<html><body><P>American Enterprise Institute</P> <P>September 8, 2006</P> <P>[Edited transcript from audio tapes]</P> <P> </P> <P> <TABLE cellSpacing=1 cellPadding=1 width="100%" border=0> <TBODY> <TR> <TD> <DIV class=BodyText>8:30 a.m.</DIV></TD> <TD> <DIV class=BodyText>Registration and Breakfast</DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText>9:00</DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText><STRONG>Panel I: The Global War on Terror</STRONG></DIV></DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText><EM>Panelists</EM>:</DIV></DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText>Max Boot, Council on Foreign Relations</DIV></DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText>David Gordon, Office of the Director of National Intelligence</DIV></DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText>Frederick W. Kagan, AEI</DIV></DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText>Richard Shultz, Tufts University, Fletcher School</DIV></DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText><EM>Moderator</EM>:</DIV></DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText>Danielle Pletka, AEI</DIV></DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> <DIV class=BodyText>10:15</DIV></DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText><STRONG>Special Session: AEI Studies on Public Opinion: America and the War on Terrorism</STRONG></DIV></DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText><EM>Presenter</EM>: </DIV></DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText>Karlyn H. Bowman, AEI</DIV></DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> <DIV class=BodyText>10:50</DIV></DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText><STRONG></STRONG> </DIV></DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText><STRONG>Panel II: The State of Homeland Security</STRONG></DIV></DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText><EM>Panelists</EM>:</DIV></DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText>Clark Ervin, Homeland Security Initiative, Aspen Institute</DIV></DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText>Michael O'Hanlon, the Brookings Institution</DIV></DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText>Robert Powell, University of California at Berkeley</DIV></DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText><EM>Moderator</EM>:</DIV></DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText>Gary Schmitt, AEI</DIV></DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> <DIV class=BodyText>Noon</DIV></DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText>Luncheon</DIV></DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText><STRONG><EM></EM></STRONG> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> <DIV class=BodyText>12:30 p.m.</DIV></DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText><STRONG><EM>Keynote Speaker:</EM></STRONG></DIV></DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText>Stuart Levey, under secretary of treasury for terrorism and financial intelligence</DIV></DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> <DIV class=BodyText>1:30</DIV></DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText> </DIV></DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText><STRONG>Panel III: Law & Order</STRONG></DIV></DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText><EM>Panelists</EM>:</DIV></DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText>Heather MacDonald, Manhattan Institute</DIV></DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText> <DIV class=BodyText>Jeremy Rabkin, Cornell University</DIV></DIV></DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText>John Yoo, AEI, University of California at Berkeley, Boalt </DIV></DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText>Hall School of Law</DIV></DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText><EM>Moderator</EM>: </DIV></DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText>Fred Thompson, AEI, former U.S. Senator</DIV></DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText> </DIV></DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText> </DIV></DIV></TD></TR> <TR> <TD> <DIV class=BodyText>3:00</DIV></TD> <TD> <DIV class=BodyText>Adjournment</DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR></TBODY></TABLE></P> <P>Proceedings:</P> <P>Panel I:  The Global War on Terror</P> <P>Danielle Pletka:  Thank you very much for being here.  I am Danielle Pletka, I m the vice president for foreign and defense policy studies here at the American Enterprise Institute.  It s really hard to believe that almost five years have passed since 9/11.  Like each and every one of the very few days of infamy in our own century, I think most of us remember just where we were at the moment that we heard of the attacks on 9/11.  While that picture is still very vivid in our minds, a great deal has changed and I think for some, especially in our body politic, the picture has dimmed a great deal more than I would have expected at the time.</P> <P>But for better or worse, 9/11 was a turning point in American history.  American foreign policy has changed.  Our government has been restructured.  Vast new bureaucracies have been created.  Laws have been written and rewritten.  For good or ill, the American people have changed for good.  </P> <P>But are we smarter?  Are we safer?  On the latter question, polls indicate that people don t feel safer.  I imagine however that at least like me and probably many of us on September 10, 2001, they did feel safe.  They were wrong.  That safety was illusory and now too we should view polls about how people feel about their own safety and security with a similar grain of salt, after all, in those five years we have not been attacked again on our own soil.  Whether you like the characterization or not, the fight has been taken to the enemy.  We are vulnerable now, as perhaps we have not been vulnerable in past history, but we are fighting terrorism at its heart with a commitment that also did not exist before 9/11.  </P> <P>That fighting is occasioning more controversy than most of us would have predicted.  Five years is a short time but apparently long enough for some to forget the unity and purpose that brought us together.  It turns out that when Congress deemed it appropriate to arm our elected leaders with all means necessary to fight this war on terrorism, they didn t mean exactly that.</P> <P>So what means are appropriate?  Where is the line between protecting our Constitution and allowing it to become a suicide pact with terrorists?  There s a great national debate over these and other questions and we re here to do our part in that debate, and talk about the war on terror, the law, and how we fight.  </P> <P>So without further introduction, let me turn to our first distinguished panel.  We have with us Max Boot.  Max Boot is a senior fellow for national security studies at the Council on Foreign Relations.  He s also a weekly foreign affairs columnist for the LA Times, contributing editor to The Weekly Standard.  His most recent book, The Savage Wars of Peace: Small Wars and the Rise of American Power, was selected as one of the best books of 2002 by The Washington Post, The LA Times, and The Christian Science Monitor.  His next book, War Made New: Technology, Warfare and the Course of History, 1500 to Today, will be published in October 2006 by Gotham Books.</P> <P>David Gordon is an assistant deputy director for intelligence in the Office of the Director of National Intelligence and vice-chairman of the National Intelligence Council.  Previously he served as the director of the CIA s Office of Transnational Issues.  He joined the CIA in May 1998, when he was appointed the national intelligence officer for economics and global issues.  He has a diverse and illustrious history in government and academia before that.</P> <P>Our own Fred Kagan is a resident scholar in defense and security policy studies at the American Enterprise Institute.  His most recent book, Finding the Target, is an examination of American military transformation.  It will come out shortly in the next couple of months.  Prior to joining AEI he was an associate professor of military history at the U.S. Military Academy at West Point and the co-author of While America Sleeps: Self-Delusion, Military Weakness and the Threat to Peace Today.</P> <P>Finally, Dick Shultz is the director of the International Security Studies Program and associate professor of international politics at the Fletcher School of Law and Diplomacy at Tufts.  He s been the Olin Distinguished Professor of National Security Studies at the U.S. Military Academy, Secretary of the Navy, senior research fellow at the U.S. Naval War College, and a research fellow at the Hoover Institution.  Among his books are The Soviet Union and Revolutionary Warfare and The Secret War Against Hanoi, both of which sit on my shelf.</P> <P>Thank you all for being here.  </P> <P>Max Boot:  Thank you very much.  Thanks for having me.  It s a delight to be here with so many friends, if for no other reason than simply to set the conspiracy websites abuzzing by the fact that here you have a representative of the Council on Foreign Relations at the American Enterprise Institute.  So many conspiracies coming together, the head hurts here.</P> <P>Danielle Pletka:  David will transmit this to people s teeth shortly.</P> <P>Max Boot:  The topic of the Global War on Terrorism, five years after 9/11, is a daunting one.  The conventional wisdom which one hears so much and has heard so much in the past five years goes something like this.  President Bush did a decent job in the immediate days after 9/11 he rallied the nation, he toppled the Taliban, but then he lost his way.  He got caught up in democratization at gunpoint.  He should have left off these utopian endeavors and he should have concentrated on catching terrorists in cooperation with other countries.  This is kind of the classic critique one hears in the air here in Washington and New York and elsewhere.</P> <P>I guess my view is pretty nearly the opposite, not simply to be contrarian but actually because I think the opposite is more nearly the truth.  That in fact President Bush and the administration as a whole and the U.S. government have done a pretty good job on tracking down and finding terrorists and capturing or killing them where necessary.  In fact I think we ve done such a good job that in some ways we ve become overly focused on what you might call the Manhunter model of fighting this global insurgency we face, being waged by jihadists.  We re in fact neglecting some other important aspects of the task, which have to deal with drying up the swamp that breeds more terrorists and changing the conditions that give rise to the evildoers instead of going after simply the evildoers themselves.</P> <P>The first part of my analysis, that we ve been doing a pretty good job, is kind of self-evident from the fact that we haven t been hit since 9/11.  Who among us would have predicted on September 11, 2001, that we would go five years without another terrorist attack on American soil?  That s pretty extraordinary.  There are many reasons one can conclude why this occurred, from sheer luck on our part to incompetence on the part of al Qa ida.  You re seeing some of those analyses out there today.  But I think certainly the U.S. government and President Bush deserve some credit, in particular for some of the more aggressive and controversial antiterrorism steps that they ve taken from warrant-less wiretapping to aggressive interrogations.  All these things that they re being criticized for I think have contributed to the sense of security and perhaps false security that we enjoy today.  </P> <P>I think there s even been a very good level of international cooperation, which is the one thing that Bush always gets knocked for is he s this great unilateralist and doesn t work well with others.  But I think in fact in the counterterrorism, intelligence and law enforcement aspects there has been very good cooperation, even with the French and other countries that may disagree with us on a lot of issues but nevertheless agree it s a good idea to bust up terrorist plots before they strike.</P> <P>So I think we ve actually been doing a pretty good job on that score, but I think what President Bush realized after 9/11 is that it s not enough to get individual terrorists.  It s not enough to erect defenses against terrorism because they re never going to be perfect.  We re an open society.  We can always be hit at some point in the future.  We re never going to be 100 percent safe.  We have to change the conditions that give rise to the people who want to kill us.  </P> <P>This is obviously a much more daunting task and one where I think we ve been having less success and especially less success in the past year or so, after getting off to a fairly fast start with the toppling of the Taliban, the toppling of Saddam Hussein, at a stroke freeing something like 50 million people from tyranny which had a lot of positive repercussions throughout the greater Middle Eastern region, from Libya giving up their weapons of mass destruction to the Cedar Revolution in Lebanon, to Hosni Mubarak agreeing to make democratic reforms in Egypt.  You saw this palpable momentum for change, especially in the first term of the Bush Administration, where you saw progress towards transforming this dysfunctional status quo which had given rise to so much hatred and so many religious extremists.</P> <P>Unfortunately in the past year I think the engine of modernity in the Middle East has been going in reverse and you re seeing many of our hard-won gains slipping away.  You can see it in Afghanistan, where the Taliban are newly resurgent.  You can see it in Iraq, where the country despite having several democratic elections is nevertheless slipping into chaos and civil war.  You can see it in Lebanon, where despite the success in kicking out the Syrians, Hezbollah is in some ways more powerful than ever.  The long-term picture remains murky but nevertheless they are certainly able to hijack the Lebanese state in order to launch a war against Israel.  </P> <P>You re seeing it in Egypt, where Mubarak is really thumbing his nose at the Bush Administration and the president s calls for democratization in Egypt, by jailing Ayman Nour, his chief liberal critic, and by cracking down on dissent.  You re also seeing it obviously in Pakistan, where Pervez Musharraf, despite all of his promises to be an ally of the United States, nevertheless allows his soil to be used by the Taliban and al Qa ida and even looks the other way as Inter-Services Intelligence essentially provides support to the Taliban as they increase their insurgency which is killing more and more American, British and other troops in Afghanistan.  We see it in Iran, which is progressing on its merry way toward the acquisition of nuclear weapons.  And we see it in Syria, where Bashar Assad is becoming more bold and brazen in supporting Hamas and Hezbollah and also looking the other way as jihadists infiltrate Iraq from Syrian soil.</P> <P>So it s very hard to paint a positive picture where we are right now.  I would caution against excessive gloom, of which I am sometimes prey myself, because I think things looked perhaps much rosier a year ago when we saw the Lebanese people out on the streets and we saw the Iraqi people waving their fingers in the air to show that they had voted.  Things looked somewhat rosy then; things look pretty bleak now.  I think there s a tendency to move from excessive optimism to excessive despair, and I think both extremes ought to be avoided.  We ought to realize that this is a long fight and we re not going to transform this region overnight.  </P> <P>But nevertheless I think we shouldn t kid ourselves or pretend that things are going swimmingly well when they re not.  In particular I think there s much more President Bush could be doing in order to advance his freedom agenda.  Things like, for example well he s now belatedly, finally providing some money for democratization projects within Iran.  But it s in many ways too little, too late.  Regime change in Iran still is not official U.S. government policy.  In fact, if I knew what official U.S. government policy towards Iran was, I d be a much smarter person than I actually am.  I don t think we re doing nearly enough there to change the government which is causing us so many problems.  </P> <P>I don t think we re doing nearly enough in the case of Mubarak or Musharraf.  Both of these guys, and this to me is somewhat outrageous, they re both on the American payroll.  Mubarak gets $1.8 billion a year.  Musharraf has gotten about $4.5 billion since 2001.  They re basically acting against our interests in many ways.  They re helpful on some things but they re also extremely unhelpful on others, and I m not sure we re applying enough pressure.  Not just on the terrorism front but on the civil society front, we re not applying enough pressure to Musharraf to move toward civilian rule, to Mubarak to open up more to elections.  </P> <P>What we re basically doing is we re allowing ourselves to be pawns in this sucker s game where they say, hey, it s either us or the jihadists.  But unless we make moves to open up society that s going to be the choice and we re going to be stuck with this no-win choice.  I think we have to do more to change that.  </P> <P>There s certainly other targets of opportunity in the Middle East, areas where we could be doing more, and none more so than Syria.  If you look at the kind of quartet of evil which is trying to dominate the Middle East right now Iran, Syria, Hezbollah and Hamas what s the weak link?  I would say it s Syria.  They re the weakest power.  They re the one most susceptible to military, economic and political pressure from the United States, Israel and our other allies, and yet we re not doing it.  For several years now everybody in the U.S. government from the president to General Abizaid on down has been saying that the Syrian policy of cooperating with the jihadist terrorists in Iraq as well as with those in Lebanon and the Palestinian Authority is unacceptable.  </P> <P>But what are we doing about it?  I think by tacitly not doing anything about it, we are in fact accepting it.  There s no price to pay for the fact that Bashar Assad is essentially waging war on the United States and on Israel.  This is an issue not only for us but for the Israelis as well.  I think we re letting an awful lot go by and I think Israel has already paid a price for that in the missile war that it faced this summer.  I think it could easily pay a much greater price in the future.  We re paying a price for it in the troops that we re losing in Iraq.</P> <P>So I think there s much more that could be done there.  Of course the biggest thing that we could do is simply this may sound blindingly obvious but win the war in Iraq, which unfortunately I don t think we re doing right now.  I think it requires doing something different from what we re doing because we seem to be really sliding downward in Iraq.  It s very hard to see real signs of improvement.  In fact, just the reverse.  </P> <P>I m not sure that staying the course is going to do it.  I ve written that my idea is that we should either think about increasing troop numbers or decreasing troop numbers, with my preference being to increase them.  But if we re not going to do that we should maybe perhaps go to a smaller footprint strategy.  But we ve got to do something different because we re just not getting the job done.</P> <P>What concerns me is I see this kind of odd passivity on the part of the White House where they re kind of accepting the status quo, which is going south.  There s no way to deny the fact that we ve been losing, especially the past year or so, on multiple fronts.  Yet I don t see this kind of concerted activity on the part of the White House to get back on track.  That s worrisome to me right now.</P> <P>I don t want to end on too sour or too pessimistic a note here.  I think if you look at the long-term picture of the Global War on Terrorism, we will win.  There s no question in my mind, ultimately we will prevail.  There s no way that our enemies can win because they are very good at blowing things up but they cannot build up anything.  They cannot create a sustainable long-term alternative to liberal democracy.  We ve seen that in the places where they ve taken over, in places like Afghanistan and Iran, where the jihadist governments became very unpopular very quickly because they were not able to meet the basic needs of the people.  At the risk of sounding Fukuyamian here or at least the old version of Frank Fukuyama I will say that liberal democracy will prevail.  Just as it defeated fascism and communism, it will defeat Islamo-fascism.  But that s going to be a long-term victory and there s a huge question about how long it s going to take and how many people are going to die in the meantime.</P> <P>I would say the lesson of history is that vigorous American leadership can lessen the body count, shorten the war and hasten freedom s triumph.  I think we ve seen that aggressive and assertive American leadership in the early years of the Global War on Terrorism but I think it s been less present in the past year and I think we re paying a price for that.  I think the administration needs to step it up to reverse some of the losses we ve suffered recently.</P> <P>David Gordon:  Thanks, Danielle, it s a great pleasure to be back here again at AEI and for me to be on a panel with so many distinguished colleagues.  </P> <P>As a relatively senior officer in the organization created by the Congress in the most significant restructuring of intelligence since the creation of the CIA in 1947, I m sometimes asked, how will you know that you re being successful?  Success can t be measured by collection inputs into the intel system or even by analytic outputs from that system.  At the end of the day, it s not about budgets or IT or organizational restructuring or even about increased intelligence production.  It has to be about national security outcomes.  It has to be about protecting our country and keeping it safe.  How do we really know we re doing this right?  </P> <P>The bottom line is that success has to be about being more right on the things that count.  Today the thing that counts the most is the Global War on Terror.  There are many other important issues and we have to focus on them as well.  But the one that counts the most right now is terrorism.</P> <P>Let me start with where we are now in the war on terror.  I want to state quite clearly that U.S.-led counterterrorism efforts have very seriously damaged the leadership of al Qa ida and severely disrupted its ability to operate.  Over the past four and a half years, we and our friends and allies have denied al Qa ida safe haven in Afghanistan, killed or captured a very significant proportion of its leadership, disrupted its efforts to acquire weapons of mass destruction, reduced the amount of territory in Pakistan from which they can operate, shaken the networks that fund them and you ll be hearing much more about this at lunch from my colleague, Stuart Levey and forced them to devote inordinate effort and time to their own security.</P> <P>This didn t just happen.  Almost all of it depended upon intelligence, much of which was of almost exquisite quality.  To do this we built partnerships all around the world that are achieving results in preventing further attacks, as we witnessed most recently with the disruption of the London airliner plot, probably the most sophisticated plot that we faced since 9/11.  We now have intelligence community professionals as far forward as you can possibly imagine in direct support of U.S. combat operations.  We ve merged data streams from imagery, from communications intercepts, from the interrogation of detainees, into real-time actionable intelligence that has put missiles or special operation teams on targets.  These are significant achievements in and of themselves and constitute success in increased safety for our country and its citizens.</P> <P>These successes however do not yet constitute victory.  The president has been absolutely right in recent days in highlighting the enduring challenge that we face.  The global jihadist movement is evolving.  Today s dangers include not only al Qa ida but affiliated and independent Sunni terrorist groups as well as self-generating networks and cells.  Activists identifying themselves as jihadists and al Qa ida supporters although an extremely small percentage of the global Muslim population are increasing in number, in geographic dispersion and in their operational targets.  </P> <P>Tracking and countering this decentralized, more amorphous movement spawned by al Qa ida creates a tough challenge for us in intelligence, all the more so since we must continue to track other groups such as Hamas and Hezbollah.  Of course we ve kept a close eye on Hezbollah for nearly two decades, since the Beirut Marine Barracks bombings, but recent events have added to this importance.  Figuring out Hezbollah s connections with state sponsors, Iran and Syria in particular, is a crucial component in countering the group, which like al Qa ida has an extensive international network.</P> <P>Terrorists and would-be terrorists are adjusting their strategies and tactics to our counterterrorism efforts and successes.  In particular they re connecting with each other, conducting training, procuring weapons and doing operational planning over the internet.  Emerging internet-based technologies offer them unprecedented opportunities to transfer funds in ways that are extremely difficult for U.S. intelligence and law enforcement to stop and monitor.</P> <P>So what progress have we made in the intelligence community in our counterterrorism efforts since 9/11?  We re enabling the National Counterterrorism Center to step up to the role that the president and the Congress laid out for it.  Databases that were previously isolated in individual organizations are now co-located and shared at the NCTC.  There s now one database in the U.S. government with the names of all known and suspected terrorists around the world.  Admiral Reade and his staff hold videoconferences three times a day with analysts across intelligence, law enforcement, defense and homeland security communities.  NCTC disseminates terrorism analysis from all of these agencies to literally thousands of CT analysts in partner and allied countries all around the world. </P> <P>We re also improving how we do intelligence at lower levels in the federal government.  We re training FBI cadre to do intelligence analysis.  They re mapping areas of concern that haven t been covered before, what my friends in the Bureau call the spaces between the cases, that talks to a real shift in the culture of the Bureau.  We re doing all this with a full commitment to the continued protection of essential civil liberties. </P> <P>We ve established and expanded an open source center to track overseas expression in the media.  This center looks at open source material in the same way the rest of us in the intelligence community look at clandestinely collected intelligence.  We re using this material in unprecedented ways with our customers, from the president on down.  This bears fruit as we monitor jihadist websites and media used by our enemies to gauge trends in their thinking, their intentions and their networking.</P> <P>But I must emphasize that this progress has to be seen as part of a very long-term effort against a very dangerous target.  Countering the spread of radical jihadist movements will require coordinated and multilateral efforts that go well beyond operations to kill or capture terrorists.  The operational successes in the war on terror that I ve noticed were built on an intel community relatively well configured to support operations and to produce tactical counterterrorism intelligence.  </P> <P>But we re required now to do more, to expand strategic intelligence on mid- and long-range threats and especially on broader trends, to put these in the larger context of the political and social challenges that strain many societies as a result of globalization and alienation.  Identifying and explaining this kind of a problem is a challenge for intelligence.  It s one thing to map trend lines in Soviet missile production or even to estimate the depth of unrest in Eastern Europe.  We got quite good at that during the Cold War.  Now we must address and project subtle societal trends in cultures very different from our own and on topics that have more to do with the human psyche than with production rates, deployed military forces or resource availability.</P> <P>New jihadist networks and cells, sometimes united by little more than their anti-Western agendas, are increasingly likely to emerge.  The confluence of shared purpose but dispersed actors will make it harder to find and undermine these groups.  This means that threats to the homeland and threats to U.S. interests both here and abroad could become more diverse in the future.  The operational threat from self-radicalized cells will also grow in importance.  While the U.S. homeland will not be immune to such cells, the threat will be particularly acute abroad.  It s no surprise that the jihadists regard Europe as a particularly significant venue for attacking Western interests.  Extremist networks inside the extensive Muslim diasporas in Europe facilitate recruitment and staging for urban attacks, as we saw in the 2004 Madrid bombings, the 2005 London bombings, and in the recent London airliner plot.</P> <P>What s it going to take to get us ahead of this jihadist threat?  The loss of key leaders like bin Laden or Zawahiri, especially if they were lost in rapid succession, would cause jihadist movements potentially to fracture even more into smaller groups and would probably lead to increased strains and disagreements.  But the jihadists greatest vulnerability is more fundamental.  Their ultimate political solution an ultra-conservative shari a-based governance spanning the Muslim world is frankly unpopular with the vast majority of Muslims.  Exposing this religious and political straitjacket that is implied by the jihadist propaganda will divide them from the audiences they seek to persuade.</P> <P>Not unlike the Cold War, today s struggle is more than just an armed conflict.  We risk prolonging that conflict if we focus on just that aspect of it.  The terrorists are right about one thing: the current struggle is a war of ideas.  Recall what Zawahiri told Zarqawi last year, in the letter that we intercepted: More than half of this battle is taking place in the battlefield of the media.   We re in a media battle in a race for the hearts and minds of our umma.   This is not a war that will be won by strength of arms alone.  </P> <P>Also like the Cold War, the war on terror requires that we cooperate with many other countries around the world.  Ambassador Negroponte is continuing the efforts of DCI s Tenet and Goss in aggressively promoting expanded relationships with foreign intelligence services to help detect and prevent attacks against ourselves and our friends and allies.  </P> <P>This struggle against terrorism will be a long struggle but it s one that we can and will win.  We and like-minded peoples have the power to do so.  Intelligence will be critical to this.  With a bolstered intelligence community enabled to track the movement not only of terrorists but their ideas, their money and their communications, we will be poised to wage the next stage of the fight against terrorism.  Thank you very much.</P> <P>Fred Kagan:  Good morning.  This is a very important topic.  Lots of people have been talking about 9/11 five years hence.  We hope to contribute to this discussion.  I d like to start by asking you all to feel sorry for me for a minute.  It s hard to be a conservative in America, especially in national security areas.  Not for the reasons that you think, but because America is fascinated with novelty.  We re always looking for the new, new thing.  There are lots of other societies where if you come in with a proposal to say we ought to look about the world in a completely new way, they say, no, we re not going to do that.  But in America you say, I think we ought to think about traditional problems a little bit, most of the time the answer is, no, we re in a new era, everything s different.  </P> <P>We ve been telling ourselves since 9/11 that the world changed fundamentally.  That all of our old preconceptions were wrong.  That we needed to think about entirely new ways of approaching an entirely new problem that had no precedent in history.  That we needed to reorganize our government completely in some unknown way, based on no historical precedence, in order to deal with this problem with no historical precedence, and so on.  </P> <P>A lot of new buzzwords have been sweeping the American national security establishment.  This is fourth generation warfare.   We re fighting a networked foe.   This is asymmetrical warfare.   That s actually not new, we ve been talking about asymmetrical warfare for a long time, but it seemed new when people who had never heard it before started to hear it and talk about it. </P> <P>I bring this all up to say I think it s time to step back as we re five years out from September 11 and ask, just how new are the problems that we actually face?  Just how well are we doing at those that are relatively newer and those that are relatively older?</P> <P>We face one very unusual foe.  Al Qa ida is an international movement.  It is a networked movement, it is not now territorially based because Bush de-housed it it had been territorially based in Afghanistan until he did that, with outliers.  It s very clearly trying to get to be territorially based yet again, begging the question just how unprecedented exactly is it.  But it s certainly a different sort of foe from the ones that we ve been preparing for.</P> <P>The funny thing is, for all of our discussions about how we were going to have to transform completely in order to face this new foe and what terrible threats that it posed to us because it was new, that s the foe that we ve done the best against.  I fully agree with Max that if you look around the areas of American national security since 9/11, the place where we ve done best has been fighting the foe that we said would be hardest.  The foe that we said would require the most change, we have prosecuted with a certain amount of change but the truth is very much with the sorts of forces and governmental structures that were in being before September 11.  We ve done actually fairly well.</P> <P>I always hate saying things like that because I feel like they sort of call for an attack tomorrow to prove me wrong.  But the fact of the matter is it is remarkable that we have not been hit again since September 11, despite the fact that we know that they have tried on a number of occasions.  We have intercepted and disrupted a number of attacks at various stages of preparation.  That s a pretty successful record.  You really can t ask for much better than no hits in five years.</P> <P>But if you step back from that for a minute and say, what are the other sorts of challenges that we re facing in the world because al Qa ida after all, for all of the danger that it poses, and I would not in any way want to minimize that, is still only one of many problems that we face.  My biggest critique of the Bush Administration s national security strategy actually is that they have tried to put all of American national security under the rubric of Global War on Terror, which is a new new thing, and argue that we need entirely new approaches to fight this new new thing, without recognizing that actually there are other reasons to be concerned about states like North Korea and Iran.  Solutions to those problems may not be new and may not be without historical precedent. </P> <P>Let s look at the top six areas of the world today that are commanding our attention one way or another.  Al Qa ida.  I ll grant you that s an unusual foe, although again I think less unprecedented than people think.  Afghanistan.  Afghanistan at this point is a fairly traditional counterinsurgency campaign.  Iraq.  Iraq is now a fairly conventional counterinsurgency campaign, shading over possibly into civil war although I don t think it s there yet.  But again, civil war, that s another area that we have long familiarity with, including one of our own. </P> <P>North Korea is a problem of nuclear nonproliferation.  We ve been trying to deal with the problem of nuclear nonproliferation for decades.  We ve been dealing specifically with North Korean nuclear proliferation since the 1980s and very actively since the 1990s.  Not very new.</P> <P>Iran.  Again, this is partly a problem of nuclear proliferation, something that is therefore very familiar, and it is partly a problem of state sponsorship of terrorism.  Ronald Reagan spent the 1980s using a very blunt military instrument to attack state sponsorship of terrorism, with pretty remarkable success.  Not really that new a problem.  Not clear that the old approaches won t work.</P> <P>Lastly an area that is very frequently overlooked and I fear may be overlooked very much to our detriment: Somalia.  That s a little bit more complicated a problem.  Of course Somalia is not entirely unfamiliar to us, much though most of the national security establishment would like never to think about it again.  But you re dealing there with an actual civil war.  You re dealing there with in some respects a counterinsurgency.  You re dealing there with the problem of peacemaking and then subsequently peacekeeping, humanitarian relief and so on.  None of these are particularly new challenges.  We know how to do a lot of this stuff.</P> <P>The argument I m going to make therefore is that the Bush Administration has become fixated in many respects on the newest part and the hardest part so they thought of the challenges that face us, to the detriment of a much larger bloc of much more traditional challenges.  This has a wide variety of consequences that I m not going to go into in tremendous detail, but it has to do among other things with the way that we value and prioritize national security resources and the way that we look at the world in terms of national security threats.</P> <P>North Korea is a problem in the Global War on Terror but only peripherally.  I m worried about the North Koreans selling nuclear weapons to al Qa ida or some other terrorist organization.  I m also in many respects much more worried about the fact that the obvious and patent North Korean possession of nuclear weapons seems to be driving the Japanese much more in the direction of feeling that they need both to rearm and to have nuclear weapons of their own.  I m not necessarily opposed to that but I wonder what the regional consequences of that are going to be.  I fear very much the possibility of a Northeast Asian arms race, including a nuclear arms race, resulting from the fact that we have allowed the North Korean situation to tick along so long, and that we are doing really very little about it because after all it s not really central to the Global War on Terror.</P> <P>I m very worried about the way that we re dealing with Iran, where we see a tremendous amount of complexity in a situation which is, granted, complex in some respects but fairly simple in others.  Once again we have a state which is overtly in violation of international law and international norms, that is failing to abide by a number of international agreements, and that is clearly on the road to developing nuclear weapons.  Unusually, its leaders have stated that they will use the nuclear weapons as soon as they have them.  That s actually a new thing.  I can t think of another state that has been developing a nuclear program since people have been developing nuclear programs that stated in advance that it would use the weapon as soon as it had it.  </P> <P>The Soviets never said that, the Chinese never said that.  Neither did the Indians nor the Pakistanis, neither did the Israelis.  When the South Africans were working on a program they didn t say that either.  That s an unusual thing.  Can we deal with it with traditional methods?  I don t know.  Certainly the methods that we re using don t seem to be working very well.  I think it would behoove us to think about more traditional responses to Iran and to stop convincing ourselves that everything has to be seen through the prism of fourth generational warfare, asymmetric warfare and a host of other wonderful acronyms that all really add up to nothing that we ve ever done in the past is relevant to today.   I m just not sold on that premise.</P> <P>The truth of the matter is we can be with the young Fukuyama in the sense of agreeing that liberal democracy will ultimately win, and I m convinced that it will as well.  But history didn t really end and it hasn t really ended.  That means a lot of things.  It means that conflict continues, and that s obvious.  But it also means that a lot of fairly traditional realpolitik ways of understanding the world and going about solving international problems remain valuable.  It means that a lot of fairly traditional state implements of power, including conventional military force, remain extremely important.  </P> <P>If you take a look at what the Bush Administration has done most prominently to be most successful against al Qa ida, the single most important thing that it did was a very straightforward takedown operation of a weak government in Afghanistan, using fairly conventional forces in a fairly conventional military operation.  I know that the common received wisdom is that that was an amazingly transformative and unusual and unique military operation.  I m happy in question time to explain to anyone who s curious why I don t think that s true.</P> <P>That stunned al Qa ida, put them on the defensive.  We have been chasing them around ever since, maintaining the initiative against them, and that has been tremendously successful.  I think a lesson that we should draw from that is that we should not too readily discard the utility of our traditional levers of power, which after all are the areas in which we are strongest and have the greatest lead internationally in fighting this supposedly new conflict.  Thank you.</P> <P>Richard Shultz:  I m going to focus on how we should understand al Qa ida, the enemy, since 9/11.  The term that s now used in the national military strategy for fighting terrorism and some of the combatant commanders posture statements is al Qa ida and associated movements.   I think using the term movement is important because if you look at al Qa ida as a movement what you see is that it has a narrative which really extends over quite a long period of time.  Through this narrative one can see that they ve developed a doctrine and capabilities that I would propose in the 1990s sought to establish the ability to conduct what I would call a long jihad, a term actually that sometimes you can find on their own websites.</P> <P>We can t go through this whole narrative so I thought I would concentrate for a few minutes on the latter stages of that development, which would be the period of the latter 1990s in Afghanistan, and the doctrine and capabilities they sought to develop.  How losing that sanctuary hurt them a great deal.  Then propose four ways that they ve sought to strategically adapt in the face of U.S. action which was very successful in taking that away.  The extent to which these adaptations are effective or not, I won t comment on, but simply to try to lay out how to think about this enemy.</P> <P>By the mid-1990s, al Qa ida had developed a more complex targeting doctrine.  That doctrine focused, as many in here know, on both what they called near enemies and these near enemies are principally Muslim regimes that are apostate regimes, meaning that they don t follow the very austere version of Islam that al Qa ida does, this Salafist version of Islam.  So that was part of the doctrine, but then in the mid-1990s they also proposed that their targeting should concentrate on the United States, which they called the far enemy.   Through the latter half of the 1990s then, what they had to do was establish organization and capabilities to employ an array of instruments and they do employ an array of political, psychological, unconventional warfare, paramilitary techniques, to fight this long jihad.  That s really what Afghanistan was all about in the latter half of the 1990s.</P> <P>We know that many thousands of jihadis, Salafists, went to Afghanistan to receive training and be indoctrinated into this new approach.  In many ways this was what I would call the second generation of international holy warriors.  They re actually now in their third generation, which I ll come to in a moment.</P> <P>Doctrine was revised at this time to emphasize a war-fighting mission that targeted a number of different enemies.  Beyond doctrine, al Qa ida s organization grew in size and complexity, allowing it to plan and execute terrorist attacks against U.S. targets across the globe while also encouraging and as much as possible helping national-level affiliates who were fighting these near enemies at home.  Some of the other panel members talked about this fight today as a global insurgency.  I subscribe to that argument.</P> <P>So in Afghanistan, al Qa ida in a way becomes a vanguard for this global jihad.  Through a network of linkages it establishes with a score of national-level Islamist jihad groups, it begins to conduct this global fight.  There were several enablers that allowed them to do this but I think the most important enabler was the Afghan sanctuary.  But others are important too modern communications and technology and globalization and so on helped this doctrine by September 10, 2001, reach the stage of an incipient global insurgency.</P> <P>The Bush Administration took away that sanctuary.  So al Qa ida and its associated movements, like any organization at war, had to figure out how should they adapt, how are they going to try to recover sanctuary.  How are they going to be able to continue this fight now that they have lost such an important enabler.</P> <P>Over the last five years we ve had this discussion which I think is nicely summarized in a very short paragraph in this week s Economist.  The Economist has a piece on al Qa ida and it says that, We ve been asking ourselves the question: what is it?  Is it a cohesive organization and movement or is it simply a source of inspiration for other radicals?  If you look back on some of the U.S. government documents in 2002, 2003, 2004, it tended to say al Qa ida was really the latter it was really an inspirational organization, not a war-fighting organization and certainly not an organization like it had existed before.  Now the Economist says it s both and I tend to agree with that.</P> <P>So what are the strategic adjustments?  I ll mention each of those briefly.</P> <P>First, it seems to me that what they have tried to do in part is create a virtual sanctuary.  When we looked at this argument that they were inspirational, it only touches on the first aspect of how they ve tried to build up a virtual sanctuary, and that is propagating their ideology.  They do that.  All these different jihadi websites that are either al Qa ida or Al Qa ida in Iraq or Al Qa ida in Afghanistan, et cetera.  They all do promote this ideology of this Salafist ideology that tries to empower the umma, the Muslim community.</P> <P>But it does a number of other things as well, and I can t go into detail on this.  But beyond propagating the ideology it does try to mobilize elements of that umma to action.  It does it in interesting ways to inspire people to fight.  It conducts psychological warfare to demoralize its enemies.  Take a look at Al Qa ida Between the Two Rivers, as it s called, the things that they put on their website to demoralize anyone who might want to support the U.S. effort in Iraq, to include Iraqis.  It has developed very interesting networking methodologies to help those who might want to fight join virtual cells.  We re actually seeing some of these virtual cells are taking action the Canadian example last year and others.  And they are putting on their websites ways of offsetting what the national intelligence community is trying to do to disrupt that, and that s really interesting to look at the methodologies that they use to keep you, David, away from them.</P> <P>This virtual sanctuary also does what I would call two types of information sharing.  It provides manuals and handbooks for operational purposes.  Take a look at the discussion on IEDs.  It s really very sophisticated.  They re studying what we do, they re putting on their websites what we re doing, how to counter it.  Fantastic.  An IED is the principal weapon used against us in Iraq and increasingly in Afghanistan.  So operational manuals and handbooks.</P> <P>They also now are putting on their websites training videos and courses.  It s almost as if now there s a global program in the art of terrorism.  I teach in a global master of arts program and I hate to say it but there s some interesting parallels here.</P> <P>Finally, collection targeting.  This is one way they ve tried to strategically adapt.  How effective is it, I don t know.  Will it serve at least in part to fill the void of what was lost in Afghanistan?  We need to determine that.  But this I think is happening.  That s a very interesting strategic adaptation.</P> <P>A second is the use of ungoverned space.  We re starting in the last couple years in the CINCs posture statements and our own strategy for fighting, we re talking about this ungoverned space.  Very interesting, there s a lot of it.  The most important ungoverned space that receives a great deal of attention now is that area between Afghanistan and Pakistan.  We know that al Qa ida ran there after they lost their base in Afghanistan, out of necessity, to survive.  But should we understand them in that space today simply as an organization on the run, or should we understand them in there as an organization that in there also they re trying to reestablish some elements of the sanctuary that they had before?  We know that jihadis now are traveling there.  They re going in there for maybe some of the same purposes they did in the 1990s.  </P> <P>So ungoverned space is another strategic adaptation, and it s not the only place.  There are other places where members of the al Qa ida associated movement are using ungoverned space, including the Sahara region in North Africa, which is a growing concern both for CENTCOM and EUCOM, as you can see in their posture statements.</P> <P>Third strategic adaptation was really opportunity: Iraq.  Iraq gave this movement the opportunity to fight the far enemy up close.  In Iraq we see that al Qa ida and members of it now see this as the central front in their fight.  Of course they hope to carry out a strategic defeat of the United States there.  They look at the fight in Iraq much like the first generation jihadis looked at the fight in Afghanistan and they re putting an effort into that in bringing jihadis there.  The highway runs through Syria among other places, which Max was talking about earlier.</P> <P>This is the creation of the third generation of global jihadis, what we might now call the Iraqi Arabs.  We had the Afghan Arabs in the 1980s, now we have the Iraqi Arabs.  There is some evidence that some of these individuals that are going there to fight are already going back to their homes to fight at the national level.  In fact there is evidence, the Jordanians tell us, that Zarqawi brought some to Iraq especially for that purpose come here, get training, go back and fight at the national level, fight globally.</P> <P>Then of course the fourth strategic adaptation was really maintaining these national-level fights which are taking place in a variety of parts of the world, and to inter-connect all of this together.</P> <P>So at least in my analysis, that is how al Qa ida and the associated movements have sought to strategically adapt to what happened to them in the late fall of 2001, early spring of 2002.  How effective are these efforts?  What would a net assessment of these efforts look like?  How would you counter them?  These are the sorts of strategic questions that have to be part of the way we think about this long war, as we call it, or long jihad, as they call it.  I ll stop with that.</P> <P>Danielle Pletka:  Thank you very much to all of you.  I m going to open the floor to questions now.  I don t normally, as those of you who know us know, let our speakers go over time but these were really such interesting presentations that I did.  I hope that everybody will indulge that we have a slightly shorter time for questions and answers.  If people would be kind enough to raise their hands, identify themselves and ask a question please, don t make a statement.</P> <P>Question:  Stanley Kober [phonetic] with the Cato Institute.  Let me ask a specific question.  Waziristan, the recent agreement between Musharraf and the Taliban.  The Pakistani army pulls out of Waziristan in return for a promise the Taliban won t take advantage of it.  Panelists take that seriously?  If you don t take that seriously, what are the implications?  Does that not mean that al Qa ida has a base in Pakistan that is relatively secure?  What do we do about that?  Does that not mean there will be further infiltration into Afghanistan?  What do we do about that?</P> <P>David Gordon:  This is a situation that we are and will have to continue to closely monitor.  My sense is that this is probably going to be an unstable truce there.  But we are closely monitoring and will share information with the Pakistani authorities on any infiltration or reestablishment of al Qa ida facilities in the Waziristan region.  The Pakistani government, as you know, in the last few days has not spoken with one voice on this.  There are, as several people have mentioned, different tendencies within that government and we have long worked to try to wade through those roiled waters and will continue to do so.  But this is something that will demand very close attention.</P> <P>Max Boot:  Can I jump in with an answer?  I was just in Afghanistan a few months ago meeting with NATO forces.  I think the picture they paint is a very alarming one because they do in fact face a growing, resurgent insurgency from the Taliban in the southern and eastern provinces of Afghanistan.  A lot of the reasons why it s growing and resurgent is because it has secure base areas in Pakistan.  This is one of the traditional prerequisites for a successful insurgency, which is to have successful rear areas, whether inside the country or outside the country.  </P> <P>We ve done a decent job, U.S. forces and NATO forces, denying them sanctuary within Afghanistan but they re operating from safe havens within Pakistan.  This has been going on for several years now despite the promises of Musharraf to cut them off.  Clearly I think what Musharraf is doing is playing a double game where he delivers certain al Qa ida bigwigs to us, he plays along with us to a certain extent but at the same time he covers his bets and he still wants the Taliban to be an agent of Pakistani influence within Afghanistan, just as he wants the jihadists to be an agent of Pakistani influence in taking back Kashmir.</P> <P>So I think this is a very dangerous game he s playing which is directly responsible for the upsurge in violence that we re seeing in Afghanistan and the increasing deaths of British, Canadian, American and other troops there.  The big question is, what on earth do you do about it?  I think Pakistan is one of the most problematic areas in the war on terrorism, in some ways similar to Saudi Arabia, which is that these are both countries that are both friends and enemies.  You can t classify them clearly in your mind like you can say: Iran, bad guy; Jordan, good guy.  That s a reasonably clear distinction one can make.  But Saudi Arabia and Pakistan both cooperate with us on some things and also cooperate with the jihadists.  It s especially a problem now with Pakistan.</P> <P>I think obviously we have to be careful here.  We don t want to precipitously push Musharraf out the door if the choice is going to be having a jihadist regime in Islamabad.  But I think there are big forces of reasonably secular civil society in Pakistan.  You have two major opposition parties which are not religious, which are pressing for a return to civilian rule and elections.  This is something that Musharraf has promised but he has not delivered.  He has refused to hang up his uniform.  He is turning a blind eye to the activities of ISI.  Remember, this is military intelligence here.  General Musharraf is not only the president but the head of the military, so it s terribly credible for him to say that he doesn t know anything about what his own intelligence agency is doing in fomenting the Taliban and turning a blind eye to the activities of al Qa ida.</P> <P>So I think this is one of the areas that I highlighted in my opening remarks, which is we need to be more assertive.  We need to use the levers that we have.  We have a lot of leverage over Musharraf.  In some ways we are almost literally helping to keep him alive, because he s weathered several assassination attempts with American help.  We are providing a lifeline to his regime and I think we can expect more delivery on the promises that he has made about fighting terrorism and also importantly about human rights and returning to civilian rule, which I think are important long-term prerequisites for making sure that Pakistan does not become a jihadist state.</P> <P>Danielle Pletka:  It certainly highlights what Fred said about how a lot of these are old fights.  This is what happened in the 1980s when the Pakistanis were helping the bad guys during the fight in Afghanistan through the mujahidin.  It happened throughout the 1990s when they were backing the Taliban.  We ve been there, seen that, and remarkably we seem to be able to make the same mistakes every single decade.</P> <P>Question:  Jesse Norman, Policy Exchange, London.  First thing to say is that I think you can expect a future Conservative administration in Britain to be absolutely as foursquare behind the United States as Tony Blair has been.  So have no doubt about David Cameron or anyone in Britain on that front.</P> <P>The second thing is just to focus on Iran, where there does seem to have been a restatement of strength by the president in recent speeches and a willingness to do something about the very serious danger of nuclear proliferation.  I just wonder if we could be a little bit more precise about what that would imply.  To somebody who knows very little about this area it seems to imply at the very least some form of bombing, either by this country or by Israel.  There s a congressional timetable to be looked at.  I just wonder if you could give us some sense as to how you do, perhaps even within the framework of conventional responses to this kind of problem, address that specific concern.</P> <P>Max Boot:  I don t mean to answer every question, but I think your question seemed to suggest that there is some renewed toughness on the part of the Bush Administration toward Iran.  A restatement of toughness?  Well, to the extent that there s toughness, I would say it s pretty largely rhetorical.  I think there are a few things that are being done to try to put a little bit of pressure on them, pushing through sanctions.  But if we re depending upon negotiations with the Europeans or sanctions at the UN to end Iran s nuclear program then to me that basically suggests we ve accepted Iran as a nuclear power, which I think is pretty well where we re headed.  </P> <P>There is a view among some people that first off, it s very hard to find anybody, certainly probably in this room, who thinks that the negotiations and diplomacy is really going to get anywhere.  But I think there is a view among certain people that we know it s not going to get anywhere but this was a prelude.  Bush is not going to leave office with Iran going nuclear.  He s going to deal with the mullahs before he leaves office.  He s going to hit them militarily if necessary.</P> <P>I would actually tend to be skeptical of that.  First I would be skeptical of whether a limited military action would actually achieve the ends that we want.  Second I m skeptical that President Bush is actually planning any such thing.  If he is, it s a very well-kept secret.  Major military action of this sort cannot be a well-kept secret.  You have to mobilize a lot of things, you have to move resources into place, you have to mobilize public opinion, allies, all the rest of it.  The fact that we were going to invade Iraq was not a secret to anybody except Saddam Hussein.  The whole rest of the world knew this years in advance.  We knew it was going to happen.  I don t think anyone can say the same thing about Iran.</P> <P>So I don t think we re gearing up.  I don t think there s much evidence we re gearing up for a serious military response.  I don t think the negotiations that are dragging on are going to get anywhere.  The part that s most mysterious to me is we re getting into this terrible situation where we have no choice but either to accept the Iranian nuclear program or to hit it militarily, which has a host of problems.  If there s anything we could have done to avoid it, it would have been to try to promote regime change in Tehran.  </P> <P>To me one of the most mysterious failings of the Bush Administration is their failure to act on President Bush s stated intent to end tyranny, to promote democracy.  You can certainly say in the case of Pakistan or Saudi Arabia or Egypt that we have to be careful because we have semi-friendly regimes, we don t want to push them over the brink.  That s not a worry in Iran.  It s impossible for a successor regime to be worse in Iran than the current one.  It s guaranteed to be better no matter what kind of regime it is, and yet we ve done almost nothing to achieve that.  That to me is a huge problem and a huge mystery, why we haven t done more.</P> <P>Richard Shultz:  The only comment I would make on this is it seems to me that Iran is the country that s demonstrating toughness recently.  I would look at their connection with Hezbollah and this most recent war.  Now we see how they armed Hezbollah and how they supported they re the ones that are not just using words but actions in the region.  So to me that s pretty worrisome, in addition of course to the whole nuclear question.</P> <P>Question:  Jeff Brino [phonetic] from the Department of Justice.  I wanted to direct my question primarily to David and Dick and try to bridge some of your comments and writings.  I m going to start with the assumption that we in the United States have a situation very similar to what existed in Great Britain, which is a bunch of probably homegrown radicals who are preparing themselves to do us violence.  There was a phrase you used, David, about how the FBI is trying to reorient their mission to capture the spaces between the cases.  It s similar to what Dick has written about in The Weekly Standard piece, where based on your work in Ireland and Iraq and Israel there s this notion that you have advocated of intelligence dominance, which is to say you have people on the ground who are in charge of keeping peace, who are also collecting intelligence, and they re bringing intelligence back to analysts who are constantly monitoring that.</P> <P>My question is a very practical one from the U.S. law enforcement standpoint, and that is if we re going to go after the so-called spaces between the cases and we re talking about a domestic terrorism threat, or at least a threat that is based in the United States where we don t have the entire U.S. intelligence community able to focus on it, does the notion of cops and federal agents capturing information that is not necessary for their immediate mandate of protecting people and redressing crime, is that consistent with what you have observed about the expectations of our own people about what their police apparatus should be?</P> <P>Richard Shultz:  I ll talk about it in terms of what we learned.  It s Roy Godson and myself who did this.  What we saw was in the case of Northern Ireland and some other British experiences and also in Israel, that they created a local intelligence capability that very much had both the police intelligence approach and a kind of classic, local hum-int approach.  What the British have done in the last few years in Britain is adapt that approach to dealing with al Qa ida elements there.  They re able to do that in a way that I think here would be pretty difficult.  </P> <P>First of all from a civil liberties point of view, there would be a huge upcry if some local intelligence organizations that were police and FBI were built to focus on Muslim communities.  But that s essentially what the British are doing and how they re getting inside this network.  But that s a recent thing.  But I think here that adaptation of intelligence dominance, which to me is a very effective thing, and Roy and my argument is we need to use it in Iraq we can t get anywhere in trying to get this idea to have legs in Iraq.  An adaptation of it here may be necessary but would be politically really supercharged.</P> <P>David Gordon:  Just a couple comments on this.  I would not want to equate the social situation in the United States with the social situation in Europe.  That s not to say that we are not vulnerable to self-initiated groups and homegrown groups.  We are, and it doesn t take all that many people to do that.  But the social milieu here versus Europe is really extraordinarily different.  We don t have any equivalent in the United States of these large ghettoes of Muslims, very high unemployment rates, no sense of being part of the national community.  There simply is no parallel to that.  </P> <P>That said, law enforcement and the FBI are monitoring radical mosques, and there are some radical mosques here in the United States.  They re monitoring movements in prisons, radical extremist Muslim movements in prisons.  So we are active in that front but I don t think there are parallels to Europe or really to Northern Ireland.  I really would not want to suggest for a moment that we re in anything like that situation.</P> <P>Richard Shultz:  I m not suggesting that either.  I m just saying that if you look at how this approach to local intelligence developed, it developed out of this Northern Ireland and Israeli and a few other contexts.  What Roy and I tried to do is identify what s this approach, how would you implement it.  I happen to think it has a very important role to play not just in places like Iraq, but I think we need to built it within our foreign internal defense doctrine as well as our counterinsurgency doctrine, for helping our friends who are fighting these national-level jihadist movements. </P> <P>However, the one thing, David, that is so interesting today is I agree with you 100 percent on the milieu.  But what this internet capability that the jihadis have developed does is it allows that handful who in the past we would say they lived in anomie, they lived in isolation they don t anymore.  They can get that inspiration.</P> <P>David Gordon:  That s why I started by saying we are not immune to this by any stretch of the imagination, but we don t have a social milieu that is feeding it and giving it oxygen.</P> <P>Richard Shultz:  Yeah, I agree.</P> <P>Danielle Pletka:  Presumably we re also a little bit more sensitive to the question of these kinds of mosques and operations in the United States than we were throughout the 1990s, when the FBI refused to do anything whatsoever about them.  So that s a good thing.  This is our last question and I apologize to everybody but we do have another session to start.</P> <P>Question:  John Wolstadter [phonetic], senior fellow, Discovery Institute.  Given Iran s supplying IEDs, very sophisticated ones, to insurgent groups in Iraq; given the backing for the war started by Moqtada al-Sadr since the death of Zarqawi coming from Iran, can we possibly prevail in Iraq without regime change in Iran?</P> <P>Fred Kagan:  Sure.  My succinct answer is yes, sure, absolutely.  Yes, I think we can.  The Shi ite movements in Iraq are clearly supported by Iran.  They are far less clearly controlled by Iran.  There is not a single monolithic Shi ite movement in Iraq to begin with.  There are rival movements.  Iran tends to support all of them.  They do not take their orders from Iran in the same way that Hezbollah seems to.  Moqtada al-Sadr, among other things, is now for good or ill part of the Iraqi political process and he has other things to worry about than what exactly Tehran tells him.  It s a little different from the way Hezbollah is involved in or one might almost say dominates the political process in Lebanon.</P> <P>So I think the support that the Iranians give to Iraqi Shi a rebels is important, it s harmful, it s something that we should work to stop.  But I think it is by no means clear that we cannot succeed in Iraq if we don t have regime change in Iran.  I don t think that s true at all.</P> <P>Max Boot:  I concur completely with Fred s comments.</P> <P>Danielle Pletka:  On that happy and harmonious note, let me thank our panelists for a really excellent, lively, thoughtful presentations and our questioners as well.</P> <P>[End of Panel I]</P> <P> </P> <P>Special Session: AEI Studies on Public Opinion:</P> <P> </P> <P>America and the War on Terrorism</P> <P> </P> <P>Danielle Pletka:  No discussion of post-9/11 is appropriate without discussing public opinion.  It has become an integral portion of everything, of every story and every political debate.  So today we asked for a brief intercession between our longer panels with our own Karlyn Bowman to talk a little bit about some of these issues.</P> <P>Karlyn is a resident fellow at AEI and has been the managing editor of Public Opinion, editor of The American Enterprise, and founder of AEI s Public Opinion Studies.  But her bio really doesn t tell you enough.  In an era in which polls have become the bellwether of political action and pollsters have taken to asking everything of everyone, it s hard to make sense of how all of these public opinion studies should be read and how we should understand what it is that people think.  When I want to know what to think about what people think, I ask Karlyn Bowman and now you have that opportunity.  Thank you very much, Karlyn.</P> <P>Karlyn Bowman:  Thank you, Dani.  Dani, you began your remarks this morning by saying that most of us remember exactly where we were on 9/11.  In fact one of the pollsters asked that question last week.  The Pew Research Center reported that 95 percent of Americans remember exactly where they were and what they were doing when they heard the news about 9/11.  You don t see a number like that very often in public opinion.</P> <P>As Dani said, I work on a number of public opinion studies here at AEI.  We don t conduct any public opinion polls, we simply bring together the ones in the public domain and try to make some sense of them.  </P> <P>I want to reiterate one other thing that Dani said in her introduction.  We don t believe that public opinion polls should ever be used to make policy.  They are too blunt an instrument for that purpose; they are too crude.  But we do believe that public opinion polls, properly understood, can tell you a great deal about a complex and heterogeneous public.  That s what I d like to talk about today.</P> <P>I m going to touch on four areas related to 9/11.  First, concerns about another terrorist attack.  Second, views of the Bush Administration and the Administration s performance.  Third, attitudes about civil liberties and security.  Fourth, how people think the war is going.</P> <P>Although Americans were very resilient after the 9/11 attacks, many survey questions today suggest that the events have had a profound and deep impact on the American psyche.  What I m calling a 9/11 hangover is contributing to the deep pessimism that we see in many areas of public opinion today.  Why the pessimism?  I think it s pretty simple and straightforward.  Americans expect another terrorist attack and they think the world is more dangerous than it has ever been before. </P> <P>Responses to many survey questions about 9/11 have changed dramatically since that fateful day, but responses have not changed very much on the likelihood of another terrorist attack.  In Pew s October 2001 poll, 73 percent said there would be another attack on U.S. soil.  In August this year, 67 percent gave that response.  Hardly any change.  Seventy-six percent told Gallup in July that the world was more dangerous than at any other time in their lifetimes.  There was a gender chasm on this question, as there are on so many public opinion questions on the war on terror, with far more women than men describing the world as unusually dangerous.  Eighty-one percent told CBS News that we will always have to live with the threat of terrorism.</P> <P>Only 12 percent of Americans said that it was very likely that they would see a 9/11 movie.  Even frequent moviegoers are not especially interested.  Emotions are still too raw.</P> <P>When asked why there hasn t been another terrorist attack, people in Pew s new poll were divided.  Forty percent said that we d been lucky; 39 percent said that the government is doing a good job protecting the country.  In a LA Times poll, with a slightly different question, a strong plurality 49 percent said that the terrorists are just biding their time.  Another 24 percent said it was because the government and the intelligence agencies here had made it more difficult for terrorists to operate in the United States.</P> <P>Quickly turning to views about the president s handling of the war on terror, in virtually every poll Bush has lost ground on handling terrorism since 2001.  In Gallup s polling his approval rating on this issue has dropped 30 percentage points, from 86 percent in October 2001 to 55 percent today.  In virtually every poll, however, he still has majority support on handling the issue.</P> <P>It s the findings from the immediate post-9/11 period that are the aberrant findings in public opinion.  Those numbers are the kind that we had never seen before in survey research except after Pearl Harbor.</P> <P>In the latest IPSOS poll, 59 percent approved of the way that George Bush was handling the war on terror.  In the same poll, just to give you a point of comparison, only 31 percent approved of his handling of Hurricane Katrina.</P> <P>In almost every poll that asks the question directly, majorities say that the Bush Administration has made the country safer.  Fifty-one percent gave this response in the new CBS poll; 29 percent said the administration s policies have made us less safe.</P> <P>President Bush and the Republicans have lost the strong edge they had on terror but in most polls the Republicans still lead the Democrats on this key issue.  In the new Pew survey, 57 percent said they were concerned that if the Democrats took control of Congress this fall, they would weaken the country s efforts to combat terror.</P> <P>Turning to civil liberties, security and safety are now important public criteria guiding national policy.  In the real world concerns about safety and security trump concern about privacy and civil liberties every time.  At the theoretical level there is greater concern about civil liberties.  Concern about civil liberties has increased but in no poll does it reach a majority.  In the Pew poll released this week, 55 percent said that they were more concerned that the government s anti-terrorism policies had not gone far enough to protect the country; a quarter said they had gone too far in restricting the average American s civil liberties.  </P> <P>In the new CBS News/New York Times poll, a quarter said the administration had gone too far in limiting civil liberties; 19 percent, not far enough; and 53 percent said that the administration s actions had been about right.  A solid majority of Republicans and a strong plurality of Democrats said that the administration s actions had been about right.  Two-thirds in the same poll said that Americans will have to trade some freedoms for safety.  In another question, only a quarter were concerned about losing their civil liberties.</P> <P>Should the government be able to monitor the emails and phone calls of ordinary Americans?  A solid majority in the new CBS/New York Times poll say no.  Should the government be able to monitor the emails and phone calls of people the government suspects of being involved in terrorist activities?  An even larger majority, 76 percent, said yes.  Polls taken at the time of the NSA wiretapping and the Treasury s monitoring of international money transfers, when those were made public, showed strong public support for both programs.  </P> <P>To the extent that concern about civil liberties has risen, the data suggests that for most Americans the cause is not administrative actions but rather their long-held suspicions of federal government power.  Something that we had seen in a whole series of incidents over the last twenty years.</P> <P>In the July LA Times polling, 68 percent said Gitmo should remain open.  In the same poll and many others, Americans say that it has damaged our reputation abroad.</P> <P>There is some evidence in the new polls from the past week that there is more receptivity to racial profiling at airports.</P> <P>Finally, how do Americans think the war is going?  The proportion that believes that the terrorists are winning is now about 20 percent.  That represents a slight increase from polls in 2003 and 2004.  Are the United States and its allies or neither side winning?  In poll after poll, Americans are divided down the middle.  </P> <P>That s a quick snapshot of where public opinion is and I d be happy to answer any of your questions about it.</P> <P>Danielle Pletka:  Karlyn, I guess the problem that so many of us have is trying to figure out how to reconcile these polls.  There s so many diametrically opposed results, there are so many different inferences that you can draw about what the public thinks about these things.  If you had to look at trend lines overall, what would you say are the most important messages that political leaders should derive not from one poll or one particular result, but from the overall set of results?</P> <P>Karlyn Bowman:  Contradiction is an essential property of public opinion.  We see it not just in this area but in virtually every area.  So it does take a lot of work to sort through the polls and try to figure out what people are saying.  First, that Americans recognize that it s a much more dangerous world.  Second, I think another important thing to take away from this vast collection of data that we have is that Americans expect this to be a very long war.  Third, they re willing to give the administration a lot of latitude in this area.  I think the data on civil liberties certainly shows that very clearly.  Fourth, Americans are still 9/11 is still very real to them and it s something that has not diminished at all in the last five years.</P> <P>With that, please let me know if you have any other questions.  I m available here at AEI.  The two public opinion studies that we ve done that I mentioned at the beginning of my remarks Public Opinion in the War on Terror and Public Opinion in the War on Iraq are up on the AEI website.  They re easily indexed, they re very easy to use, and you can get a sense of what I ve said and how that compares to what other pollsters have said.  Thank you.</P> <P> </P> <P>Panel II: The State of Homeland Security</P> <P> </P> <P>Gary Schmitt:  Good morning.  Welcome to our second panel on Five Years Later: A Progress Report on U.S. Security Post-9/11.   Our second panel today is going to be on The State of Homeland Security.   My name is Gary Schmitt, I m a resident scholar at AEI and director of the Program on Advanced Strategic Studies here.  </P> <P>We have a great lineup.  We have a very sophisticated way of proceeding which is we ll proceed alphabetically.  Let me go through bios really quickly.</P> <P>Clark Ervin is director of the Aspen Institute s Homeland Security Initiative.  He was the first inspector general of the Department of Homeland Security and prior to that was inspector general at the State Department.  All for which he should be given the Medal of Freedom right away.  He s also worked in the White House under the first Bush Administration and worked with the current president when he was governor.  A lawyer, he is also the author of Open Target: Where America Is Vulnerable to Attack.</P> <P>Second up is my old friend Mike O Hanlon, who is senior fellow in foreign policy studies at the Brookings Institution.  He has written on almost everything except repairing cars.  He s a visiting lecturer at Princeton University.  His latest book is on defense strategy for the post-Saddam era and along with his colleagues he s an author and editor of the Brookings book, Protecting the Homeland, 2006-2007, which is an update of an earlier study Brookings did.</P> <P>Finally is Professor Robert Powell, who is the Robson Professor of Political Science at the University of California-Berkeley.  He is one of the nation s foremost theorists when it comes to applying game theory to international relations.  His most recent book is In the Shadow of Power: States and Strategies and International Politics.</P> <P>With that, our panelists will speak for 10-12 minutes and then we ll open it up for questions.  Clark, if you would start.</P> <P>Clark Ervin:  Thank you very much, Gary, and thank you very much for having me.  I ll be very brief, as requested.  Chances are most if not all of you in the room know a little bit about my work, both inside government as the inspector general of the Department of Homeland Security and since then looking at the Department of Homeland Security from the outside.  So those of you who are familiar with my work know that I ve been very critical of the record of the Department and the Administration with regard to the critical issue of homeland security.</P> <P>So it may surprise you to hear me say, by way of beginning, that in answer to the question whether we re safer five years later, my answer to that question is yes.  Notably in the area of aviation, where of course we ve spent some $18-20 billion to make us so.  Of course we have something to show for it.  We have hardened cockpit doors, some armed pilots, a significantly higher number of air marshals, and for all the problems better-trained screeners.  </P> <P>But to my mind the question of whether we re safer today than we were five years ago is not the only question.  In the scheme of things, it s not in my judgment the most important question.  The most important questions are, are we as safe as we can be?  Are we as safe as we need to be?  Are we as safe as we think we are?  Sadly for the country, it seems to me, the answer to all those questions is no.  </P> <P>Let me continue where I started.  Even in the area of aviation, where again we ve spent more resources and devoted more time and attention than any other sector, we have precious little to show for it.  Investigation after investigation, as you all know, from my former office to the GAO and for that matter news investigations show that it continues to be just as easy literally to sneak guns and knives past airport screeners today as it was five years ago.  We all know that the recently foiled plot in Britain shows our continued vulnerability to liquid explosives, which is just the latest and perhaps the best example of a recurring theme with regard to homeland security namely, our always being at least one step behind the terrorists.  We ve known at least since 1994, when Ramzi Yusef used liquid explosives to kill one person as a test in preparation for the fortunately foiled Operation Bojinka plot, that liquid explosives is a problem.  Yet we have not developed counter-technologies for that and so the only thing that the Department could have done in response to that plot two or three weeks ago is what it did namely, to ban liquid[s].</P> <P>By the way this decision to ban liquids in response to the liquid explosives plot comes against a backdrop of TSA s decision last fall to let on small knives and small scissors onto airplanes again, the rationale for that being the number one threat nowadays is explosives and giving screeners fewer things to worry about will make them more likely to spot explosives.  People forget that there was a GAO report just a couple months ago showing that in fact components that were innocuous in and of themselves could be sneaked through airport screeners and then subsequently assembled, and then of course we have the plot which reveals that it s not just a hypothetical possibility, as TSA said at the time, but in fact a real danger that we need to be prepared against and that we are not yet prepared against.</P> <P>The issue of the continued lack of inspection of air cargo most people don t understand that at least 20 percent of the cargo that goes on airplanes in this country does not go on dedicated cargo planes but instead on passenger planes.  Given the frequency of air travel on the part of average Americans that means that at one time or another every American has probably been on a passenger jet in the cargo hold of which is cargo that has not been inspected.  There are supposed to be random inspections and there s supposed to be inspections if there is specific intelligence indicating that a particular package should be opened and screened.  But whether that s done we don t know because believe it or not any inspections that are done are not done by the government, by TSA, but instead by the airlines even though of course the whole rationale for creating TSA after 9/11 was the recognition that left to their own devices the airlines would put profit and speed at the expense of security.</P> <P>So even in the area where we ve devoted more time and attention than any other, we remain dangerously vulnerable.  Let me just quickly touch on port security and mass transit security, and then I ll turn it over to my colleagues and answer your questions.</P> <P>We all recall the 2004 hotly contested presidential race.  We all know that President Bush and Senator Kerry disagreed about every single thing during the course of that election except for one thing: that the number one threat facing this country, as they both acknowledged in the first debate on foreign policy, is the threat of nuclear terrorism.  Further, all experts, whatever their political persuasion or their ideological position, agree that the likeliest way for terrorists to smuggle a weapon of mass destruction into this country would be through one of our 361 seaports, among one of the 26,000 cargo containers that comes into those seaports every day.  Yet we continue to inspect only 6 percent or thereabouts of those cargo containers for radiation, even though at the Port of Hong Kong, the world s busiest port, there is 100 percent inspection for radiation and a fee in the range of $20 would be sufficient to fund such a program worldwide.</P> <P>The two programs that the Department touts as the antidote to the concern about nuclear terrorism are basically chimerical.  The Container Security Initiative makes perfect sense in theory.  Waiting to inspect a cargo container when it comes to an American port may well be too late so let s push the borders out and have those inspections take place overseas before the cargo sets sail for the United States.  Who can disagree with that in theory?  The problem is how it works in practice.  The foreign inspectors refuse to inspect cargo that our intelligence deems to be high-risk more than 80 percent of the time, according to a recent GAO report.  </P> <P>The other program, the Customs-Trade Partnership Program, essentially gives the benefit of reduced inspections to companies that are in the supply chain simply for their having submitted paperwork attesting to their having had a very rigorous security program in place.  Any validation that takes place is done after the fact rather than before the fact.  To date only about 11 percent of those firms have been validated as having in fact the security programs they claim to have.  By the way, any validation that is done is limited to only those aspects of the security program that the company permits the Department of Homeland Security to inspect.</P> <P>A final point, mass transit security.  We ve had a number of wakeup calls since 9/11 to the vulnerability of our own mass transit systems here in the United States Madrid, London, the recently discussed plot regarding an Iraqi plot against the subway system in the United States.  The good news is after each of those scares, all the right things were done by state and local authorities in partnership with the Department of Homeland Security.  Increased armed police presence, more bomb-sniffing dogs, greater use of bomb sensors, technology bomb sensors, some random bag searches in New York and New Jersey.</P> <P>The problem is after those scares have faded from the headlines, all those measures were either ratcheted back or done away with altogether.  If I were a terrorist I would simply wait until those measures were relaxed or done away with before striking.  What needs to happen of course is they need to be institutionalized, and they haven t been institutionalized.  There s a reason for that, which leads to my conclusion.  </P> <P>I think there are three fundamental reasons why the Department of Homeland Security has failed to live up to the promise of its name.  The first is and I m very glad that Gary stressed my conservative and Republican credentials in my talk, because I think first of all it s true and secondly the fact that it s true gives greater credibility to what I have to say in this regard.</P> <P>If there are any problems in this country that can be dealt with without money, homeland security is not one of them.  You can t do homeland security on the cheap.  Part of the problem from the beginning is that the Department of Homeland Security has been underfunded.  The Department has not helped itself, incidentally, by having misspent millions of dollars that it s been given.  But significantly more money must be devoted to homeland security if we are to be as safe as we can be.</P> <P>The second point is leadership.  We all know now after Katrina that the then-head of FEMA, Michael Brown, was literally and figuratively in over his head.  The problem is that this leadership gap was not and is not limited only to FEMA.  Unless and until we have expert leadership at every level of the Department of Homeland Security, the Department will continue to be dysfunctional, and more dysfunctional than government traditionally is.</P> <P>The final point is a culture of accountability and openness.  Just to give you one closing anecdote.  Hearkening back to what I said at the beginning about aviation, the first substantive piece of work that I undertook as the inspector general of the Department of Homeland Security was to send my own team of undercover investigators to airports around the country, to try to sneak guns and knives and bombs past the screeners.  All too often we were able to do that.  Let s say at Airport X we were able to succeed in getting those weapons through 40 percent of the time.  </P> <P>When I reported those results to the then-head of TSA, Jim Loy, who subsequently became the deputy secretary of the Department of Homeland Security, he stopped me to say, Why are you calling that result at that airport a failure rate of 40 percent?  Why not call that a pass rate of 60 percent?   My response to that was, It doesn t matter whether the screeners are catching things 6 times out of 10 if they re failing to catch things 4 times out of 10.   After 9/11 we know that one time can be one time too many.</P> <P>So rather than working to make bad results better, the then-leadership of the Department of Homeland Security was working to make bad results sound better.  Sadly that attitude and culture remains at the Department of Homeland Security, and unless and until it s corrected the Department will not live up to the promise of its name and as a result America will remain an open target for terrorists and we will be far more vulnerable than we need to be.  Thank you.</P> <P>Gary Schmitt:  Thanks, Clark.  Your remark about the 60 percent reminded me I thought I never would hear that again but that s what my son said when he brought home a test in algebra back when he was a freshman in high school.  I suppose that says something about the Department as well.</P> <P>Clark Ervin:  He can be the deputy secretary one day.</P> <P>Gary Schmitt:  He s going to need a job, I think.  Michael?</P> <P>Michael O Hanlon:  Thank you, Gary, and all of you for the chance to be here.  That was an exceptionally eloquent and well-organized presentation, which is hard to do on homeland security.  I really appreciate the framework of being able to follow on now and speak about a couple of other issues that Clark did not mention but that he established a very good framework to begin to think about the problem.  He went over airplanes and cargo and mass transit.  I want to talk about three other categories: intelligence; the borders and specifically borders against the illicit movement of people; and then the private sector.  I think between these six topics we will have begun to paint the beginnings of a solid framework for addressing the entirety of the problem. </P> <P>I would agree with his tone and his overall assessment.  I think we are safer but not safe enough.  This is actually not a great topic for sharp partisan acrimony because frankly I think the Bush Administration did a B/B- job on this so far but regardless of whether you agree with me and want to give them a little higher or lower grade, the bottom line is we have a long ways to go, which makes sense because it s a relatively new problem, at least with the urgency that we have now been addressing it for the last five years.  There is no way that any administration, even if it had done better, would have solved the problem.  We ve been debating defense strategy first in the Cold War then the post-Cold War era for sixty years in the era of the modern Department of Defense.  Debates there continue.  So it would be very surprising that we could have somehow begun to resolve this issue in five years.</P> <P>Yet we don t have the luxury of being somehow restrained or passive or leisurely in our approach.  So I m very glad for the tone that Clark has introduced, to say basically let s not consider a slight improvement or a modest improvement to be good enough.  I think that s the right attitude for anybody, regardless of partisan affiliation, to go into this debate with in the next few years.</P> <P>I ll say one very supportive thing of the Bush Administration and then be a little more critical in the next two areas.  The supportive thing has to do with intelligence.  Again, I m going to talk about intelligence, border security and the private sector.</P> <P>Intelligence sharing and cooperation and the way in which we use intelligence to find dangerous people before they re in a position to strike, I would submit, is the most important tier of homeland security.  I don t want to imply that this is a one-layer defense, that you can somehow content yourself with good intelligence.  Nor do I want to say that we ve solved that problem entirely by any means.  But it is the most important aspect of homeland security.  We have just too big of a country to protect systematically.  Therefore you have to start as soon as you can in the plausible scenario by which a terrorist would strike. </P> <P> You want to find these people before they re in a position to strike, which means obviously you want to find them overseas in their sanctuaries, and therefore the overthrow of the Taliban was the right thing to do.  You want to discourage them from being created essentially new recruits for al Qa ida.  I know Panel I addressed this question.  Here we have not done as well.  But we have the right philosophy of trying to go after individuals before they can even get into the country and try to create watch lists, try to look for people, try to look for their financial transactions, try to look for their illicit travel documents, try to listen to their communications.  Whether you agree with every specific thing the Bush Administration has done here or not, they have had the right philosophy of putting a premium on prevention and intelligence.</P> <P>Now I would have much preferred that it be done in a way that could have built bipartisan consensus behind this approach.  The approach is very logical, very sound, but unfortunately it s sometimes been used by this administration more it seems as a mechanism to produce a chasm with the Democratic Party and therefore as a political strategy towards winning an election, rather than building the consensus that should have been feasible.  Most of the wiretapping work we re doing, most of the Patriot Act-like improvements that we ve done, in my judgment, make sense.  There should have been ways to do this in a fashion that did not divide the country, did not inflame people s concerns about civil liberties infringement or executive branch overreach.  </P> <P>So I am critical of the Bush Administration for style and for political approach, but I think substantively most of the surveillance methods, most of the intelligence reform efforts that we ve made, are appropriate because you have to start at that tier.  There s a lot more to say and we can get into that if you like, but I just want to make that overall message about intelligence, forward defense, preventive efforts, as the right way to build a foundation for the rest of your homeland security work.  Here I think the administration s approach, substantively if not politically, has been reasonably good.</P> <P>On the issue of the borders, on the one hand border monitoring of people trying to get into the United States has improved at official checkpoints because of these databases getting more integrated, because of our emphasis on constructing more dependable and reliable search mechanisms.  It took a while.  There were some glitches along the way, some software problems.  Sometimes not always enough urgency from the administration.  But overall five years later I think we do have a database system, at least within U.S. intelligence, that is working pretty well and helping us at official checkpoints to find a lot of people before they get into the country.</P> <P>We are not doing as well in the open land borders.  Clark talked about the issue of containers, which is obviously another concern.  But in terms of open land borders, as I understand the latest practices for example at the U.S.-Mexico border or the U.S.-Canada border, we still have not worked out what kind of documentation is considered sufficient to make sure that somebody is who they say they are, to make sure they re not using false papers.  So in this sense this applies to the official checkpoints, because we re doing better maybe at airport entry points than we are at land border entry points.</P> <P>We also are not even inspecting every individual in a car coming across the U.S.-Mexico border.  We check the driver s license of the person in the car driving and we hope for the best that we re going to be tipped off somehow to the possible existence or presence of unsavory characters in the backseat by the instincts of our inspection officers as they check out the driver s license of the driver.  When I go to the airport in Tokyo or someplace like that, I m giving my driver s license or passport like every other person on the bus long before I even get onto the premises of the airport.  Yet on the U.S.-Mexico border we have a much more lenient standard.  I think it s a mistake.</P> <P>It would be hard to set up enough lanes to be able to inspect everyone s documents as they come across.  It s hard to build consensus with our partners in Mexico and Canada on what travel documents are considered dependable enough and reliable enough and tamper-proof enough to be usable.  But nonetheless we ve got to get on with this and we haven t done a very good job.</P> <P>Then we still have way too much of an open land border.  Here I think the president s reasonable initiative to add a few thousand National Guardsmen to the border was fine.  But it doesn t really fundamentally address the problem and it s a little bit of a late way to think about it five years in.  So I m not sure in the context of the national security and the immigration debates that we can ever have a reliable enough security perimeter along our southern border in particular, but we re not doing that well on that one.  I don t have any magic answer that s going to stop the problem but I do think the overall pace of building up border agents has been too leisurely.  Congress had to intercede this past year to put more pressure on the administration, even to increase the number of Border Patrol agents by another thousand people, which I still think is probably well below where we need to be.  So on this one we have not seen enough urgency.</P> <P>I ll finish on a more critical note, even though I was becoming a little more concerned in my discussion of border security.  Where I m really critical of this administration probably even more than on the container and mass transit areas is helping the private sector figure out a strategy to protect itself.  This is also where partisan philosophies or political philosophies come into play.  I believe this administration has been quite reluctant to want to tell the private sector anything about what to do to protect itself, because this administration has an anti-regulatory philosophy.  That s understandable at one level but we are a nation at threat, at risk, as President Bush reminds us every day.  If that s the case, how can we be so laissez-faire about having huge chemical plants near major metropolitan areas that essentially have no obligation whatsoever legally to improve their security?  </P> <P>In recent years some chemical manufacturers have become a little more proactively assertive on their own in trying to devise better protocols for protecting their own facilities and their own perimeters.  But this has been an area of remarkably indifferent neglect by the Bush Administration on balance.  I think frankly it is a huge oversight.  If I were writing strategy for the Democratic Party, I would not necessarily begin with the container issue.  I would begin with this issue.  There are just too many big targets out there waiting to be struck.</P> <P>The problem is, and maybe this is why the Democrats haven t gone this route, what do you do about it?  We have tens of thousands of chemical facilities in the United States, for example.  You can t mandate that every single one have 24-hour surveillance of redundant chain wire perimeter with the ability to surge response teams from their own payroll to go out and check any possible infraction that s probably going to be a deer or somebody who s lost after a night of drinking more often than it s going to be a terrorist.  So it s a lot of effort to put into protecting a plant that may have only minimal toxic capacity and only minimal danger therefore being posed to the surrounding community.</P> <P>So we need some systematic way to think about this.  We need different tiers of chemicals to be established and identified.  The American Chemical Society and other places know how to do this but we haven t taken their knowledge and translated it into a proper set of requirements and protocols for how to protect these facilities.  </P> <P>That s just on the chemical plants.  Another big area is skyscrapers in big cities.  If you re in New York, New York s got more serious than most of the rest of the country.  But New York is the exception and most places with skyscrapers still don t do a lot of basic things very well.  They may still have the air intake for the air circulation systems at street level, unprotected, which makes them vulnerable to anthrax and other things being distributed into the system.  They may have parking garages where there s no security procedures whatsoever, running the risk of the 1993 World Trade Center attack being repeated on their premises.  They may have big lobbies full of very fragile glass in the lower floors within a few feet of a street where truck bombs could drive, making no provision for this possibility.  There are relatively inexpensive ways to harden glass and still have it look pretty good.  I think skyscrapers and big facilities in this country need to think through such measures.</P> <P>It s a big question.  I ve already reached about the end of my time.  But one more way you can try to address the question of how do you decide which skyscrapers to protect and which ones not to, in order to avoid bankrupting the country while you improve homeland security, is to let the insurance market help you adopt best practices, by requiring that owners of facilities with a certain value or above have some kind of terrorism insurance.  Then allow the premium structure for the insurance to encourage best practices.  </P> <P>So just as you or I are rewarded by our car insurance company if we have a good year of safety or a good five or ten years, companies or owners of buildings that do certain things with their air circulation intakes, with their glass, with checking cars that park underneath their buildings, could be rewarded with a somewhat reduced rate for their terrorism insurance.  You try to have best practices gradually disseminate into the private sector through this kind of an approach, as my colleague Peter Orzag [phonetic] has written in our Brookings work.</P> <P>So that s one more approach.  In any event we need to take on this problem.  It s hard, it s complex.  There are people who are going to get worried that we re trying to regulate the country into economic debt if we re not careful.  These concerns are legitimate but they re not an excuse to ignore this glaring vulnerability that remains.  After all, the private sector is 85 percent of our country by property value, according to the estimates that I ve seen.  To view it as something we just don t bother to try to protect frankly won t do.  It s time for the next Congress and the next presidential campaign to focus, if Mr. Bush won t, on how to address that problem as well.  Thanks very much.</P> <P>Robert Powell:  Thank you for having me at this timely meeting.  I hope that my talk will dovetail very much with the preceding two, especially Mike s comment about a systematic way to think about it.  I m very much an ivory tower academic and I guess I have the luxury of having an office very far away from Washington.  I m going to try to cut into this issue a little bit differently, commenting less about the implementation of some of the things DHS has done and more the principles that seem to underlie it.  Frankly I m going to be critical of them, ideally in a way that we will come out with some ideas of a systematic way to approach the issue.  </P> <P>But in a world of too many under-qualified caveats and reports, I do want to begin with an important caveat.  I m very far away from the issues that are centered here in Washington and especially among people who actually bear the responsibility of having to make policy in extreme uncertainty and at best with patchy information.  So the ideas I m going to throw out are really how things seem afar.  It will be up to others to judge if they actually have any use at all.</P> <P>Let me begin.  DHS faces an incredibly hard problem obviously.  Even if you just thought of the organizational problem, it would be unimaginably hard to think of the largest bureaucratic reorganization since the end of the Second World War.  You add onto that, by the way while you re doing that, you need to construct a national unified effort to improve homeland security it s hardly surprising that we ll fall short of that mark.</P> <P>Secretary Chertoff has throughout emphasized that we can t protect everything.  Resources are finite and should be allocated on the basis of risk.  How do we measure and assess the risk of an attack from a strategic adversary who responds to our defensive efforts?  That is different from the typical insurance problem not completely unrelated, but very different.  When we re trying to think about allocating resources to defend against a strategic adversary, what are some of the guiding principles we might use to shape our thinking, use as a guide star, as we try to implement a policy in a complicated political world?</P> <P>I want to try to focus on three questions.  How do we think about the problem of allocating defensive resources against a strategic adversary over the long run?  I m sure some of you will think this is a Berkeley ivory tower academic and I m not going to deny that.  I hope the answer ultimately has some insight but again, you ll be the judge of that.  </P> <P>How do we compare that to the principles the implementation is very hard and we ve heard a number of legitimate and strong criticisms of that but even if we got the program right, what are the principles and how well do they correspond?  And then how might we do it better?</P> <P>Protecting against natural occurrences fires, earthquakes, hurricanes, floods that s a hard enough task.  Strategic terrorists are even harder.  They re going to try to strike where the defender is weak and the expected gains are high.  Nobody thinks I hope nobody thinks that rebuilding the levees around New Orleans will affect the probability of another Katrina, but probably all of us think that if we work very hard to defend against one kind of attack, that will affect the probability of the attack.  Indeed that s why we re doing it, because we want to make an attack less likely.</P> <P>But if that s true, then the way we need to think about allocating resources to defend against strategic terrorists needs to incorporate this feedback effect, this strategic interaction.  DHS in principle isn t even doing a very good job of this, and to explain why I of all things want to remind you of macroeconomic policy in the 1960s and 1970s.  I m going to take you back to a completely different domain in these quaint old days of policy disputes over macroeconomic policy.  </P> <P>May I just remind you of that Phillips curve that was the center of macroeconomic policy in the 1960s and 1970s.  The Phillips curve was a relationship between a tradeoff between unemployment and inflation.  If you pursue low unemployment, the cost of that was higher inflation.  In this quaint vignette in the 1960s, Democrats stereotypical Democrats of that generation tended to want to pursue policies that would pursue lower unemployment but at the cost of higher inflation, and in this little vignette Republicans of the day again very stereotypically wanted to pursue lower inflation but at the cost of somewhat higher unemployment.  </P> <P>Robert Lukas [phonetic], in a work that would eventually win the Nobel Prize, said there s a fundamental problem with thinking about the issue this way.  His argument has had profound policy implications for macroeconomic policy.  The basic point is that fiscal and monetary authorities set policy.  Economic actors firms and others interact.  The thing that we re trying to estimate, the Phillips curve, is really a mixing of both policies and responses.  What Lukas argued is that then you can t use that as a policy tool because you re part of it.  If you re the policymaker whether the feds or the fiscal authorities if you re going to try to pursue a Phillips curve, you are part of the historical data on which that estimate is based.  As soon as you try to pursue it, it will move.</P> <P>Let me now compare to what in principle DHS seems to want to do when they make comparative risk assessments that are supposed to guide the allocation of resources.  Risk is a term of art.  They re going to decompose it into three ideas.  Consequences if an attack happens and it s successful, what s the loss?  Measured usually in terms of lives, casualties, monetary.  Vulnerability what are the chances that an attack would succeed?  The threat what s the probability of that kind of an attack?</P> <P>Multiply these things together and at least in principle as a kind of guide star for our thinking, we have some notion of the risk, expected loss, associated with terrorism, directed at a particular target.  Chemical facilities, which I ll come back to in a moment.</P> <P>As Mike pointed out, 85 percent of the critical infrastructure is civilian, owner-operated.  DHS is going to have them do most of the consequence and vulnerability assessments.  DHS s part is to look at the threat.  They re going to use intelligence, expertise on terrorist organizations and terrorists in particular, as well as classified information, to try to assess the probabilities of attack.  At least according to the GAO, who s quoting people inside, this has turned out to be the hardest part of implementing their program of comparative risk analysis.  Turns out it s very hard to use intelligence this way, because what we re really trying to do is estimate probabilities.</P> <P>That s an ideal, but take a step back.  Suppose we could overcome the data limitation problems.  Suppose we had lots of historical data.  Suppose we could crunch the numbers and get a meaningful probability, some sort of reasonable estimate.  This isn t a problem of data, the way it s been construed.  This is a problem of how you think about the problem.  That data is based on historic attacks but presumably is also based on historic vulnerabilities.  </P> <P>The reason why we re going to spend money is to try to change those vulnerabilities.  As soon as you do, strategic terrorists would see what you do or anticipate your hardening efforts guarding chemical facilities even better and they ll adjust.  Just as the Lukas [phonetic] critique of the macro policy based on the Phillips curve didn t really hold water when you thought about it, because you were part of the thing you were estimating, trying to base threats, probabilities of attack, on historical data is extremely problematic.  I don t want to say it s useless.  Indeed there s a lot of probably valuable information in there.  But the thing you re going to back out of the data analysis isn t a simple probability of an attack.  What you do with it turns out to be very complex.</P> <P>I want to spend just a couple more moments and just throw this out there.  I ve written a paper that elaborates some of these ideas that may be up [on the Berkeley working papers website].  Suppose you had $100 billion you wanted to spend over a certain length of time to harden some of the facilities that Mike and his colleagues have laid out, here briefly and in more detail in their book.  How should we think about it?  Swallow hard, I m from Berkeley go back to your old days in graduate school when you were forced by your professor to swallow hard.  Let s assume for a moment we knew terrorist motivations and goals.  Suppose we d actually done a good job of assessing vulnerabilities.  Then if we know motivations and goals and vulnerabilities, we should be able to get some idea of what the most attractive targets would be.  It s pretty obvious then, that s where you want to spend the money.</P> <P>But if you re doing a good job, the more money you spend on those most attractive targets, eventually they re not going to be any more attractive than what were initially the second-most attractive targets.  So now if you ve got more money to spend, you need to start spending it on both of those.  You spend on those, they become less attractive, eventually they re no more attractive than what was the third most attractive.  You just follow this basic logic until I pull $100 billion out of the air.  It s a very complicated issue about where the margin is.  But that s a way to think about integrating strategic interaction.  It comes very close to ideas that Mike and others have said.  </P> <P>Let me conclude by trying to tease out even from this simple, maybe simplistic, formulation a couple of what I hope are instructive points.</P> <P>The first has to do with how we should be thinking about allocating our analytic resources.  If you think about that little algorithm I told you, the probabilities of what would normally be called threat assessments don t actually ever enter in.  The thing you really want to understand, the driver in that analysis, is first vulnerabilities arguably that s a physical property of the sites we re trying to protect; we can estimate that.  The other thing you want to know are motivations and goals.  Working with historical data may be good for some things but it s not the probabilities to put into this analysis.  The thing you really want to be investing in is trying to understand goals and motivations, or in the jargon of game theory, payoffs.  So that would be the first suggestion to come out of this very simple formulation.</P> <P>The second one is, suppose for the sake of argument swallow even harder that all our adversaries wanted to do was kill Americans and kill as many as they could, or impose the largest economic costs they could.  If you re willing to assume that, then we already know their motivations.  The thing we need to then do is look at what kinds of attacks would kill and impose the largest economic harm.  That s the most attractive sites, mitigated by vulnerability that s what you would want to harden, and so on.  We d sort of come out with a plan very much a simplified version of what Mike and his colleagues describe in their book.</P> <P>The thing I want to highlight though is that s predicated very much on this kind of mirror imaging what we value is what our adversaries value.  Maybe it s not a bad thing to do if you re very unsure, but our adversaries probably don t just want to impose casualties.  They have more subtle goals, how they think about what would be an attractive target.  Once again the emphasis is on investing your resources in trying to figure out what that is.  Mike in an earlier version listed a number of criteria for allocating resources, going after the worse sites.  </P> <P>This is the kind of algorithm I said gets you there.  He has an important qualification or addition not only economic loss but symbolic significance.  You interpret that more broadly, it s what are motivations?  The key thing is not just we want to defend against them.  The key is their motivations, not ours.  If they don t care about the Statue of Liberty but we do if they don t care, it s probably not going to be high on their list.  We want to understand what they think are symbolically important and invest resources there.</P> <P>Gary Schmitt:  Thanks, Bob.  We re going to open it up for questions.</P> <P>Question:  I m Joe V. Joseph [phonetic] with Systems Planning and Analysis.  I think everyone in Washington would agree that the Department of Homeland Security has not lived up to the potential that was established for it when the Congress and the president created this four years ago.  Now that we have the luxury of some perspective, I m interested in your thoughts on whether it was the right decision to establish a Cabinet-level department or whether all the time and energy and attention that we have spent on the merger of 22 disparate government agencies, perhaps that would have been time and energy better spent in addressing some of the real security challenges that you ve laid out today.</P> <P>Clark Ervin:  It s a very good question and that s one that I have struggled with.  My answer to it may be surprising.  I actually do not think that creating the Department of Homeland Security was a mistake.  I certainly don t think that the answer to the Department s present troubles is to do away with the Department.  I think that s the worst possible thing we can do.  I think part of the problem in the last few years is there s been so much government reorganization that the last thing we should do is to organize government yet again.</P> <P>There is no question that one of the main reasons why 9/11 if not happened then 9/11 was not prevented was the fact that responsibility for various discrete aspects of homeland security was dispersed among a large number of agencies.  Further, not just dispersal, but the fact that there were both legal constraints, as we all know, and cultural constraints that militated against these agencies working together.  In theory, the notion of bringing all the relevant players together into one team would make them more likely to play together and against al Qa ida as opposed to among themselves.  </P> <P>So it seems to me that had we not created the Department of Homeland Security, we would have eventually had to do so.  The problem is not the conception of the Department, nor was the problem the strategy that the administration laid out.  The strategy that underlies the creation of the Department of Homeland Security makes perfect sense.  I won t take time to go through it.  </P> <P>But it s the execution of the Department that s the problem.  Part of it was the short timeframe during which the Department was created.  The unrealistic deadlines that Congress set for many tasks to be carried out by the Department.  The fact that many if not most of these 22 agencies were seriously dysfunctional to begin with and they were put together so hastily that there was not time to do away with those dysfunctions before the Department as a whole was created.  So as I said in my book, you had one pathological agency put with another, which merely compounded the dysfunctions.</P> <P>All that said, as I said in the conclusion to my remarks, if the Department were today or in the next administration or the next Congress given sufficient resources, with sufficient controls to make sure that those resources were not wasted; if the Department were given leadership that is both expert at counterterrorism and expert at the arcane art and science of managing huge bureaucracies; and if the Department were to embrace a culture of openness and accountability, the Department of Homeland Security could be made to work.</P> <P>Michael O Hanlon:  I don t think it was a mistake, but I think it went too far.  I would have focused on the border agency integration piece of it and not presumed that we could handle everything through DHS.  Of course no one claims we do handle everything through DHS but we try to do so many things there including FEMA, including whatever minimal level of protecting the private sector we do, including some other such things there s a presumption that if you have a problem, just assume DHS is handling it.  I think that s actually been intellectually counterproductive.  I think DHS should have been given the job of coordinating border functions involving people and goods.  Then we should have left some of the other agencies independent in order to do their tasks.  </P> <P>Maybe that would have given a little higher priority, for example, to things that DHS wound up not spending much time on but should have been, such as the issue of protecting the private sector, such as the issue of trying to help local police units around the country do what New York and frankly only New York has done to the right level, which is to create dedicated counterterrorism capacity within its own police force.  So that cops on the street are going out there looking for initial indicators of potential problems.  New York has several hundred people doing this.  My former colleague and your former colleague Richard Falkenrath is now running that operation.  It s a very good operation.  Michael Sheehan had done so before.  Several hundred people, as I say.  Other cities wouldn t be expected to have such large capacity but they should, if they re large cities, probably have dozens of people doing this kind of work, not depending entirely on the FBI.</P> <P>But again, I think our thinking has been, let s do intelligence reorganization, let s create DHS, and those two things should basically take care of the problem.  Unfortunately therefore if the intelligence reorganization or if DHS did not address the problem, the rest of the country and the rest of the government felt some sense of exoneration from having to think about those things itself.</P> <P>So in the end I would have done a smaller DHS, as my colleague Ivo Daalder and Jim Lindsay argued at the time, recommending against this super-agency.  I think I would have then kept FEMA for example on the outside.  </P> <P>Having said that, let me conclude with one point.  I do not favor taking FEMA out now for some of the same reasons Clark was mentioning.  I think at some point you have to say the perfect solution is not so much in the exact bureaucratic organization, it s in having good people, adequate resources and proper attention from top political leaders.  So I think at this point instead of presuming that another reorganization would fix the problems that exist, we should work within the model we ve got, even though since you asked historically I would say it wasn t done quite right.</P> <P>Question:  My name is Bruce Subbs [phonetic], I m from SAIC.  Admiral Allen recently gave a speech up in New York he s commandant of the Coast Guard and he stated that maritime security is more than port security.  He also stated that if you find a WMD in a port, you re dealing with consequence management not security.  My question is, do you think we re a little bit too container-centric in our view of the maritime domain given that the terrorists, to use a container, will lose positive control, given that container ships catch fire like the Hayunde Moru [phonetic] did recently given that containers frequently are swept off the ships into the North Atlantic in transit.  </P> <P>As James Carafano says at Heritage, a better way of bringing in WMD might not be in a container but just across the border from Canada or Mexico or using a dedicated vessel.  So I m curious if you think there s too much of a national debate focused on containers when there really are gaps in our ability to counter the terrorists in other areas.</P> <P>Clark Ervin:  I think this is a larger point to make outside the context strictly of maritime security.  Certainly there are other ways in which a terrorist could smuggle a weapon of mass destruction into the country other than cargo containers.  There s no question about that.  Certainly there are other catastrophes to be worried about besides the potential catastrophe that we re talking about here now.  But that is not to say that we shouldn t take every prudent step protecting against what we all recognize is the potential.  Sure a cargo container could go awry without detonating.  There s no question that s possible.  But we all know that the converse is true as well, and if the converse were to happen the consequences would be catastrophic and they would dwarf the consequences of 9/11 by several factors.  </P> <P>I might just mention, as Bob stressed, Secretary Chertoff was quite right to say and this was a huge dividing line between him and Secretary Ridge Secretary Ridge, it seemed to me, tended to take an in-box approach to security, doing a little bit of this, a little bit of that, without having a strategic approach.  We can t do everything.  We don t have unlimited resources.  We can t make ourselves invulnerable.  So this notion that we have to figure out what the likeliest threats are, what the greatest consequences would be from attacks and what our greatest vulnerabilities are, and then allocate resources and organize programs accordingly, makes perfect sense.  If that template is used, then there is no question that port security, maritime security writ large, has to be at the very top of our agenda.  We ve done relatively little.  We will begin to do the things that I and others have outlined if we re hit with an attack on port security.  That is our problem.  We continue to be reactive rather than proactive.  As long as that s the case, we re going to be far more vulnerable than we need to be.</P> <P>Michael O Hanlon:  It s a good question.  I ll briefly answer it somewhat differently, although I don t disagree with Clark, but I want to take a different perspective.  I can t decide in my own head whether it s worth going to 100 percent container inspection rigor.  I need more information to reach that conclusion and I think the country does too.  So if there s anybody out there, a young graduate student or a new scholar at an institute or somebody who s willing to address the question of how would we adopt the Hong Kong standard in this country, how much would it take in terms not only of cost but in terms of time, in terms of rebuilding ports to create enough capacity so you could put containers through the system I would like to see that study.  </P> <P>I think it would be a very useful thing as we sort through whether we re going to aspire to that standard.  The Democratic Party has now put it on the agenda as one of the desirable goals.  I m not persuaded but I m also not persuaded that they re wrong and I m not persuaded Clark s wrong.  It s a very powerful argument that we should try to do what s already been proven to be doable by Hong Kong.  So if it costs us $6 billion and can be done in two years and no major port design is necessary, I d probably say yes.  If it s going to take us $75 billion and take the better part of a decade, during which we re still vulnerable, and require many major ports to be redesigned, I might lean towards trying to boost up that 6 percent but thinking more about 10-15 percent as the right goal, not 100 percent.</P> <P>Robert Powell:  Let me just repeat or echo some of the views.  The key thing there is it seems easiest right now to do it through containers.  So the harder you make that, the upside of that is you force people who want to get WMD into the country to do it in a harder way, which gives you a better chance of stopping it.  A hundred percent chance of stopping it?  No.  You can think about it the same way, trying to estimate the added benefit of searching 50 percent versus 75 percent versus 90 or 100.  The more you search, the lower the chance anyone would get something through if they try to go through container security and the more inclined they ll be to go elsewhere.  Drawing that tradeoff is really hard but it s clear what the tradeoff is.</P> <P>Senator Fred Thompson:  Do I understand, Professor Powell, that basically you re saying it s very difficult to figure out what is most attractive to the terrorists, because as we re figuring them out, they re thinking about us thinking about them, as it were.  So that leaves us with, I suppose, if what Mr. Ervin is saying where we are now with DHS, thinking about what could do us the most harm and where we re the most vulnerable.  In other words, it s kind of a fool s errand to be trying to figure out what the terrorists are thinking.  Let s look at where we are, what can we not afford to lose, what kind of an attack can we not afford to try to sustain, and where we re most vulnerable.  Is that a correct analysis?  Do I understand what your conclusion is?</P> <P>Secondly, I m not sure I picked up on where the Department of Homeland Security is in this analysis.  What approach are they taking overall, or the rest of government for that matter, in terms of making threat assessments?</P> <P>Robert Powell:  Others may know better than I the implementation, but so far as I understand it, the consequences are measured not with symbolic significance but purely an economic and this kind of gross way you translate lives and economic loss.  But insurance industries do it.  So in a sense the idea of what counts as losses are really reflecting economic and lives.</P> <P>That might be an insurance policy, because if you could set a floor so the natural policy implication of this would be in the chemical industry, you set a threshold that chemical plants should be able to withstand a set of standardized threat scenarios with an expected loss of so much.  What that loss is is obviously it costs more to buy more security.  If you ve got a chemical plant isolated far away from people, you re not going to kill many people with an attack.  The money wouldn t have to be spent, whether it s the government or private industry to do it.  So you can sort of think of that as an insurance policy that will cap what the losses would be.  </P> <P>But it s taking a quite na�ve view that we don t know anything about motivations.  So we might be spending a lot of money defending targets that if we knew the motivations wouldn t be attacked.  To the extent we can understand better motivations, we can substitute money away from things that because they lack symbolic significance for them, even though they may very well impose high economic costs if they were attacked, but for whatever reason they don t count as a spectacular so they wouldn t be high on our adversary s list to attack, then we could not spend money on those but spend it on those that seem attractive targets.  That depends very much on how confident you are on your ability to get inside the people who have very different views of the world than you do.  I ll leave that to others to decide, but you can sort of think of the flat economic loss as a kind of insurance policy which you would refine depending on your confidence of your sense of what motivations are.</P> <P>Gary Schmitt:  One of the hardest things when I worked in government I worked both in the Senate and in the White House my job was oversight of the U.S. intelligence community the hardest thing we always found to get the intelligence community to do was actually try to understand how the other side thought.  We were very good at counting things and trying to figure out what they should be thinking, but thinking about what they were thinking was an extremely difficult task even for targets like the Soviet Union where we spent thirty or forty years at it.</P> <P>Question:  John Yoo, AEI.  I think another tradeoff that hasn t been mentioned but sort of runs through the discussion you re having is the difference between what I would think of as point defenses and system-wide defenses.  There s some things you can do which defend the whole country, like more intelligence or border control.  There are other things what Bob was talking about defending particular points.  That s what Clark is talking about too, specific targets.  That s got to be a tradeoff too.  What I don t get a sense is you have a limited pool of money how much should you spend on the things that benefit the whole country as a system and how much should you spend on protecting particular targets, like the Statue of Liberty, we think they want to attack?  That s got to be inherent in every allocation decision but I don t get a sense if you had $100 million, how many of those millions would you put to the system-wide versus defending particular points?</P> <P>Clark Ervin:  I think one of the fundamental failures of the Department of Homeland Security to date is its failure yet to develop a list of the nation s most critical sites, both private critical infrastructure sites that as Mike said, as we all know, is about 85 percent owned by the private sector, and other sectors and sites that are owned and operated by government.  Admittedly this is not very easy to do, but on the other hand it s not impossible to do either.  Obviously it s more art than science.  It can t be exact.  But rational people can surely in a three-year period determine a reasonable list of what our nation s most critical structures and sites are.  </P> <P>By critical I mean a couple of things.  If those sectors or sites were attacked there would be catastrophic economic damage and/or death or injury, and political or psychic damage.  That s the kind of iconography that we ve been talking about during the course of the morning.  Because we don t have such a list of critical infrastructure and sites essentially, as the department officially in charge of developing that list, Bob Steffen [phonetic], admitted last year, the Department is flying blind.  The absence of such a list is part of the reason, it has been acknowledged by the Department, why we had that recently disclosed ridiculous decision to decrease counterterrorism funding for New York City and Washington, D.C., that everybody including the Secretary admits remain at the very top of the terrorist target list, while increasing homeland security counterterrorism money for places like Omaha and Louisville, Kentucky.  </P> <P>Again, we can t do everything.  I always stress that.  We can t make ourselves invulnerable.  But we certainly can harden those targets that are most at risk and that if they were hit would be most catastrophic in terms of the damage and consequences.  So I think it s an urgent matter that that list be developed.</P> <P>Michael O Hanlon:  It s a big question and a big challenge.  I ll say a couple of things.</P> <P>From the New York City experience, as I understand it, when they first constructed their list of sites they needed to encourage protection of, they came up with several thousand sites.  They said this is way too much.  Then they went through the list again and came up with a list of several hundred and still said, too much.  When you find a site, the kind of things you can do are to encourage people not to use the parking garages underneath, to reinforce the glass in the lobbies, to do various things it takes some effort.  They re not super-expensive but the city itself can only do so much because of course most of this is private sector ownership.  They went through one more time and came up with a list of dozens of sites, basically the sorts of things that we were guessing al Qa ida might consider symbolically important enough as well as being economically and otherwise important enough to warrant a possible attack.  That was one approach.</P> <P>About the same time, FBI Director Mueller was saying that he expected attacks of the Hamas type in the United States to happen.  They haven t yet.  Al Qa ida is focused still on spectacular attacks, including the recent London plot.  If we ever got to the point where Director Mueller was proven correct and we started to see Hamas-like attacks against movie theaters and restaurants, you can bet that your economic analysis forcing me to come up with a fixed amount of money and allocate it would be thrown out the window.  We re going to start spending $100-200 billion a year on protecting every mall, because otherwise no one s going to go to the mall.  </P> <P>So there is no fixed amount of money but as long as we think about al Qa ida as going after spectacular targets and spectacular styles of attack, you have to do a little bit of what New York City did and then otherwise emphasize prevention.</P> <P>One last point on this is related to consequence management and how much you prepare to clean up after an attack, especially one with chemical or radiological materials for example.  On this point I m going to give a plug for my friend s book but also a criticism of one of the other books that s come out recently on homeland security, by the famous Richard Clarke and Rand Beers, two very accomplished public servants in this area.  </P> <P>There s one recommendation they have that I would strongly disagree with, and it repeats a recommendation that some of them made a couple years ago in the Council on Foreign Relations task force on this subject, to spend $15-20 billion a year more on helping our first responders get equipment so that every one virtually has chemical protective gear and does a lot of time training.  I do not agree with that prioritization, especially now.  I think big cities should have the ability to have a surge capacity for specialized units doing this kind of thing, and that probably needs some more work and more resources, but spending $20 billion a year more making sure every single one of our several million first responders can handle a chemical environment does not make sense.  We should spend more emphasis on effort on prevention, less on cleaning up after an attack that hopefully we can prevent.</P> <P>Realistically speaking, I think Beers and Clarke could be proven right tomorrow and I ll have to eat my words.  But I think the evidence from what we ve seen suggests we can take a more discriminating approach on that side of things.  Again, put more of the emphasis continually into intelligence, because there s still a lot more work to do there.</P> <P>Robert Powell:  Let me make three points.  I ll start with a little good news.  The good news is we ve in a sense seen this problem before and had a lot of practice dealing with it.  If you think about it, one analogy of border security is port security.  So the Coast Guard has had a lot of practice dealing with security issues of particular sites in ports, be it a building, a ship, and so on.  If you think about when you re trying to protect the country, as you pointed out, a whole set of targets, that s analogous to trying to protect the sites inside a port.  </P> <P>The bad news is apparently the Coast Guard others may know better than I because they participated but at least the reports are the bad news is they don t do that well.  They have not yet figured out a system to integrate these kinds of issues.</P> <P>Let me conclude with I don t know where to draw the line, but how about a way to think about it.  If you think about it, the borders are so hard to defend, the marginal value to a billion dollars on border defense ought to be zero.  So with a marginal value of zero you should be investing nothing in it.  But that can t be the right answer.</P> <P>If we go back to some of the ideas Mike and his colleagues and some of the related ones I tried to flesh out, you start defending really vulnerable sites, after a while you re defending lots and lots of sites.  You ve got to protect them all with whatever money you re going to divide between site defense or border defense.  At some point your billion dollars that you re devoting to border defense is now being spread over so many sites that making them less attractive, the marginal gain of that, becomes quite small.  It s a way to at least get a guide star to how you can think about the allocation problem.</P> <P>Question:  I m Jerry Zeranski [phonetic] from the Buffalo News and I want to follow up a little bit on what Mr. O Hanlon said with another question or two.  We haven t really discussed the whole issue of emergency response in great depth today.  There s been a lot of talk about interoperable communications and how agencies both in New York after 9/11 and in New Orleans after Katrina talked to each other.  I was wondering how all the panelists felt about where that issue should fall in the whole list of funding priorities and how much progress if any we ve made on that issue in the last five years.</P> <P>Clark Ervin:  I think that s a very important issue.  In fact that is the issue that I spend my time at the Aspen Institute working on.  I have a grant from the Ford Foundation to propose a solution to it.  People died on 9/11 because of the lack of interoperable communications.  People died in Katrina because of the lack of interoperable communications.  People will die the next time, God forbid there s a terrorist attack or a natural catastrophe of a Katrina dimension.  </P> <P>In the scheme of things, the problem is not an especially difficult one to solve.  It seems to me there should be a partnership between the federal government, between DHS, and state and local communities in providing the necessary funding to make communications interoperable.  One of the things I ve learned during the course of studying this issue is it s not just a question of the lack of interoperability.  In many cases, in many communities around the country including, as Mike says, the best-prepared community, New York it s also a problem to some degree of a lack of operable communications.  Much of the equipment first responders have throughout the country does not work to begin with, much less not being able to communicate with the gear of other communities.</P> <P>One other thing about emergency preparedness.  As you say, we have not really talked about that during the course of the morning.  But one thing I d say is I was very heartened by Secretary Chertoff s announcement a year or so ago of a second-stage review.  It was exactly the right thing at that time to take another look at the Department and to make tweaks to make the Department more effective.  There are a number of steps though that he took that were steps in the wrong direction.  One such step was separating the preparedness function in FEMA from the response function.  Now essentially FEMA is focused just on response and not on preparedness. </P> <P>I ve said before that I don t know how as a metaphysical matter one could separate preparedness from response, even if it were a good idea in theory.  But whether it s a good idea in theory or not and whether it can be done or not in theory, doing it makes absolutely no sense when the two are so closely linked to each other.  So one of the tweaks that I hope going forward is made is bringing preparedness and response back together.  </P> <P>Again, as I ve said, the strategy upon which the Department was based makes a lot of sense.  Part of that strategy was putting those two things together and so I hope that decision is reversed.</P> <P>Michael O Hanlon:  While I agree with this point, I also would submit that if you have a certain amount of money to spend on a given police force and a given city, you could either spend some of the money on chemical gear and response capability or you could spend it on creating a cell of 50 or 100 police officers who then start going to the mosquito-spraying conventions to see which guys are there who don t belong there and probably don t really want mosquito sprayers to spray pesticide, or if they do they re going to spray it in the wrong place and the wrong dosage.  That s one way you can use the police capability.  Another way is to send those same 100 guys out for training, pretending they re cleaning up a chemical spill.  Those are two very different things and different ways to use people.</P> <P>So in that sense the intelligence and the response are quite different at the local level.  While we obviously need some of both, I would lean more towards the intelligence side, as I said.</P> <P>One other point I want to make, just a very specific point, and I owe this to LA City Councilmember Jack Weiss, who s introduced this idea out there, which is the idea of mobile interoperable headquarters.  In other words, it doesn t make a lot of sense to have every single police, fire, first responder individual in a given region able to talk to each other.  In fact, you probably wouldn t want them all trying to talk to each other simultaneously.  But what you do need is the ability for them to be able to channel their communications through a localized headquarters that can go to the site of a problem.  </P> <P>This is the sort of thing that can be done reasonably quickly.  In some cases it has been done, but not by enough municipalities.  Some places with big areas and traffic jams may want to do it with helicopter-borne interoperable headquarters.  Other places may want to, if they re out in the Bayou or different places in the country, large rural areas may have to do it also with airborne capacity.  Other places may want to focus more on mobile vans or have a mix.</P> <P>But I think this is the right way to think about the interoperability problem, in a technical sense, as opposed to every single radio being standardized across all first responder communities.</P> <P>Question:  Heather MacDonald of the Manhattan Institute.  Does anybody have a sense of the quality of the intelligence that we re using in making these decisions?  Is it substantive, is it meaty?  Does it have anything to it?  I fear we re running the risk of terror porn.  I ve heard many industries over the last five years fingered as potential terror targets.  We ve had the milk industry, the food industry, the chemical industry, various sites.  But is any of that thinking or that speculation actually infused by knowledge about what the terrorists are actually thinking about?  This has come up often in this discussion, that the critical need now is for knowledge to reduce the possibility that just possibly we are overestimating the capacity of the enemy.  We are assuming limitless ability and also imagination that in fact doesn t exist.  Does anybody know, what does it look like?  Does DHS actually have good intelligence about what terrorists are thinking about?</P> <P>Clark Ervin:  I think that s an excellent question and a perfect one to end with.  As we ve all said to one degree or another, intelligence really is the linchpin of everything at the Department.  Intelligence has been a particular failure, a conspicuous failure, at the Department of Homeland Security.  I don t, by the way, agree with the premise that we are overestimating the threat.  I think we re underestimating the threat.  I think that s the big divide between experts on homeland security. </P> <P>That said, your larger point is spot-on.  If anyone bothers to read the Homeland Security Act, it is clear that the framers intended for the Department s information analysis unit its intelligence apparatus to perform two critical intelligence functions.  One, to take the lead on consolidating the then dozen different terrorist watch lists that various agencies maintained, which itself was a pre-9/11 problem.  Two, serving as the central clearinghouse throughout government, throughout the course of the entire intelligence community, as to threats against the homeland.  The former task was given, as we all know, months after the creation of the Department of Homeland Security, for whatever reason, to the FBI-led Terrorist Screening Center, and the latter task was given, months after the creation of the Department, to the CIA-led Terrorist Threat Integration Center and now the National Counterterrorism Center.</P> <P>So the upshot, as was pointed out by the Silverman-Robb Commission, in only three or four pages that touched on the Department of Homeland Security, that the department nominally charged with possessing intelligence sufficient, God willing, to prevent the next attack is probably the agency least likely to know about the next attack.</P> <P>The final thing I ll say is that when I was the inspector general at DHS for a couple years, I read the intelligence traffic that the Department of Homeland Security was submitting to the president and the rest of the government.  I can tell you without violating any confidences of course that the quality of that intelligence was sub-par and was much less good, and sometimes ludicrous, compared to the intelligence that the CIA and the FBI was providing.  Really the only intelligence-related function that the Department performs now is serving as a funnel for whatever intelligence the FBI and the CIA principally choose to share with the Department of Homeland Security, to state and local officials and to the private sector.  Recent examples can be cited to show that even that task is poorly performed by the Department now.</P> <P>Michael O Hanlon:  I agree, it s a great question.  I think we do know a bit.  We do know that since we re good in this country for preparing for the last attack, there s a serendipity here, because they like to go back and redo the last attack.  And we should assume they ll keep trying.  They like to attack trains, they like to attack airplanes, they like to attack big buildings and well-known buildings.  So that provides a bit of a benchmark.  We also know that in Afghanistan we found interest in chemical capabilities.  To what extent they could ever pursue and realize that capability remains debatable, as you well know, but that s a data point.</P> <P>I think we also have to, in the words of the 9/11 Commission, maintain a bit of imagination, in the sense that while we don t want to overestimate them, we do have to assume they are strategic, they are adaptive.  They have a harder time being adaptive and strategic now because they re on the run and mostly operating as a diaspora of individual cells again, as you well know.  But I think we have to assume that if they can figure out a way to hit us really hard, in a place or type of facility we ve left totally unprotected, at some point they might figure it out.  In other words, don t repeat the mistake of the 1990s, seeing data about people taking flight lessons and saying, what could that possibly be?  And not having a system set up to take those observations of what was going on and get it to the top people and debate it.</P> <P>We ve got to next time get them before they figure out the next kind of attack rather than wait for their action to be proof of what we have to consider a vulnerability.</P> <P>Gary Schmitt:  Having spent a good decade of my life overseeing intelligence and presumably not helping a bit, I d say waiting for good intelligence is like waiting for hell to freeze over.  The problem policymakers always are going to confront, and I don t see us escaping this dilemma, is developing good policies, sound policies, in the absence of intelligence.  That s the issue, I think.</P> <P>This has been a remarkable panel and I want to thank Clark, Mike and Bob for their presentations.  They were all succinct and very insightful.  I want to thank you for the questions because they were equally good.  Thank you.</P> <P>[End of panel]</P> <P>[End of transcript]</P> <P> </P> <P><BR> </P></body></html>