First, let me thank Helle Dale and John Hulsman for their kind invitation to share my thoughts on intelligence reform with such a distinguished audience. It is indeed a pleasure to be associated the Heritage Foundation. For over thirty years this institution has remained true to its original purpose of formulating and promoting conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense. The Heritage Foundation certainly has earned the reputation for being one of the premier think tanks in our nation's capital.

Just three weeks ago, President Bush signed into law the most sweeping intelligence reform legislation since the National Security Act of 1947. The centerpiece of this intelligence reform is the creation of a new position to lead our intelligence community called the Director of National Intelligence (DNI). The DNI will not head any single agency, as was the case when the 1947 National Security Act created the Central Intelligence Agency and dual-hatted the Director as the chief intelligence officer of the U.S. as well as running the CIA. Another positive aspect to the legislation is the creation of the National Counterterrorism Center (NCTC) that will conduct strategic operational planning for joint counterintelligence operations.

Creating the DNI and the NCTC were extremely important decisions. However, they only mark the beginning of a long process, not the end. Today, I would like to address several issues and questions relative to the intelligence reform legislation. First, why was it necessary?

The answer to this question may seem obvious, but it is worth repeating. Over the last decade, our intelligence community has failed us. It wasn't able to penetrate the al Qaeda terrorist organization and we paid a high price for this failure. Prior to the first ever attack on the U.S. mainland on 11 September 2001, we failed to interpret, analyze, and share information gathered.

Later, the intelligence community failed the President by presenting an inaccurate analysis of the quantities and capabilities of Saddam Hussein's weapons of mass destruction (WMD) and we subsequently learned that the CIA did not have a single agent inside of Iraq to verify the true state of these programs before we attacked Iraq in 2003.

Today, the intelligence community is struggling to stay ahead of a host of threats to our security, from the insurgency in Iraq that is taking American lives on a daily basis to the continuing war on terrorism to the nuclear threat posed by Iran and North Korea, to name but a few. Let me be clear, there is an intelligence breakdown every time an improvised explosive device, or IED, is detonated in Iraq killing American soldiers.

My second question is whether or not the intelligence reform legislation actually addresses our real concerns and weaknesses in the intelligence community? Let me approach this question by talking about traditional espionage, known as human intelligence, or HUMINT - or simply spying.

Americans like technology, and we are good at it. Our ability to monitor certain activities via satellites, signals intelligence, or other technical means, while not perfect, is pretty good. Our weak point is HUMINT, which has atrophied to the point that it must be rebuilt. HUMINT, relative to the other intelligence disciplines, can tell us what the enemy is thinking. The strength of good HUMINT is that it can answer this key question: What are the enemy's intentions about when, where, and how to strike?

As the Chairman of the Subcommittee on Terrorism and Homeland Security in the House of Representatives, I, along with Ranking Member, Representative Jane Harman, submitted the first detailed report to Congress in July 2002 on intelligence deficiencies that existed prior to 11 September 2001. We identified systemic problems in the CIA.

We pointed out that they had lost their focus on HUMINT missions and needed to put more collectors on the streets, rely less on other foreign intelligence agencies, and find ways to penetrate terrorist cells. I am particularly pleased that immediately following the release of our report the CIA rescinded the so-called "Deutch guidelines" that were implemented in 1995. Those guidelines prohibited the expenditure of tax money being paid to individuals providing us intelligence if they had a criminal record or any kind of disparaging record in their past.

Having met personally with CIA agents in countries with known terrorist activities, I heard first-hand how these guidelines, while relaxed post 9-11, were still a major hindrance for our agents to collect and gather intelligence. Terrorist networks like al Qaeda are comprised of the meanest, nastiest killers in the world and it was simply not smart for us to limit whom our intelligence agents could recruit to infiltrate terrorist groups. For us, this was a small but important victory with respect to improving HUMINT.

We also noted that there were significant problems in sharing intelligence within the intelligence community, especially between the CIA and the FBI.

HUMINT is a dirty business, a dangerous profession, and we must be prepared to accept the risks associated with spying on those who seek to harm us, whether they be a terrorist group or a rogue nation-state like North Korea that is developing the means to deliver nuclear weapons to close and important allies, like Japan, or to our own state of Hawaii or even the Pacific coast of the continental United States.

The "risk-avoidance" culture that has infected the CIA and prevented us from getting into the inner circles of al Qaeda or the regime in Iraq before the 2003 war must be changed, and Porter Goss is working hard to do just that. However, it will take time and a team dedicated to a new way of thinking.

All of our intelligence capabilities need improvement, but I want to stress that HUMINT is where we need to put our priority of effort. Not all intelligence collection disciplines are of equal importance for every threat that we face. And, it is clear to me that HUMINT offers us the best chance to protect ourselves and successfully win the war on terrorism.

So, how does the new intelligence reform legislation measure up relative to HUMINT? During the national debate on intelligence reform last year there was general acknowledgement that HUMINT needed to be improved; however, it was not afforded the primacy in the legislation I thought it deserved. In fact, HUMINT is not even mentioned once in the 26-page summary of the Intelligence Reform and Terrorism Prevention Act of 2004 prepared by the Congressional Research Service (CRS), which is a department of the Library of Congress! The reason al Qaeda was able to attack us was because we didn't have spies to infiltrate their organization. It had nothing to do with intelligence budget execution or the reprogramming of funds.

During the implementation of the intelligence reform legislation, the Congress must make sure the primacy of HUMINT is emphasized and the morale of our intelligence officers, especially those serving in dangerous under-cover positions, is protected while the intelligence community enters a period of turmoil caused by the reform legislation. And turmoil there will be. In this regard, it is my hope that the Senate Select Committee on Intelligence will introduce a subcommittee structure and that one of the subcommittees should be devoted to HUMINT.

Another aspect of the intelligence reform debate that concerned me was the amount of discussion on the size of the overall intelligence community budget controlled by the Department of Defense.

It is abundantly clear that we don't have enough spies on the ground and that we need to make this an issue of the highest priority. Yet, somehow during the debates in Congress and among the political pundits in the media on intelligence reform the focus shifted from fixing our HUMINT capabilities and further improving information sharing within and among all relevant agencies of the government to discussing why there is such a large percentage of the total U.S. intelligence budget in the Defense Department.

As some see it, the military's share of the overall intelligence budget, estimated at about 80 percent, is too large and if a portion of this was transferred to the DNI, our intelligence capabilities would somehow improve. The apportionment of the intelligence budget is a legitimate issue to discuss, but we should not allow it to divert our focus from the pressing problems that need fixing, such as HUMINT and information sharing.

HUMINT is a relatively inexpensive intelligence discipline when you compare it to high technology systems and platforms used by the military. When we put a military intelligence satellite into orbit, the intelligence budget needs to pay for its research and development and production, the launch vehicle, ground stations, support personnel, and communication links. The military collects intelligence from a great variety of platforms, in addition to satellites: they use ships, submarines, aircraft, UAVs, ground vehicles, and small sensors used by individual troops on the ground. In order to move the vast amounts of intelligence worldwide, securely and in near real-time, the military has built information networks that are the best in the world and continually improve them with new technologies. So it should not be at all surprising that the military's share of the intelligence budget is so large.

Now let me discuss an issue that was not included in the recently passed legislation but one that should be added to our national debate on intelligence reform. The issue is, how will the DNI interact with the military and vice-versa?

The DNI will inherit an intelligence community made up of fifteen separate members, eight of which are in the Department of Defense. Collectively, these eight members are huge, with tens of thousands of uniformed military and civilian personnel and multi-billion dollar budgets. How someone outside of the military, like the DNI, could adequately and efficiently manage these vast intelligence capabilities by dealing with eight separate Department of Defense members is beyond me. This is a major issue, and it must be addressed; otherwise the DNI may have an unrealistically large span of control.

That is why I, in conjunction with my Democrat colleague from Nebraska, Senator Ben Nelson, plan to reintroduce legislation in the new Congress to create a four-star command for military intelligence, or INTCOM. This command would, for the first time, bring the majority of the intelligence capabilities in the Department of Defense under a single commander.

INTCOM would be the single point of contact for the DNI in dealing with military intelligence. The INTCOM Commander will have the dual responsibility of being the one source for informing the DNI of military intelligence requirements requiring support from the entire intelligence community and being the one source for assigning military intelligence capabilities to assist in fulfilling the DNI's broader intelligence responsibilities.

One of the U.S. Army's nine Principles of War is Unity of Command. When this principle is properly used, there is a common focus on reduction of duplication and wasted efforts, vastly improved coordination, and - above all - accountability. The military has already applied this principle very successfully to several functional areas and created unified combatant commands for Transportation, Joint Forces, and Special Operations. The latter one, by the way, was established by legislation over the objections of the then Secretary of Defense and the Chairman of the Joint Chiefs of Staff.

There is no objection today, however, to our Special Operations Command or any other unified command. The fact is, whenever the military has created either a functional or a geographic unified command, we have seen better focus on the mission, better support from the military services, and improved capabilities. A unified command for intelligence will have the same benefits.

One of the major responsibilities of the DNI will be to better integrate the current fifteen members of the U.S. intelligence community. The DNI's task will be far easier to accomplish if there is an INTCOM commander to coordinate the disparate eight Department of Defense members into one, thus reducing the total number of intelligence community members from fifteen to eight.

Now let me turn to information sharing. Intelligence is not an end in itself, but it is a very necessary ingredient to formulating good policy and protecting our nation's interests. The key is to harness all the information we have and put in into a form that is manageable and useful. Integral to this process is the ability to share the information with those who need it and to continually update it.

Imagine a commercial travel web site like Expedia.com or Travelocity.com. You want to travel on a certain date, you access the database, and the program gives you every possible flight, connection, times, prices, and will also get your hotel and rent-a-car reservations. In short, every bit of information about traveling to your destination is at your fingertips for you to make your decision. We need an Expedia.com or a Travelocity.com for intelligence. Our analysts and policy makers should be able to access common databases where information is constantly being posted as it comes in so they can get the most complete picture possible.

As you can see, I strongly believe the process of intelligence reform is just beginning and there is a lot of important work ahead to make sure we get it right. And getting it right includes providing accurate information, in a timely manner, to those who need it, whether that is the U.S. President or a U.S. Army private.

We have made an important decision in creating a Director of National Intelligence who is not beholden to the CIA, the Department of Defense, or any other agency. It is a good step, but it is just the first step in a long process of intelligence reform.

If the new intelligence reform legislation does not allow us to "connect the dots" and have more "dots to connect" to prevent further attacks on the U.S. and U.S. interests then we have failed in our effort to reform the intelligence community.

No one knows at this point if the new legislation will work or not. But, as I have pointed out here today, it has a better chance to succeed it we keep focused on these points:

• Recognize the problems with HUMINT and take the necessary steps to fix it, including accepting the risks associated it, so we can actually infiltrate organizations bent on our destruction;
   
• Improve the quality of Congressional oversight of the intelligence community by instituting a subcommittee structure in the Senate Select Committee on Intelligence;
   
• Organize military intelligence by bringing unity of command to the enormous defense intelligence community to better help the DNI succeed in bringing unity of effort to the broader intelligence community; and
   
• Devise ways to improve information sharing, and the management of enormous amounts of intelligence. In this regard, we could take some lessons from our commercial databases.

The Honorable Saxby Chambliss is a United States Senator from Georgia and serves on the Senate Select Committee on Intelligence.