Thank you Chairman Lieberman, Senator Thompson and members of the Committee for having me here today. The urgency with which this Committee is addressing the critically important issue of homeland security is appreciated by all of us engaged in the war against terrorism.

September 11th has transformed the executive branch, including the FBI. Understanding this basic fact is essential to evaluating how the FBI fits into the President's proposal to establish a Department of Homeland Security and what we will provide to ensure this new department gets from the FBI what it needs to succeed. That is our obligation. Or put more bluntly, the FBI will provide Homeland Security the access, the participation, and the intelligence in whatever form and quantity are necessary for this new department to achieve its mission of improving and building domestic preparedness against terrorism in America.

Let me back up a little bit. In the immediate aftermath of 9/11 we began taking a hard look at ourselves to see how we could make a more collaborative, flexible and agile FBI. Even before 9/11, we knew we had to fix our antiquated information infrastructure and unbridle our Agents from overly burdensome bureaucracy.

Much has changed since then and much more is in the offing. And while I would be glad to discuss the details of what we are about, our most basic change complements the homeland security proposal in very fundamental ways.

Simply put, our focus is now one of prevention. This simple notion reflects itself in new priorities, different resource deployments, a different structure, different hiring and training, different business practices, and a substantially different information architecture.

More importantly, it is reflected in how we collect, analyze and share information.

So, for example, in the aftermath of the attacks of 9/11, more than half, or 6,000 of our 11,000 plus Agents were working on identifying the individual attackers, their international sponsors and, along with other agencies, taking steps to prevent the next attack. Today, 9 and ½ months later, the number of FBI Agents committed to counter-terrorism is approximately 2,000, or double the amount of our pre-9/11 commitment. But regardless of what that permanent number ultimately may be, what is important is that we will apply to prevention whatever level of resources, the entire agency if need be, necessary to address the threats at hand and we will do so in the context of the multi-agency effort repeatedly tested in our strategic operations center approach to counter-terrorism and information sharing.

In addition to committing manpower, 9/11 has triggered a wide-range of organizational and operational changes within the Bureau. Three I would like to note are the expansion of the Joint Terrorism Task Forces throughout the country, the creation of a National Joint Terrorism Task Force in Washington, D.C., and the substantial increases in our analytical capacity. All three are designed to promote better information sharing.

The Joint Terrorism Task Forces are chaired in 56 regions of the country by the FBI, and include members of other federal agencies such as INS, Customs, CIA and BATF as well as state and local law enforcement. Homeland Security will be included as well. The importance of these task forces is that they have transformed a federal counter-terrorism effort into a national effort and provide for very effective, real time information sharing. While there are 11,000 FBI Agents, there are 650,000 state and local law enforcement officials. Working with our federal law enforcement partners and our colleagues at the state and local level in task forces not only substantially increases the resources and scope of the effort to prevent terrorist attacks but also substantially enhances the collection and sharing of information, fundamental to effective intelligence support.

The national complement to these local or regional task forces is the National Joint Terrorism Task Force. The National Joint Terrorism Task Force brings a needed national perspective and focus to the local task forces. The national task force consists of both the FBI and other agency detailees - - and it will include the new department - - and operates out of the FBI's Strategic Information Operations Center. The task force will complement both the FBI's and the new department's analytical efforts and the inclusion of other agencies allows for the real time sharing of information with all the participating agencies.

On the analytical side, pre-9/11 our analytical numbers were woefully inadequate. The effect not only was inadequate operational support but also our ability to "finish" and timely disseminate intelligence was impeded. Thanks to considerable help from George Tenet -- he loaned us 25 experienced analysts and an experienced senior analyst to head up our new Office of Intelligence -- and the substantial resources Congress is providing, our ability to identify, analyze, "finish" and share intelligence is becoming much improved. This will very directly help Homeland Security and the CIA but, equally important, it will give us the actionable intelligence we need to support our own investigations.

Of equal importance to the FBI putting its own operational house in order is our relationship with the CIA. This relationship has a long history, and is the subject of much contemporary comment, most of it critical. But for those commentators, I would counsel caution. The relationship has changed, and is still changing, all for the better.

Even before 9/11 it was much better than it was five years ago. Since 9/11 it is better still, although our challenge is to continually improve, particularly in regard to information sharing. The most important single factor is that both George Tenet and I jointly brief the President every morning on pending terrorist threats against America. The positive consequences of this new relationship are found in FBI Agents working at Langley and CIA officers at FBI Headquarters. Moreover, the daily threat matrix is the joint product of the two agencies and seven days a week, we exchange briefing material, all to ensure we are working off a common knowledge base. Additionally, CIA officers have joined us on our Joint Terrorism Task Forces and the National Joint Terrorism Task Force and our Legal Attaches overseas work very closely with both the CIA and the Department of State.

I have spent a few moments on the FBI's post-9/11 operational characteristics and our relationship with the CIA for a purpose. The experience of the executive branch since 9/11 has only served to cement in my mind the need for a new Department of Homeland Security. Although the FBI and CIA are operating at higher levels of operational efficiency and connectivity, there still remains a need for an agency that is committed to improving, and in some cases, building from scratch, a defensive infrastructure for America. As a domestic law enforcement agency with its top priority the prevention of terrorist attacks, the FBI has, I believe, done an excellent job of responding to emerging threats. But there is much to be done beyond our purview. America's borders, transportation systems, manufacturing base, cities, residential communities, and financial institutions, to just name a few, would all benefit from a systematic upgrade in their defensive posture against not just conventional attacks, but chemical, radiological and biological attacks. Beyond law enforcement and intelligence gathering, such a structural upgrade requires an ongoing regulatory effort that must also have the capacity to react to new risks from a determined and opportunistic enemy. It must rally and incorporate the combined efforts of the private sector and the general public as well. This is a massive undertaking, which, when coupled with border security, is well beyond the capacity of the FBI.

Given the daunting challenge facing Homeland Security, the question naturally arises as to what intelligence capability the new department requires. The FBI's view on this matter is quite simple: Whatever it needs to properly do its job. The President's formulation in his proposal strikes me as proper. The new department as a matter of course will get all FBI "finished" intelligence analysis, and such "raw" intelligence as the president thinks it needs. But experience also tells me that the participation of Homeland Security on joint task forces, the national task force, and with us at FBI Headquarters, like our colleagues from the CIA do, will prove to be as valuable as anything else we do.

It also is worth stressing that the new department's mission is to provide America with a defensive backbone against terrorist attack. As such, it should be aware of the manifold nature of the threats it faces, but it should not lose sight of its preventive and anticipatory function by duplicating the efforts of the FBI and CIA that have thousands of agents, intelligence officers and analysts relentlessly investigating the items on the daily threat matrix.

That is why I think this proposal complements the reorganization we are implementing at the FBI and vice versa. As part of a changing culture, a senior CIA official participates in my daily case and threat briefings and, as I mentioned, CIA officials and analysts are throughout our counter-terrorism structure. The reverse is likewise true. This is so to ensure the CIA sees what we see and to ensure it gets acted upon. I would expect Homeland Security to be equally integrated, equally participatory.

Discussions of the FBI's relationship with Homeland Security have also raised the issue of whether the counter-terrorism division of the FBI should be transferred to the new department. My view is no. As a practical matter, such a move at this critical moment would disrupt our ongoing battle against terrorism. Al Qaeda is active both abroad and at home. In fact, given the mobility of the enemy, and its ongoing effort to recruit American citizens to its ranks, such distinctions are beginning to blur. The FBI's counter-terrorism team, intertwined with and supported by the rest of the FBI, and in concert with our colleagues in the CIA, has a substantial number of open and ongoing counter-terrorism cases.

And because I believe that these practical considerations at the moment should override other rationale for such a transfer, I will list certain substantial concerns about such a move.

Moving the FBI into the new Department would detract from the focus of both the new Department and the FBI itself. The FBI, while actively engaged in counter-terrorism duties, also has significant non-counter-terrorism law enforcement responsibilities. These responsibilities are best met through the clear operational management provided under the current system and best overseen by the Department of Justice. And while the FBI's counter-terrorism duties are focused on the prevention of terrorist acts, these duties also have a strong criminal law enforcement component that is critical to both prevention and prosecution, and that also are best served as currently organized.

The increased analytical capability of the FBI will enhance the new Department's analytical abilities as a separate entity. The FBI's analysis, informed by the distinct capabilities of the FBI, has a focus on information with a nexus to law enforcement. The new Department, as a customer of the FBI, will be able to draw on this information, as well as information from other agencies that will provide their own focus. This is one area where redundancy can be valuable because of distinctly different perspectives.

The FBI has established close working relationships with state, local and foreign law enforcement, and Department of Justice prosecutors, through its day-to-day work on a variety of crime prevention and prosecution matters. These relationships are critical to the FBI's counter-terrorism efforts, its other crime prevention efforts and to information collection across the Nation, and would be disrupted by moving the FBI to the new Department.

In sum, while the fear is that this new department will not get the information it needs, I believe we are doing that which will ensure that it does, and in ways that reflect the practical realities of information collection and law enforcement. Old rivalries and outdated equities went by the wayside on 9/11. I believe what we are doing will work, reflects the most practical arrangement and I have every expectation that the President and Congress will monitor this closely to ensure that it does.