Freeh's Reign

Washington had rarely seen such urgency and bipartisan
resolve. On a warm September day, the president and his handpicked Federal Bureau
of Investigation director laid out a new vision for what Vermont Senator Patrick
Leahy has called the "crown jewel" of law enforcement agencies. "Today's FBI,"
the president said, "operates in a new and challenging world. Terrorism once
seemed far from our shores, an atrocity visited on people in other lands. Now,
after the attack on the World Trade Center, we know that we, too, are
vulnerable."

Even in the face of uncertain times and untested missions, the new director
expressed stout confidence. "We must do now and here what the people of America
have always done in terms of crisis--take control of our own destiny and use our
enormous resources, ingenuity and will to establish the domestic tranquility and
justice envisioned in the Constitution of the United States."

The year was 1993. The president, of course, was Bill Clinton. And the
iron-spined G-man selected to lead the bureau through troubled and transitional
times was Louis Freeh.

At the time, Freeh seemed like an inspired choice. Following William Sessions,
whom Clinton had fired in large part because of his personal use of FBI
resources, Freeh seemed straighter than a shotgun barrel. A former FBI agent,
federal prosecutor, and judge celebrated for his investigations into organized
crime and drug trafficking, Freeh knew the bureau inside and out. Even the GOP,
mindful of Freeh's appointment to the federal bench by President George H.W.
Bush, couldn't muster a word of dissent. He was, Clinton said at the time, "the
best possible person to head the FBI as it faces new challenges and a new
century."

Eight years later, the new challenges of the new century are as
unambiguous as the billion tons of rubble still smoking in lower Manhattan. Under
Freeh's successor, Robert S. Mueller III, the FBI is leading the investigation
into the September 11 attacks and whatever may remain of the terrorist network on
American soil. Mueller and Attorney General John Ashcroft have plans to turn the
FBI into a mean, if not so lean, terror-fighting machine. But 27,000-person
bureaucracies cannot transform themselves overnight. For the time being, it is
still Louis Freeh's FBI.

There's reason to believe that the FBI may not yet be up to the job now
being asked of it. Whether or not the bureau could have prevented the attacks
from taking place is unanswerable. What is certain, though, is that Freeh's
management of the FBI failed to move it to where he--and many others in
1993--acknowledged it needed to go. How he fell short, and why no one held him
accountable, is an object lesson in the importance of focused management, the
complexities of counterterrorism, and the need for balanced FBI oversight.

Micro-mismanagement

Contrary to the conventional wisdom, the FBI was not asleep
to the possibility of another terrorist attack. During the eight years that he
was director, Freeh would tell anyone who would listen of the imminent terrorist
threat, especially if that person sat on a congressional appropriations
committee. "In the aftermath of the World Trade Center bombing," Freeh testified
in 1994, "the U.S. must maintain credible defenses and constant vigilance against
those groups who would terrorize the citizenry of this country." The call to
vigilance would become part of the FBI congressional liturgy, repeated year after
year. Because Freeh was a master at maneuvering amid the politics of Capitol
Hill, Congress always answered, "Amen." From 1994 to 2001, legislators increased
the FBI's counterterrorism budget from $79 million to $372 million--a whopping
471 percent.

Freeh's expansion of the bureau's role in counterterrorism extended beyond
its budget. A series of presidential declarations and antiterrorism bills
broadened the FBI's role as the lead agency in the prevention, crisis management,
and investigation of any domestic terrorist attack. Freeh took the FBI overseas,
creating legal-attaché offices in 44 countries around the world. The
offices channel intelligence back to FBI analysts and maintain relationships with
foreign law-enforcement agencies. Even Freeh's critics agree that the overseas
expansion helps the bureau keep step with the globalized realities of crime and
terrorism.

But back in Washington, Freeh appeared more interested in
building the FBI's empire than in making sure that it ran effectively. Freeh's
previous jobs--agent, prosecutor, and judge--rewarded individual brilliance
rather than managerial competence, and, as director, he continued in the same
vein. Instead of providing steady leadership across the bureau, Freeh often got
intensely involved in individual cases or projects. Chafing at the
micromanagement, many FBI agents dubbed Freeh "the bureau's only presidentially
appointed street agent."

Still more damaging, Freeh never surrounded himself with people who could
compensate for his shortcomings. Instead, he chose agents with whom he had grown
comfortable over the years, even if he had to bend the rules to do it. For
instance, Freeh loosened the bureau's rules on previous drug abuse in order to
hire three former colleagues from his prosecutor days.

Linguini v. Quiche

Mismanagement fell heaviest on the bureau's counterterrorism
operations. Freeh made his name, as most FBI legends do, fighting drugs and the
Mob, and in those arenas he was as good as they come. But fighting the Mob and
fighting foreign terrorists are very different things. The techniques of a
criminal investigation are familiar to just about anyone who has gone to the
movies in the past 30 years: surveillance, wiretapping, interrogating, and, if
lucky, door kicking. An effective counterintelligence and counterterrorism
office, by contrast, can look a lot like the reading room at the New York Public
Library. It's about research, record keeping, and analysis. A surveillance can go
on for years and never lead to an arrest--and that's not necessarily a bad thing,
so long as an agent continues to get good information that can prevent larger
crimes. But because criminal investigators have the power of statistics on their
side--number of arrests, amount of property seized--they tended to be promoted
through the ranks faster than the counterintelligence agents. "When you have an
opening and a counterintelligence agent comes before a promotion board with 400
surveillances and no arrests, these old crime guys with their cigars, the guys
who used to be cops, would say, 'What?'" recalls John Lewis, former assistant
director in charge of national security for the FBI. "The crime guys used to
refer to foreign-counterintelligence and counterterrorism guys as 'fern-loving,
quiche-eating, chardonnay drinkers. The criminal-division guys were the
'red-orchid-loving, linguini-eating, Chianti drinkers.'"

Freeh was a linguini man through and through, and it showed in his approach
to counterterrorism. In 1996 the Brown-Aspin Commission held a summit to discuss
the roles and capabilities of America's intelligence community. Former FBI agent
I.C. Smith, who had worked on both criminal and intelligence over his 30-year
career, was on the team to help prepare Freeh for the meeting. "We had done a
great deal of work preparing talking points about the FBI's role as the lead
counterintelligence agency," he relates. "And Freeh basically ignored everything.
He launched into a discussion of cop-to-cop relations overseas. I was watching
people on the panel," Smith goes on. "They didn't want to hear about cop-to-cop
relationships. They wanted to hear about what the FBI was going to do as the lead
intelligence agency.... It was clear the FBI had no interest in being a player in
the [intelligence] community."

The people Freeh chose to lead the counterterrorism division shared the same
biases. Of the three assistant directors in charge of national security to serve
under Freeh, only one, John Lewis, who served for only a year and a half, had
firsthand experience working intelligence cases. The same dearth of experience
predominated among the top executives in the counterterrorism division. As a
result, they seemed to lack an understanding of the delicacy of international
investigations. One counterterrorism official, John O'Neill, who died in the
September 11 tragedy just as he was beginning his job as director of security at
the World Trade Center, was so aggressive in his investigation of the USS
Cole bombing in Yemen that the U.S. ambassador there barred him from the
country.

Without experience in intelligence, many of Freeh's executives never seemed to
understand its value. "The attitude was, 'They aren't making arrests, so why are
they here?'" says Smith. So intelligence resources were regularly "reprogrammed"
over to the criminal-investigative side. In 1995, for instance, half of the $5
million for intelligence analysts was shifted to a computer crime center. A
laboratory built with counterterrorism funds was used, in part, to bolster the
bureau's standard forensics operation. And many of the 1,000 agents that the FBI
was able to hire thanks to $83 million in new counterterrorism funds were instead
used as regular street agents.

To be fair, it can be difficult for an FBI supervisor to justify keeping his
agents on the business of preventing a threat that may never materialize while
the in-boxes of criminal investigators accumulate more and more case files. But
the ability to focus on the big threat down the road, as opposed to the little
nuisances nipping at one's knees, is precisely what separates good leaders from
bad ones. In seeking the funds in the first place, Freeh's expressed reasoning
was, in fact, that it would "double the 'shoe-leather' for counterterrorism
investigations so that we can address emerging domestic and international
terrorist groups." It never quite worked out that way.

The bureau's counterterrorism and intelligence operations suffered
from subtler shifts as well. Intelligence analysts were often removed from their
counterterrorism responsibilities and used instead for criminal investigation or,
even worse, as secretaries. "They were paid as intelligence analysts," Smith
says, "but many times their actual function was more clerical in nature." At the
same time, the quality of analysis was hurt by a lowering of the standards
governing who could become an analyst. The analyst positions became "a reward
system for people's secretaries," says Robert Heibel, former FBI intelligence
analyst and director of the Research/Intelligence Analyst Program at Mercyhurst
College in Erie, Pennsylvania. "If you did a good job and you had typing ability
and could communicate, you could get promoted to an intelligence analyst," he
asserts. "The system became bastardized."

Meanwhile, the bureau brought over from the criminal side its bias against
working closely with local law enforcement. Freeh, to his credit, did address FBI
coordination with local officials by creating "joint terrorism task forces" that
bring together the FBI, state and local police, and federal and local
prosecutors. Institutionally, however, there were clues to suggest that the FBI
hadn't completely changed its spots. In 1994 the FBI participated in a joint
terrorism exercise with the Departments of Defense and Energy that was designed
to assess how well the agencies were prepared to coordinate a response to a
possible nuclear incident. Nearly 1,000 federal personnel and private contractors
showed up, but not one of them was from local government. Responding to a
disbelieving Senate Permanent Subcommittee on Investigations, John Sopko, the
deputy chief counsel to the minority at the time, testified that "there was an
apparent belief by the FBI that tactical and technical operations to deal with
the incident could be performed in relative isolation from local officials." The
Department of Energy's report on the exercise claimed that the FBI worked "in
imperial fashion." Four years later, the FBI worked together with the Department
of Justice to prepare a five-year counterterrorism plan intended to be the
all encompassing national counterterrorism strategy. The report was comprehensive
with one notable exception: It identified no role whatsoever for state and local
governments.

Mismanagement was not limited to the counterterrorism division. Freeh's
penchant for crony over quality led to his hiring of Larry Potts as deputy
director, despite Potts's censure for his leadership role in the disastrous Ruby
Ridge shootout. Potts later was suspended after it was determined that he had
participated in a cover-up of his wrongdoing. And Freeh's cutbacks in
headquarters staff and lack of managerial oversight resulted in the introduction
of an expensive but failed computer system (which led to the mishandling of the
Timothy McVeigh files) as well as a debilitating one-year backup at the FBI's
once-vaunted crime lab (a delay that led to the mishandling of up to 50 cases).

A Political Operative

But what Freeh lacked in managerial genius, he more than
made up for in political and public-relations acumen. In a breathtaking display
of political agility, Freeh skated over the cracking ice beneath him, away from
the Clinton administration and into the warm and welcoming arms of congressional
Republicans.

Freeh's relations with congressional Republicans were hard won because, for
much of the first few years of his tenure, his standing was diminished by various
bureau mistakes. In the summer of 1996, it was discovered that the FBI had
provided the White House Director of Personnel Security Craig Livingstone with
the files of 400 Republicans. The Clinton administration at the time said it was
nothing more than a bureaucratic snafu. Four years later, a three-judge
investigative panel agreed with that assessment. Freeh, however, didn't take any
chances. "The prior system of providing files to the White House relied on good
faith and honor," he said. "Unfortunately, the FBI and I were victimized."

At first, congressional Republicans didn't buy the image of the FBI as
political naïf. The scandal hit at a time when Freeh was seeking expanded
wiretap powers (many of which were finally granted by the USA Patriot Act of
2001). With "Filegate" in the air, Newt Gingrich said that "it's very hard to
justify giving that agency more power." In October and again in December, Freeh
was called to the Hill to undergo a public grilling at the hands of Senate
Republicans on both the Ruby Ridge cover-up and the Richard Jewell
Olympics-bombing case. Criticism had grown so intense by the fall that Freeh
wrote a memo to FBI personnel insisting that he had no intention of resigning.

Since President Clinton was seen as politically incapable of replacing his
holier-than-he FBI director, Freeh's fate seemed to fall into the hands of
congressional Republicans who weren't sure what use they had for an FBI director
whose prosecutorial vigilance scared the hardest-core of the GOP's constituency.
They soon found out. In January 1997, the FBI discovered evidence suggesting that
China had sought political influence through illegal campaign contributions. A
new Clinton scandal was born, and Freeh used it to sever his cord to the White
House. The FBI leaked word of the investigation to The Washington Post.
They also briefed congressional Republicans. The White House had to learn about
it by reading the newspaper. When it was leaked that Freeh had written a pointed
memo to Attorney General Janet Reno objecting to her decision not to appoint yet
another independent counsel to investigate the matter, the battle lines were
quickly drawn--and few could help but notice on which side sat the "politically
independent" director of the FBI.

Freeh's fortunes changed almost overnight. On June 4, 1997, he testified
before the Senate Judiciary Committee on the issue of FBI oversight, ordinarily a
contentious issue between Congress and the bureau. Not on this day. There have
been serious problems within the FBI, Judiciary Committee Chairman Orrin Hatch of
Utah said, "but I would be remiss if I did not mention the positive leadership of
Director Louis Freeh." Pennsylvania Republican Arlen Specter went out of his way
to "compliment you on a job well done" and issued a rare invitation for a funding
request, reminding Freeh: "The war against terrorism is obviously at the top of
the agenda, and we have urged you in the past to let us know what additional
resources you need."

From that point on, Freeh and the FBI were virtually bulletproof. The bureau
seemed to reward its new friends on the right with briefings and other
information unavailable to the Democratic leadership. At times, this was done to
deflect criticism away from the FBI and toward Reno's Justice Department. During
the investigation of Wen Ho Lee, who was suspected of spying for the Chinese, the
FBI fed one-sided information to Specter that squarely placed the blame for the
botching of the Lee investigation on Justice. The report that Specter produced
turned out to be so dubiously slanted that not a single other member of the
Senate Judiciary Committee--not even South Carolina's Strom Thurmond--would sign
it. Meanwhile, Freeh was not subtle about where his political sentiments lay. "It
was useful," says one former Republican Senate Judiciary staffer, "to have
someone more to your way of thinking from a policy perspective than Reno's
Justice Department."

Suddenly, any concerns that Congress had about the bureau's counterterrorism
activities--or other aspects of the bureau's work--seemed to disappear. Concerns
over where the bureau's counterterrorism money was being spent, though raised by
the General Accounting Office, were met with complete silence on the Hill.
Indeed, in 1999, Freeh was completely forthcoming in admitting that the bureau's
intelligence analysis capabilities were "deficient." Congress didn't for a moment
question whether Freeh's leadership contributed to the deficiency. Instead, it
rewarded the FBI with still more funds to bolster its intelligence units.

The faults in Freeh's management and Congress's failure to
provide proper oversight are now playing out in the FBI's ever expanding
investigation into the September 11 attacks. How much further along the FBI could
be is impossible to know. But the scattershot nature of its investigation
certainly suggests that the bureau has little targeted intelligence on al-Qaeda's
reach in the United States. Moreover, the rush to lock up suspects before
intelligence on terrorist cells can be developed seems to indicate the
persistence of the cop mentality that prevailed under Freeh. Merely throwing more
criminal investigators at the problem won't be enough. The bureau needs to
address the lack of intelligence capability not merely by hiring new agents but
by making sure that they are trained in the finer points of intelligence and
ensuring that their supervisors understand it as well. Moreover, it needs to work
harder to break down its own cultural bias against local law enforcement. Freeh
himself identified that need at his swearing-in, saying that the FBI needed to
"share our toys." Director Mueller, who has echoed the sentiment, should back it
up with concrete action.

Mueller, for his part, has seemed willing to accept that with an increased
role will come increased oversight, both from the Justice Department and from
Congress. And the Senate seems willing to step up to the task. After the Senate
switched hands last summer, the new chairman of the Senate Judiciary Committee,
Patrick Leahy, almost immediately called hearings to look into the question of
FBI oversight--in order, he said, to "restore the luster, the effectiveness, and
the professionalism" of the FBI. If that is to happen, the Senate's vision of
oversight will have to extend beyond holding sharp hearings that say much and do
little.

The past three months have only increased the desire of Congress--and, indeed,
the nation--to make sure that the FBI lives up to its image as the crown jewel of
law enforcement. In a sense, though, this may be the very image that is holding
the bureau back. It is not a precious gem to be appreciated and admired from
afar. Rather, it's an industrial diamond--a tool--and more than ever we need to
know that it can do the job.

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