and its implementation. But establishing this new department, and the analytical center within it, will not completely solve our problem or reduce the risks. The missing component is the implementation of Intelligence Community reforms as well. I want to assure the Select Committee that the Intelligence Committee is equally focused on this urgent need to reform the civilian and defense elements of the Intelligence Community and we are in active discussions with the White House on such issues.

I appreciate the Select Committee's interest in the HPSCI's recommendations and I look forward to responding to any questions that panel members may have.

Mr. DELAY. Ms. Pelosi.

STATEMENT OF THE HONORABLE NANCY PELOSI, RANKING MINORITY MEMBER, PERMANANT SELECT COMMITTEE ON INTELLIGENCE

Ms. PELOSI. Thank you very much, Mr. Chairman. I am very pleased to join my distinguished chairman in our presentation to the select committee to develop legislation for a Homeland Security Department. I wanted to say at the outset that our committee always works in a bipartisan way. Particularly I want to commend Mr. Goss for the bipartisan leadership. He is always open to our suggestions.

We worked hard for our presentation to you today because there were so many different suggestions and proposals and because, frankly, we are walking on sacred ground now. This hearing takes place in the context of a joint inquiry that we are having in our Committee on Intelligence with the Senate. We will have some hearings tomorrow, we had some yesterday, and that are concurrent with these hearings.

We have a common purpose in having the product of our work give some comfort to the families who were affected on September 11th: to reduce risk to the American people and to protect our civil liberties as we protect the American people.

We began our deliberations in our joint inquiry with a moment of silence in recognition of the suffering of those families but also the gravity of the responsibility that we have there. We also in the select committee have a tremendous responsibility.

Our chairman has presented some of the provisions of our amendment which we believe improves the legislation significantly. We should have a good suggestion. We have worked on these issues for many years. I would only like to add a couple of points, more than a couple, but some points as we go along.

As you know, our committee focused on title II of the bill, which is the relevant section, and we set forth the responsibility for the Under Secretary for Information Analysis and Infrastructure Protection, the functions transferred to this Department in this area, and the Secretary's access to information, the note on which the Chairman ended his remarks, especially intelligence information. The title also describes the protection to be afforded information, including protection from unauthorized disclosure and an exception from the Freedom of Information Act for information infrastructure information provided on a voluntary basis by the private sector.

I have some disagreement on that provision, but more on that later.

After wide-ranging discussion of several options, the committee voted 17 to 1 to recommend a substitute for title II. The substitute

contains many of the provisions proposed by the President, but also establishes a distinct entity within the Department of Homeland Security to produce all-source collaborative intelligence analysis and threat assessments. The committee recommends that the entity be called the Intelligence Analysis Center, that it be an element of the Intelligence Community, and that for budget purposes it be included in the National Foreign Intelligence Program.

Importantly, the Center is intended to provide intelligence support for all of the mission areas of the Department, whether these are the prevention of terrorism, protection of infrastructure, or the functions of the various entities transferred to the Department. Thus the committee recommendation calls for the intelligence elements of the Coast Guard, the Customs Service, the Immigration and Naturalization Service, the Federal Protective Service, and the El Paso Intelligence Center of the Drug Enforcement Administration to be transferred to the Intelligence Analysis Center, as well as the infrastructure protection entities specified in section 202 in the President's bill.

I would note that a member of our committee had concern over whether there will be sufficient analytic strength within the Department of Homeland Security as originally proposed. We recognized that this Department is to have a responsibility to a new kind of strategic analysis that will build on but be different from the analysis going on elsewhere in the Federal Government. Our recommendation provides a viable framework for the creation of a new analysis entity.

Questions remain, however, beyond the scope of the Intelligence Committee's review, over whether there will be sufficient resources provided to the Department to make this Center viable and meld its various analytic entities together, to provide training for the analysts, and to make its computer systems and databases compatible. The Intelligence Committee did not accept the proposition that a new domestic intelligence service along the lines of the British or Canadian model should be created. Far-reaching proposals outside the U.S. tradition should be subjected to considerable study, and the committee and the Senate Select Committee on Intelligence embarked on an investigation of September 11th.

I believe Congress should await the findings of the joint inquiry and we shouldn't try to include significant organizational changes, for example, FBI and CIA for the Intelligence Community, in legislation establishing the Department of Homeland Security.

Finally, I have my reservations which I expressed at the Intelligence Committee meeting about the provisions in the committee's recommendation that would exempt from the Freedom of Information Act information provided voluntarily by non-Federal entities or individuals related directly to the duties of the Under Secretary for Information Analysis and Infrastructure Protection. I fear this provision may be too broad in its scope and beyond what is necessary to satisfy the concerns of the private sector with respect to proprietary information about infrastructure vulnerabilities.

I believe the select committee should ensure that whatever is done in this area is narrowly targeted and precisely constructed. I say this with complete respect for the concerns that we have about

private sector information that is given to us for our national security purposes, but I think we should define it carefully.

As I always say, I love the freedom of a tightly-knit idea. I think we can achieve our national security goals, we can respect the legitimate concerns of the private sector and, of course, continue the FOIA protection to the American people that is important to us.

With that, Mr. Chairman, I again hope that the committee will accept the recommendation of our committee. We worked very hard on it. We had nearly unanimous support, certainly overwhelming bipartisan support for the proposal, and it was not without competition of many ideas to be presented here today.

Thank you for your attention, Mr. Chairman, and members of the committee.

Chairman ARMEY. Thank you both.

[The statement of Ms. Pelosi follows:]

PREPARED STATEMENT OF HON. NANCY PELOSI, RANKING MINORITY MEMBER, PERMANANT SELECT COMMITTEE ON INTELLIGENCE

Mr. Chairman, members of the Select Committee, I appear before you today as the Ranking Democrat on the Permanent Select Committee on Intelligence to describe the Committee's recommendations to the Select Committee with respect to the Homeland Security Act of 2002.

Our committee focused on Title II of the bill. Title II sets forth the responsibilities of the Under Secretary for Information Analysis and Infrastructure Protection; the functions transferred to the Department in this area; and the Secretary's access to information, especially intelligence information. The title also describes the protection to be afforded information, including protection from unauthorized disclosure and an exception from the Freedom of Information Act for infrastructure information provided on a voluntary basis by the private sector.

After a wide-ranging discussion of several options, the Committee decided by a vote of 17 to 1 to recommend a substitute for Title II. This substitute contains many of the provisions proposed by the President, but also establishes a distinct entity within the Department of Homeland Security to produce all-source collaborative intelligence analysis and threat assessments. The Committee recommends that the entity be called the Intelligence Analysis Center, that it be an element of the intelligence community and that for budget purposes it be included in the National Foreign Intelligence Program.

Importantly, the Center is intended to provide intelligence support for all of the mission areas of the Department, whether these are the prevention of terrorism, protection of infrastructure or the functions of the various entities transferred to the Department. Thus, the Committee recommendation calls for the intelligence elements of the Coast Guard, the Customs Service, the Immigration and Naturalization Service, the Federal Protective Service and the El Paso Intelligence Center of the Drug Enforcement Administration to be transferred to the Intelligence Analysis Center, as well as the infrastructure-protection entities specified in section 202 of the President's proposal.

I should note that members of our Committee had considerable concern over whether there would be sufficient analytic strength within the Department of Homeland Security as originally proposed. We recognized that this Department is to have a responsibility to do a new kind of strategic analysis that will build on, but be different from, the analysis going on elsewhere in the federal government. Our recommendation provides a viable framework for the creation of a new intelligence analysis entity. Questions remain, however, beyond the scope of the Intelligence Committee's review over whether there will be sufficient resources provided to the Department to make this Center viable and meld its various analytic entities together, to provide training for its analysts, and to make its computer systems and databases compatible.

The Intelligence Committee did not accept the proposition that a new domestic intelligence service along the lines of the British or Canadian model should be created. Far-reaching proposals outside the U.S. tradition should be subject to considerable study. The Committee and the Senate Select Committee on Intelligence are embarked on an investigation of the intelligence community before and after September 11 that may result in recommendations for change in the community's orga

nizational structure. I believe the Congress should await the findings of the joint inquiry and not try to include significant organizational change for the intelligence community in legislation establishing the Department of Homeland Security.

Finally, I have my reservations, which I expressed at the Intelligence Committee meeting, about the provision in the Committee's recommendations that would exempt from the Freedom of Information Act information provided voluntarily by nonFederal entities or individuals related directly to the duties of the Under Secretary for Information Analysis and Infrastructure Protection. I fear this provision may be too broad in its scope and beyond what is necessary to satisfy the concerns of the private sector with respect to proprietary information about infrastructure vulnerabilities, I believe the Select Committee should ensure that whatever is done in this area is narrowly targeted and precisely constructed.

Chairman ARMEY. The Chair recognizes the gentleman from Texas, Mr. Delay.

Mr. DELAY. I did read both your statements and I must say you did an excellent job in making an excellent presentation covering many issues that, frankly, are giving a lot of Members on both sides of the aisle, liberal to Republican-I mean liberal to conservative very high concerns about this particular office and the Intelligence Analysis Center.

Could you explain to me—I just I worry, because we seem to be breaking down that high wall that we have built to make sure that the CIA was not involved in our private lives, and now you are proposing that we take detailees from other existing agencies, including the CIA and FBI and NSA—and I would assume even maybe DIA? Is that also suggested?

Mr. Goss. Yes, sure.

Mr. DELAY. Is there a possibility that the Center would perform-could you make us feel better that there are enough protections in your proposal that individuals's privacy rights and civil liberties cannot be violated?

Mr. Goss. I think I can try and give you some satisfaction on that. We are talking about an Analysis Center, and the Center itself is going to be a place where information comes in from outside, and where requests for information are going to emanate to the outside. What you are looking for is the safeguards on how that information is collected outside.

Presently in our form of government, we have excellent safeguards over our foreign intelligence collection system. Basically that is why we call it the National Foreign Intelligence Program. We do not spy on Americans.

There is a secondary part which we are wrestling with, and there is a great debate which is not part of our presentation-we are talking about analysis, not what the analysts analyze, but the analysis capability, and that is the debate about how do we go ahead in our country and safeguard that democracy and freedom that we all care very much about, which is our hallmark; and how do we nevertheless get information that might be relevant through law enforcement personnel who are working in this country to prevent something of a terrorist nature from happening before it happens?

That is a very tricky and difficult question and probably more appropriately addressed to the Judiciary people than it is to the Intelligence people.

The Intelligence people are going to operate by the law.Now you are suggesting that perhaps that by having Intelligence Commu

nity analysts at work in homeland security, that we would somehow be breaking down freedoms. Let me assure you that we have Intelligence Community analysts working now in a number of agencies that deal with a number of problems, domestic and foreign in the United States. That is not uncommon. It is a question of the operation against an American citizen or American spying on an American. That safeguard is still there. But if you are the object of a law enforcement search, or you have broken a law and have attracted the attention of law enforcement authorities, those are the areas where your question goes, and I think that we do not try and address that in our bill.

Ms. PELOSI. If I may, Mr. DeLay, your question is music to my ears, because I think this is the challenge that we have. We all take an oath, every single one of us in public office, to protect and defend the Constitution. Again, as we protect and defend the American people, we have to protect and defend the Constitution. So we have a higher calling than other countries might have. Some had suggested an MI-5, which is a British model, which collects on the British people. We rejected even the beginnings of something like that in our deliberation. There are some who advocate for that, no one that I know of in the administration. So we have bipartisan interest in not collecting on the American people. And most us involved in this would fight to the death on that issue.

I have said over and over, because there are shortcomings in other aspects of our intelligence gathering analysis and dissemination, we should not say the answer is to spy more on the American people. The answer is to improve our collection abroad, to improve our analysis across the board, and to improve our dissemination so people know what it is that we have.

So I look forward to working with you to make sure that wethe Attorney General has rejected that, others in the administration, I don't know if I am at liberty to say because it was in our hearings upstairs but who have rejected that, and it is not a part of our proposal here today.

Mr. DELAY. I appreciate your answers. Thank you.

Chairman ARMEY. The Chair recognizes the gentleman from Texas, Mr. Frost.

Mr. FROST. Well, you both have talked about this some, but I wish you could elaborate if you would, briefly, n the factors that the committee took into account in not bringing more of the Central Intelligence Agency and Federal Bureau of Investigation into the Department of Homeland Security. I assume you did look at this carefully, and if you could indicate the reasons why you did not recommend more of a consolidation of these functions.

Ms. PELOSI. We will take turns going first, I guess. First of all, we were addressing the homeland security legislation and the section that applied to intelligence. I think the administration, rightly so, did not go down a path in the homeland security bill that talked about incorporating CIA, FBI, broadly in the bill.

We are, as I mentioned, we are in the middle of our joint inquiry. Before September 11th even, we were in the process of restructuring of the Intelligence Community. And in our bill last year, we said this will be the last bill that looks like this because with the