FTN - 6/2/02

BOB SCHIEFFER, Chief Washington Correspondent: Good morning. The FBI director is in the studio with us this morning.

Mr. Director, we certainly appreciate that. I want to start right with what you announced this week, this reorganization, which sounds to me like the most significant and wide-reaching overhaul of this agency since J. Edgar Hoover molded it into the organization it is today, back during the Depression.

How long is this going to take?

ROBERT MUELLER, FBI Director: We've started putting the pieces into place already. I've got new persons I've brought on board to do counter-terrorism. Some persons from the field are very knowledgeable, have taken over the counter-terrorism division, so things are starting to take place.

Building up the analytical capacity, which is the critical piece of this, will take longer. Building up a technology that we need to analyze the various pieces of information that come into the FBI daily is going to take longer to put into place.

My hope is that we would have just about everything done within a couple of years. But we are not waiting. We are building up our intelligence capacity already by having 25 intelligence officers come over from the CIA to assist us.

We have -- are starting to put up an intelligence office. It'll be headed by a CIA intelligence officer. And the analytical capacity capability that we need we are already starting to put into place.

We're not there. We've got a lot to do. We have analysts that are overworked, but we are moving along.

And one of the aspects of the proposed reorganization that I proposed to Congress is also the hiring of almost 600 analysts over the next two to three years. And that, coupled with the advances of technology, ought to enable us to do a much better job than we have in the past, in making predictive analyses of the information that comes to us.

SCHIEFFER: One of the problems, obviously, as we've all come to understand and you have acknowledged, is the kind of lack of coordination between the various intelligence-gathering and agencies and the FBI.

I want to just ask you first about a rather sensational report this morning in the new edition of Newsweek. It says that the CIA had track two people who turned out to be terrorists, from January 2000, but sort of sat on the information. No one knew they were doing it.

One of them, we are told, had been linked to the bombing of the USS Cole, yet, this information was kept within the CIA to the point that, when one of these people's visas expired, it was renewed by the State Department.

Now according to the magazine -- and this is what I would like to get your comment on -- Newsweek says the FBI has prepared an elaborate chart, showing how they could have uncovered the terrorist plot on 9/11 if they had learned about these people that the CIA apparently knew about sooner. Is that, in fact, true?

MUELLER: Well, let me just tell you, I have not read the article yet.

I am aware that we were notified in August of two individuals who had links to a meeting in Kuala Lumpur -- this was August 2001 -- as to a chart or something like that.

I can tell you that we have done a great deal of work in the investigation that's taking place since September 11th to track individuals. But I am unaware of any document that would fit that description.

SCHIEFFER: Well, in fact, could you have prevented this terrorist plot in September, had you known earlier about these two individuals?

MUELLER: I really can't speculate on that.

SCHIEFFER: OK.

GLORIA BORGER, U.S. News & World Report: But is this the kind of connecting the dots that you've been talking about...

MUELLER: Yes.

BORGER: ... that you need to start doing?

MUELLER: Yes. I mean, we have to do a better job. And you go back to what has been in the papers and the news in the last couple of weeks, for instance, the Phoenix memorandum. I mean, what should have happened on that is that should have gone to the CIA earlier than it did. It should have gone and put together with the information that the agents in Minnesota had on Moussaoui.

And that's the type of thing that we have address, are addressing in the restructuring. We have to do a better job pulling these pieces together, analyzing them and disseminating them.

BORGER: On September 14, you yourself said that you had absolutely no warning that terrorists might be training at American flight schools. You've just mentioned the Phoenix memorandum and the Minnesota one. When were you notified?

MUELLER: After that -- some time after that press conference, I believe it was a little bit later in September.

BORGER: And then when did you inform the attorney general about these memos?

MUELLER: Well, let me put it in perspective. After -- I mean, I arrived at the FBI on September 4. September 11 occurred on the seventh day of my being there. Our efforts at that point were basically three-fold.

Number one is to assure that there wasn't going to be a second wave of attacks and didn't know that. We had planes flying that afternoon, but we needed to assure that that wasn't the case.

Secondly to find out who was responsible for these acts and that I believe the Bureau and the agency did a superb job in tracking down the movements of the 19 and identifying them and putting it at the feet of bin Laden and thirdly, to prevent other terrorist attacks. That is what we're looking at.

We were not looking at what happened prior to September 11.

But to get back to your question, so I don't lose it all together. I may have mentioned in passing to the attorney general some time in fall, I don't really recall. That was not the focus of what we were doing at that time.

BORGER: And was any decision made to not -- a conscious decision made to not tell the president or the national security advisor?

MUELLER: No, no. Not at all. I mean, what we were focused on is protecting the American public. That is what we were focused on at that point.

And I think it is important to go back and look at what happened prior to September 11. It's important to do that in order to make certain that we don't repeat those mistakes and the intelligence committee is doing that.

To the extent that the Phoenix memorandum or the Moussaoui investigation or arrest need to be looked at, I have sent that to the inspector general for a careful review to determine if they're individuals that should be looked at or their conduct looked at or what suggestions the inspector general would have as to how we can do it better.

SCHIEFFER: Let me just, and I don't want to dwell on this but, as you know, in the memo from Agent Rowley where she suggested maybe the FBI had been sort of circling the wagons to cover up its own mistakes.

Are you telling us that you did not make a conscious decision to keep this information from the president or from the people on the National Security Council because you feared that it might put the FBI in a bad light?

MUELLER: Oh, far from it. My expectation all along is that we will be doing a retrospective. It was not in the turbulent times, the turmoil following September 11. It was not high on the scale of priorities at all.

We were not thinking of that. Our understanding as the fall advances was that there was going to be a retrospective. It was going to be done by the joint intelligence committees and my direction to everybody at that time was, we will provide whatever is necessary to present the full record to the intelligence committees.

Much of what is in our files relating to counter terrorism and what we had in our files prior to September 11 is classified. But my direction has been let's get that information to the intelligence committees and if I could, just one last point.

And the day -- the first day that they came to pick up our records we gave them the Phoenix memorandum and other documents that we thought they would be interested in.

SCHIEFFER: Well let me just ask you this, Mr. Director. Circling the wagons is sort of a bureaucratic habit. All bureaucracies tend to do that unless they're forced not to. Has there been a circling of the wagons in the FBI and what are you telling the FBI now about that to make sure that it doesn't happen in the future?

MUELLER: The -- I tried to be as accurate as I can in my answers and precise in my answers when I give them whether it be to the media or to Congress. Occasionally I slip up and talk about, for instance, the Phoenix EC where I did not have it and I said something. But try to precise. I expect everybody else to try to be precise also and answer the questions honestly and forthrightly.

When I go out in the field I tell the field that I want to know not the good news, I want to know the bad news. The good news always filters to the top.

I want to know what's wrong with the Bureau. With the memorandum from Ms. Rowley, it's difficult to take criticism, but it's important that we take criticism, and we should.

BORGER: Given this reorganization that you're proposing, how should the American people judge the effectiveness now of the FBI? You know, what are the guidelines? Are you going to tell us you prevented x number of terrorist attacks or...

MUELLER: No, we cannot do that.

BORGER: I mean, how can they judge that?

MUELLER: We have -- I will tell you right now, we've prevented a number of terrorist attacks around the globe since September 11th, and cannot, because most of it isn't classified, reporting cannot say, OK, this is what we did here.

I think the American public looks to us to be more interconnected with the other agencies, the CIA, now the Defense Department in Afghanistan, and looks to us to articulate a transformation of the agency in such a way that the American public knows that we are out there preventing terrorist attacks, as opposed to just making a case for presentation in the courtroom.

SCHIEFFER: Did you just say there have been some terrorist attacks that have been prevented since 9/11?

MUELLER: Yes.

SCHIEFFER: If so, can you tell us about any of that? How many, would you say, dozens or...

MUELLER: I can't, I'm not going to speculate, but yes, I'm confident, both in the United States and overseas. I mean, there are a number that have become public overseas, for instance, in Singapore, in Spain, in Paris. I mean, they have been public for a substantial period of time.

SCHIEFFER: In the United States?

MUELLER: There have not been any that have been made public.

SCHIEFFER: What does that mean?

(LAUGHTER)

MUELLER: There have been -- I believe that there have been threats that we have thwarted within the United States.

SCHIEFFER: That would have happened, had they not been prevented?
MUELLER: I can't (inaudible)

SCHIEFFER: Yes, I understand.

Well, there was one report this week, for example, that terrorists have brought in shoulder-held missiles that might be used against commercial airliners. Is that in fact true? I have been told by some that that report is without foundation, others say it may be.

MUELLER: I do not believe there is a report out there saying that terrorists have brought what they call "MANPADS" into the United States, what I think a report indicated is that at an airfield overseas -- and I'm not certain which airfield it was -- there was a broken-down MANPAD found near the airfield...

SCHIEFFER: I see.

MUELLER: ... and alerting -- the only information that has gone out is alerting state and local law-enforcement officials that one was found overseas.

SCHIEFFER: You are now -- and you told us before the broadcast, and, I mean, it's public knowledge -- that you now brief the president daily. That used to be done only by the director of the CIA.

Tell me a little bit about how that works. I think people would like to know that.

MUELLER: Well, the president has always, at least prior to my time in early September, been briefed by George Tenet. Mr. Tenet gives a (inaudible) Palestinian-Israeli war or India and Pakistan, and that kind of thing. And then there we go in and discuss with the president what's called the Threat Matrix and that is a listing of the threats that have come in the night before and the day before and the president asked questions about what we have done to assure that those threats are thwarted.

And it's -- the question is not how many people the FBI has arrested or prosecuted, it's what has the FBI done in the last 12 hours to assure the safety of the American public and it's what has the CIA done the last 12 hours to assure the safety of the American public.

And the way I think I and others look at this, it's a war on Al Qaeda. Al Qaeda has, basically, declared war on us and they're in three phases of it: one is the military overseas, which is the offensive, and the CIA that's working with the military and overseas and we have the FBI in the United States.

And we have to work together to assure that from the first thought, in some country overseas, whether it be Afghanistan or Pakistan or some place else, about causing harm in the United States, it is picked up by the military, by the CIA or by us, so that we have three levels of defense.

SCHIEFFER: All right. Mr. Director, we have to stop it there. Thank you so much for coming by.

MUELLER: Thank you.

SCHIEFFER: I hope we'll see you again.

MUELLER: Thank you very much for having me.

SCHIEFFER: Back in a moment with more from members of the Senate Judiciary Committee.

(COMMERCIAL BREAK)

SCHIEFFER: FBI Director Mueller will be going before the Senate Judiciary Committee to talk about some of the things he talked about this morning. He'll do that later this week.

One of the people who will question him is Senator Arlen Specter, Republican of Philadelphia, in Pennsylvania, who's in Philadelphia this morning. The chairman of the committee is Democrat Pat Leahy, who is in his home state of Vermont.

Chairman Leahy, you just heard the FBI director. The Wall Street Journal this week suggested that perhaps part of the FBI reform ought to be that Chairman Mueller resign. He has already said he has no intention of doing that, but I guess it begs the question of you: do you retain confidence in the director?

SEN. PATRICK LEAHY, D-VT: I have complete confidence in the director. I thought it was a kind of an Alice in Wonderland editorial asking for him to resign.

He became head of the FBI a few days -- I mean, literally a few days before September 11th, he's been doing everything to try to correct all the mistakes that were made leading up to September 11th. He's the last person that should resign.

There are a whole lot of people who may be culpable, who made a whole lot of mistakes prior to that, in the Justice Department, or anywhere else, but Bob Mueller's not one of them. I think the country ought to be glad he's there. I think we ought to get off his back. I think we ought to help him go forward.

That doesn't mean you don't ask questions of the FBI. Of course we do. For example, Senator Specter has raised a very good question, whether Coleen Rowley, the whistleblower, should testify. I intend to call Agent Rowley to our committee on Thursday, and I've also notified Attorney General Ashcroft that I will watch very carefully to make sure she's given all the whistleblower protection. I don't want, because she raised problems, that she then be made a scapegoat herself.

BORGER: Senator Specter, let me ask you, what would you like to ask Ms. Rowley?

SEN. ARLEN SPECTER, R-PA: Well, the first thing I want to ask her is what were the misrepresentations which she charges that Director Mueller made? I would like to pursue Director Mueller, when he testifies, when he talks about correcting problems in two years, I can see long-range solutions, but I think there has to be a more immediate response to putting together obvious pieces, like the Phoenix memo and the Moussaoui investigation, and what we had learned back as far as 1995 and 1996 that there were plans to attack the CIA headquarters, the White House, and the plans to attack the Eiffel Tower, so that we knew that they were after tall buildings.

I'm also very interested to know what happened with an FBI internal memo calling for $58 million in additional funding, which, according to the media reports, Attorney General Ashcroft rejected on September 10.

These are the sort of items which ought to come before the Judiciary Committee in our oversight capacity. And when we have Agent Coleen Rowley in, we're going to find out the details as to why they didn't get the warrant under the Foreign Intelligence Surveillance Act, and what happened up the chain of the command to thwart a very impressive investigation the Minneapolis office was making.

SCHIEFFER: Senator Leahy, the FBI director announced a wide-ranging set of reforms, and actually shifting the agency's mission, in some cases, shifting it more toward tracking down and finding terrorists before they commit terrorist acts.

Are you satisfied with the reorganization that he outlined this week?

LEAHY: Well,...

SCHIEFFER: Does it go far enough? Does it go too far? What's your thought?

LEAHY: One of the reasons we should have these hearings and go over is to find out just where reorganization is going. If you're simply shifting people around for the sake of shifting people around, that accomplishes nothing. If you're actually doing it to prevent terrorist attack, then it's well worthwhile. But I want to know how it's going to be prevented.

I think that there's been too much time spent in the past with the FBI going after crimes that could easily be handled by local and state police, sheriffs' departments, and so on, and not enough time put on those things that only a national law-enforcement agency can take on.

But I'm also concerned -- you mentioned earlier in the program the Newsweek story. I've pulled that up on the Internet in my farmhouse in Vermont this morning and read it. There are a lot of questions in there that I asked back in May, and follow-up questions from the FBI's last appearance. I want to know the answers to that.

It's not just the reorganization. I think we also have to ask, in our oversight capacity, where were the mistakes made in the past, not so much to beat up on somebody, but to make sure the mistakes don't happen again in the future.

If you have all this information -- the CIA's holding some, the FBI's holding some, the attorney general's office is holding some -- why don't they pull it together? And reorganization by itself won't pull it together, learning from those past mistakes might.

BORGER: Senator Specter, would you like to hear from the former FBI Director Louis Freeh, as well?

SPECTER: I think that would be a good thing to do. I think overall Director Freeh did a good job. He made changes on the use of deadly force after our Ruby Ridge oversight investigation, which I chaired. Senator Leahy was on the subcommittee. There were some very serious gaps in what the FBI had done on the Wen Ho Lee case, for example. But when you come into the issue of counterintelligence, I think it would be very useful to get the chronology as to what Director Freeh had seen, and what he had done, or what he had not done.

SCHIEFFER: Senator Leahy, I want to ask you something that I did not ask -- we just didn't get to it -- the director about this morning, but other people in the FBI had told me this, that one of the reasons that the FBI was so reluctant to deal with this situation with Moussaoui and the reports that a lot Arab students were suddenly in flight schools is that they're so afraid of being criticized for racial profiling.

Do you think that is a part of what's gone wrong here?

LEAHY: If that is part of what's going on, then that is the weakest, slimmest, most ridiculous excuse that could be used. The fact is, you go after criminals, whoever they are. You go after people who are going to threaten us, whoever they are. Both Senator Specter and I are former prosecutors. We knew you didn't set the law differently depending on the color of somebody's skin or what their religion was.

If they were committing a crime, you went after them. So it would be pure balderdash to suggest that that should be holding them back. Maybe it did, but it'd be the weakest, slimmest possible excuse. Also, when you're talking about Director Freeh ...

SCHIEFFER: Yes.

LEAHY: ... we asked Director Freeh to come before our committee as he was leaving...

SCHIEFFER: I'm sorry Senator Leahy, we absolutely have to end it at that point.

Thanks to both of you.

And one other thing I want to mention, last week on the broadcast, we referred repeatedly to that FBI memo from Agent Coleen Rowley. What I did not mention was that we had the memo because it had been leaked to Time Magazine. I meant to mention that, and for some reason, perhaps senility, I just forgot. I'm sorry.

Be back with a final word in just a minute.

(COMMERCIAL BREAK)

SCHIEFFER: And on another subject today, when America built the atomic bomb, Soviet leaders decided they had to have one, too, to ensure the United States would never attack them. But when the Soviets got the bomb, it made the Chinese nervous, so they built a bomb, as insurance against a Soviet attack. That caused India, one of the poorest nations in the world, to build a bomb as insurance against a Chinese attack which, of course, made India's even poorer neighbor, Pakistan, feel threatened. So Pakistan, too, bought a nuclear insurance policy.

And that is how an argument over who owns some territory along the India and Pakistan border has again brought the world to the brink of nuclear war. War, if it comes, that may leave 12 million dead, 7 million injured -- numbers that roughly equal the combined population of Sweden, Denmark and Norway.

And then there's the impact on the world climate, an environment no one knows what that would be. We ask ourselves how an argument over real estate could come to this. The answer is step by step and that's always been the problem with nuclear insurance. It reduces one threat, but always creates another. America beat the Soviets in the nuclear arms race, but this new crisis reminds us the possibility of a nuclear holocaust is as real as ever.

We pay a high price for nuclear insurance.

That's it for us. We'll see you next week on Face the Nation.