Spanish National Police. A bit of intelligence – a tip from an informant – helped uncover a link to three members of a Spanish criminal enterprise engaged in narcotics trafficking, homicide, armed robbery, and other crimes. They met an undercover FBI agent in a Madrid hotel room, where they agreed to sell one of the stolen paintings for approximately one million dollars. The three suspects were arrested, and search warrants resulted in the recovery of the rest of the stolen artwork.

In recent years, FBI art theft investigations have resulted in over $100 million in cultural property recoveries. And I believe George Washington would appreciate the fact that in one of those cases investigators recovered one of 14 original copies of the Bill of Rights. Here in Los Angeles, FBI agents and U.S. marshals recently seized a $10 million Picasso that was stolen by Nazis during World War II and is now at the center of a well known legal battle.

Just as intelligence helps us solve international criminal cases, it has been invaluable in the fight against terrorism. Without discussing sources and methods, let me say that we are using intelligence each and every day in the war against terror, and we are seeing results.

Since September 11, working with our partners, we have disrupted and dismantled terrorist operations from coast to coast. We have brought criminal charges against over 300 individuals, securing nearly 200 convictions. We have launched over 60 investigations into terrorist financing. And we have captured or killed much of Al Qaeda’s top leadership.

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Despite our progress, the war is not over, and terrorists still seek to do us harm. As we move forward, some have asked what makes the FBI the right agency to gather domestic intelligence? There are two reasons: one is that we have extensive experience sorting out the facts; and two, we have a longstanding obligation to protect civil liberties.

The FBI has always used intelligence as a tool in its mission to protect America. It is how we fought Nazi spies during World War II, Soviet espionage during the Cold War, and La Cosa Nostra in the seventies and eighties.

We bring hard won experience to the development of intelligence and the analysis of that information. Our historical need for evidence and witnesses to withstand the scrutiny of court review means the FBI brings judgment and rigor to source development and analytic work that is exceptional.

We are fortunate to live in the information age. But today, most people feel they have too much information, too many choices. The answer to strengthening America’s intelligence capabilities does not lie in more information, but in better information – more accurate facts. It is by establishing the factual basis of leads that we can aim our finite resources where they will be most effective. And it is in this area of culling the facts from the flood of information we receive that the FBI brings a special discipline to performing our intelligence responsibilities.

Perhaps most importantly, we conduct our operations while protecting the civil liberties of all Americans. We have decades of experience with the judgment calls necessary to operate within the limits of the Constitution, and it is our duty to do so.

We thoroughly train our special agents so they fully understand their obligation to respect the rights and dignity of those we serve. In addition to extensive instruction on Constitutional law, criminal procedure, and sensitivity to other cultures, new FBI agents visit the Holocaust museum to see for themselves what can happen when law enforcement becomes a tool for oppression.

The men and women who serve in the FBI are dedicated to upholding and protecting the law. We are also resolute in pursuing investigations, and we will use every tool that Congress has provided to protect Americans.

We live in dangerous times, but we are not the first generation of Americans to face threats to our security. Like those before us, we will be judged by future generations on how we protect freedom.

The primary reason for gathering intelligence is to ensure your safety. By improving the FBI’s intelligence capabilities, we can increase the most important aspect of terrorist intelligence information – its predictive value. In seeking intelligence information to prevent future terrorist attacks and criminal activity, we in the FBI, will live up to our obligation to protect the citizens of the United States as well as their rights under our Constitution.

Despite its elevated visibility, intelligence is nothing new. Around 1606, Shakespeare wrote his great tragedy MacBeth. Early in the play, three witches prophesy to MacBeth that he will become king. He questions their prediction. “From whence you owe this strange intelligence?” he asks. He wants to know if the information is good and whether he can believe it.

Some 400 years later, we in the FBI ask ourselves the same questions. And every day, we are working to make sure the answers we provide will help make Los Angeles, America, and the world a safer place in which to live.

Thank you for having me, and God bless you.