Good afternoon. It is good to be here among colleagues and friends. I would like to thank Harold Milstein—not only for the invitation, but for his leadership. To Mayor Bloomberg, Commissioner Kelly, my former colleagues in the U.S. Attorney’s office, District Attorneys, Tom and everyone at the Citizens Crime Commission, it is good to see you, and I thank you for coming here today.

With the end of the year upon us, it is a good time to take an accounting of where we are in our mission to protect our country against terrorism. And, given the events of 9/11 and the inspirational leadership that we have all seen from New Yorkers since that terrible day, there is no better place for us to take stock than here in New York City.

Someone once said that at moments of crisis, words are hollow vessels. I felt this again this morning flying into New York, remembering not only 9/11, but also my visit to Ground Zero just ten days after the attacks. Even for a Marine who thought he had seen it all, that day remains among the saddest of my life. I will never forget it. My heart and the hearts of all FBI employees remain with the victims, the victims’ families, and the people of this great city.

We have all been changed by 9/11. Nowhere is that change more apparent than in the FBI.

Let me start with an update on our war on terror. This truly is a war, a global war—from Kabul to Karachi, from Bali to Mombasa, from Sanaa, Yemen, to New York City. Preventing terrorism means identifying cells and disrupting their operations. And it means crippling and dismantling terrorist networks country-by-country, operative-by-operative, dollar-by-dollar, so that they no longer pose a threat to the United States.

2002 has been the first full year in this war, and looking back, much has been accomplished. We have taken the fight to Al-Qa’ida, to where they train, recruit, plan, and live. We have taken away their safe haven in Afghanistan. We have taken into custody more than 3,000 Al-Qa’ida leaders and foot soldiers worldwide. Here in the United States, we have charged nearly 200 suspected terrorist associates with crimes. Worldwide, we have prevented as many as a hundred terrorist attacks or plots, including a number here in the U.S.

These successes have come because of the singular, united focus of virtually everyone engaged in this war—law enforcement, intelligence, the military, and our diplomatic community. Every level—federal, state, local, international—has contributed its unique set of skills.

Nowhere is that more evident than here in New York. This city has been a leader in the war against terror since the 1920 bombing of the old J.P. Morgan building. That tradition of leadership continues today. Commissioner Kelly has done an outstanding job in leading the NYPD’s post 9/11 fight. The new Counterterrorism Division led by Frank Libutti, and the newly revamped Intelligence Division led by David Cohen, are models for the nation. Commissioner, my thanks to you, Frank, David, and the 40,000 officers and detectives who serve this city so well.

New York’s leadership includes the men and women of the FBI. Our Assistant Director in Charge here—Kevin Donovan—has picked up where the tireless Barry Mawn left off in the war on terror.

September 11 made the prevention of terrorist attacks the FBI’s top priority and overriding focus. While we remain committed to our other important national security and law enforcement responsibilities, the prevention of terrorism takes precedence in our thinking and planning; in our hiring and staffing; in our training and technologies; and, most importantly, in our investigations.

With this shift in priorities has come a major shift in the allocation of resources within the Bureau. We have doubled the number of Agents devoted to terrorism. We have hired nearly 300 new counterterrorism translators specializing in Middle Eastern languages. And, we have completely overhauled our counterterrorism program at Headquarters, centralizing our management and accountability, beefing up existing units, and adding new capabilities.

Essential to preventing future terrorist attacks is improving our intelligence analysis and predictive capability. The FBI has always been a collector of intelligence in pursuing its criminal cases. But with the mandate of prevention, we are now restructuring to provide proper analysis and dissemination of intelligence to all our partners in the war on terror.

We have taken a number of steps to build that capacity within the FBI. We set up a National Joint Terrorism Task Force at FBI headquarters, staffed by representatives from 30 different federal, state, and local agencies. This national task force coordinates the two-way flow of information and intelligence between Headquarters and the JTTFs around the country. We have quadrupled the number of strategic analysts at Headquarters. We are building a cadre of more than 700 analysts nationwide.

As a result of our efforts, we will now be able to produce a greater quantity and quality of analytical product, and to share that product more effectively with policy makers, with the intelligence community and with our law enforcement partners.

We are also completely upgrading our information technology capability in the Bureau. Our longstanding problems with information technology are well known. What is less well known is what we are doing to fix those problems and to add a whole new set of capabilities to FBI operations. We have brought in some of the best and brightest from private industry to lead this effort. These individuals—along with a range of outside experts—are bringing the Bureau into the digital age. From the rollout of new hardware, to the upgrade of critical networks, to the redesign of investigative applications, we are making progress. Thanks to these new initiatives, we will soon have a system that we can mine for data and analysis, and that will allow Agents to manage their case files electronically for the first time in history.

In step with these institutional changes have come important legal and cultural changes that are enhancing our ability to prevent terrorism.

Principal among these is the manner in which September 11 has torn down the legal walls between intelligence and law enforcement agencies. For those of you who followed the 9/11 hearings in Congress this fall, you may recall meetings between the CIA and FBI where it was unclear what information on a hijacker could be legally shared under the arcane set of rules and laws that was known as “the Wall.”

Since 9/11, we have breached the Wall. First, thanks to the PATRIOT Act and the recent FISA Appeals Court decision, we no longer have legal obstacles to coordination and information-sharing between the law enforcement community and the intelligence agencies. Law enforcement officers can now coordinate their approach to terrorist targets without running afoul of the law.

In addition to the collapse of the legal “Wall,” we have also seen the collapse of the cultural and operational wall between the FBI and CIA. Those who focus on stories of the feuding between the agencies back in the era of J. Edgar Hoover and Allen Dulles are overlooking the increased operational integration between the two agencies since 9/11. From my daily morning briefings with CIA officers and George Tenet to the widespread assignment of executives, Agents, and analysts between the two agencies since 9/11, the FBI and the CIA have become integrated at virtually every level of our operations.

The third wall we are tearing down is the one between us and our state and local partners. Our 11,500 FBI Agents are a small cadre compared to the nation’s 670,000 state and local law enforcement officers. We need every one of those officers to be fully integrated into the war on terror. That is why we created the National JTTF; that is why we have established JTTFs in all of our field offices; and, that is why we are standing up regional information sharing operations that will revolutionize the way we work together. These efforts are opening doors to cooperation that simply did not exist prior to 9/11.

This crumbling of pre 9/11 walls brings us to the issue of whether America should create a new domestic intelligence agency similar to the British MI-5. This idea is based on a faulty understanding of counterterrorism that sees a dichotomy between “intelligence operations” and “law enforcement operations.” This misunderstanding of counterterrorism has led some to conclude that we should separate these two functions and create a new domestic intelligence agency.

We have just discussed how important it is to break down walls to enable the sharing of information. Building new walls is going in the wrong direction. There is no reason to separate the two functions of law enforcement and domestic intelligence. On the contrary, combining law enforcement and intelligence grants us ready access to every weapon in the government’s arsenal against terrorists. We can now make strategic and tactical choices between our law enforcement options of arrest and incarceration and our intelligence options of surveillance and source development.

The wisdom of this approach has been clearly borne out. Over the last year, the FBI has identified, disrupted, and neutralized a number of terrorist threats and cells. We have done so in ways an intelligence-only agency like MI-5 cannot. Why is that? Because the FBI is uniquely situated for the counterterrorism mission.

We have the personnel, tools, and assets needed to do the job:

• We have a worldwide network of highly-trained and dedicated special agents;
• We have the intelligence tools to collect and analyze information on threats to national security;
• We have the law enforcement tools to act against and neutralize those threats;
• We have the expertise in investigations, and in the recruitment and cultivation of human sources of information;
• We have longstanding and improving relationships with state and local law enforcement, and they are the intelligence gatherers closest to the information we seek from each of our communities; and
• The FBI has nearly a century of experience in working within the bounds of the Constitution.

For these reasons, I am convinced that the people of the United States are better served by enhancing the FBI’s dual capacity for law enforcement and intelligence gathering and analysis, than by creating a new agency from whole cloth. It is for these reasons that I believe that, at this time in our history, establishing a new domestic intelligence agency would constitute a step backward in the war on terror, not a step forward.

There will come a time, and perhaps it is even happening today, when the majority of Americans will move on to other concerns, dreams, fears, and challenges. That is understandable. But for those fighting the war on terror, such a lapse would be a disaster. We are in a war, and we will prevail over our foe only if we are more determined, more relentless, and more resourceful.

This is a challenge that demands dedication and sacrifice. I want to say that I am tremendously proud of every man and woman in the FBI who is working so hard to meet this challenge. The longer I am in the FBI, the more I appreciate how privileged I am to call them my colleagues.

I want to close with a story that says a great deal about the intangibles of teamwork and courage that are so important to defeating terrorism. I have told this story before, but it bears repeating, particularly here in New York.

It is the story of Lenny Hatton, a Special Agent of the FBI, who was one of the many law enforcement officers lost on September 11th. Lenny was an exceptional Agent and a remarkable man. He was on his way to work on September 11th when he saw the World Trade Center on fire. He went straight to the scene and started working with police and firefighters to evacuate the buildings. Lenny was last seen helping a victim out of one of the buildings, and rushing back in to save more.

Several days after September 11, I attended Lenny’s funeral mass in his hometown in New Jersey. The last speaker was a close friend and colleague of Lenny’s, an individual by the name of Chris O’Connell. Chris talked about how Lenny devoted his life to serving—as a Marine, as a volunteer firefighter, as an FBI Agent, and as a husband and father. He recounted how Lenny served until his last breath, trying to lead people to safety from the World Trade Center. And at the end, in tears, he saluted Agent Hatton with the words: “Until we meet again, my partner, my friend.”

Chris O’Connell, you see, was Lenny’s partner, and Chris was and is a detective with the New York City Police Department. Lenny and Chris cared for each other like brothers. It didn’t matter that one worked for the FBI and one worked for the NYPD. They were a team.

Were he alive today, I think Lenny would be proud to see the team that has come together since September 11. That team is strong; it is unified; and it is single-minded in its determination to prevent a 9/11 from ever happening again. I am proud to be a part of that team, and I thank all of you here today for your hard work, your sacrifice, and your dedication to the cause of justice.

Thank you for having me today, thank you for your leadership, and God bless.