The president later issued a formal directive on counterterrorism policy, Presidential Decision Directive 39, signed in June 1995. That directive characterized terrorism as a national security concern as well as a matter for law enforcement.

These efforts were to be coordinated by a subordinate NSC committee called the CSG. During the Clinton administration, these initials stood for Counterterrorism and Security Group. This committee was chaired by an NSC staff member, Richard Clarke. The CSG was the place where domestic security agencies such as the FBI regularly met alongside representatives from the traditional national security agencies.

Since 1989, each administration has organized this top NSC advisory bodies in three layers. At the top is the National Security Council, the formal statutory body whose meetings are chaired by the president.

Beneath it is the principals committee, with Cabinet-level representatives from the agencies. The principals committee is usually chaired by the national security adviser.

The third layer is the deputies committee, where the deputy agency heads meet under the chairmanship of the deputy national security adviser.

Lower ranking officials meet in many other working groups or coordinating committees reporting to the deputies and, through them, to the principals. The CSG was one of those committees.

MARCUS: This ordinary committee system is often adjusted in a crisis. Because of the sensitivity of the intelligence and military options being considered, President Clinton created a small group in which a select set of principals frequently met without aides to discuss Khobar Towers or Osama bin Laden.

The participants would usually be many of the people who have appeared at these hearings yesterday and today: National Security Adviser Berger, DCI Tenet, Secretary of State Albright, Secretary of Defense Cohen, Hugh Shelton, the chairman of the Joint Chiefs of Staff, Deputy National Security Adviser James Steinberg, the White House chief of staff, John Podesta, Richard Clarke and Vice President Gore's national security adviser, Leon Fuerth. Attorney General Reno and FBI Director Freeh would also sometimes participate.

National Security Adviser Berger told us that he designed the small group process to keep highly sensitive information closely held. There were few paper records.

One trade-off of such a system was that other senior officials in agencies around the government sometimes had little knowledge about what was being decided in the small group, other than what they could obtain from the principals or from Clarke. This sometimes led to misunderstandings and friction.

President Directive 62 and the National Coordinator: In early 1998, the Clinton administration prepared a new presidential directive on counterterrorism. Its goals were to strengthen the lead agency approach in 10 program areas, to reemphasize the importance President Clinton attacked to unconventional threats at home and abroad, and to strengthen interagency coordination.

The draft directive would strengthen Clarke's role by creating the position of a national coordinator for counterterrorism who would be a full member of the principals committee or deputies committee for meetings on these topics.

As it evolved in the Clinton administration, the CSG effectively reported directly to principals and with the principals often meeting only in this restricted small group.

This process could be very effective in overseeing fast- developing but sensitive operations, in moving issues quickly to the highest levels, and in keeping secrets.

However, since the deputies and other sub-Cabinet officials were not members of the CSG, this process created a challenge for integrating counterterrorism issues into the broader agenda of these agencies and the U.S. government.

Clarke was a controversial figure. A career civil servant, he drew wide praise as someone who called early and consistent attention to the seriousness of the terrorism danger. A skilled operator of the levers of government, he energetically worked the system to address vulnerabilities and combat terrorists.

Some colleagues have described his working style as abrasive, and some officials told us that Clarke sometimes misled them about presidential decisions or interfered in their chain of command.

National Security Adviser Berger told us that several of his colleagues had wanted Clarke fired. But Berger's net assessment was that Clarke fulfilled an important role in pushing the interagency process to fight bin Laden. As Berger it, quote, "I wanted a piledriver," close quote.

[...]

The millennium alerts -- As 1999 drew to a close, Jordanian intelligence discovered an Al Qaida-connected plot to attack tourists gathered in Jordan for millennium events. Intelligence revealed links to suspected terrorists who might be in the United States. Meanwhile, a customs agent caught Ahmed Ressam, an Algerian jihadist trying to cross with explosives from Canada into the United States. Both staff and principals at the NSC were seized with this threat.

The CSG met constantly, frequently getting the assistance of principals to spur particular actions. These actions included pressuring Pakistan to turn over particular suspects and issuing an extraordinary number of domestic surveillance warrants for investigations in the United States.

MARCUS: Berger said that the principals convened on a nearly daily basis in the White House Situation Room for almost a month. The principals communicated their own sense of urgency throughout their agencies.

By all accounts the millennium period was also a high point in the troubled relationship between the White House and the FBI.

Before 9/11, the FBI did not ordinarily produce intelligence reports. Records of the FBI's intelligence work usually consisted only of reports of interviews with witnesses or memoranda requesting initiation or expansion of an investigation.

The senior FBI headquarters official for counterterrorism, Dale Watson, was a member of the CSG, and Clarke had good relations with him and with FBI agents handling Al Qaida-related investigations. But the NSC staff told us that the FBI rarely shared information about its domestic investigations. The millennium-alert period was an exception.

After the millennium surge subsided, Berger and his deputy, James Steinberg (ph), complained that despite regular meetings with Attorney General Reno and FBI Director Freeh, the FBI withheld terrorism data on grounds that it was inappropriate to share information relating to pending investigations being presented to a grand jury.

In a January 2000 note to Berger, Clarke reported that the CSG drew two main conclusions from the millennium crisis: First, it concluded that U.S.-led disruption efforts, quote, "have not put too much of a dent," closed quote, into bin Laden's network abroad. Second, it feared that sleeper cells or other links to foreign terrorist groups had taken root in the United States.

Berger then led a formal millennium-after-action review of next steps culminating in a meeting of the full principals committee on March 10th.

The principals committee endorsed a four-part agenda to strengthen the U.S. government's counterterrorism efforts:

First, increase disruption efforts; second, strengthen enforcement of laws restricting the activity of foreign terrorist organizations in the United States; three, do a better job of preventing foreign terrorists from entering the United States; fourth, improve the security of the U.S.-Canadian border.

Overall, U.S. government spending connected to counterterrorism grew rapidly during the late 1990s. Congress appropriated billions of additional dollars in supplemental appropriations for improvements like building more secure embassies, managing the consequences of a WMD attack and protecting military forces.

Clarke and others remained frustrated, however, at the CIA spending on counterterrorism. They complained that baseline spending at headquarters on bin Laden efforts or on operational efforts overseas remained nearly level.

The CIA funded an expanded level of activity on a temporary basis with supplemental appropriations, but baseline spending requests and thus core staffing remained flat.

MARCUS: The CIA, on the other hand, told us that Clarke kept promising more budget support but could never deliver it. The Clinton administration began proposing significant increases in the overall national intelligence budget in January 2000 for fiscal year 2001.

Until that time at least, CIA officials have told us that their main effort had been to rebuild the agency's operating capabilities after what they said had been years of cuts and retrenchment. They believed counterterrorism efforts were relatively well-off compared with needs elsewhere.

The daily FBI reports to the CSG during the millenium plots were a good thing; their cessation was a bad thing.

The principal's meetings were a good thing; their cessation was a bad thing.

The increases in money allegedly budgeted under Clinton to "counter-terrorism" didn't include significant money for actual intelligence and true counter-terrorism. Better architechure is not actually "countering" terrorism.

[...]

As the Clinton administration drew to a close, the NSC counterterrorism staff developed another strategy paper; the first such comprehensive effort since the Delenda plan of 1998.

The resulting paper, titled "A Strategy for Eliminating the Threat from the Jihadist Networks of Al Qaida; Status and Prospects," reviewed the threat, the records to date, incorporated the CIA's new ideas from the Blue Sky memo, and posed several near-term policy choices. The goal was to roll back Al Qaida over a period of three to five years, reducing it eventually to a rump group like others formerly feared but now largely defunct terrorist organizations in the 1980s.

Quote, "Continued anti-Al Qaida operations at the current level will prevent some attacks, but will not seriously attrite their ability to plan and conduct attacks," Clarke and his staff wrote.

[...]

Rice and Hadley decided that Clarke's CSG should report to the deputies committee chaired by Hadley, rather than bringing its issues directly to principals. Clarke would still attend principals committee meetings on terrorism but without the central role that he had played in the Clinton-era small group.

Hadley told us that subordinating the CSG to the deputies would help resolve counterterrorism issues in a broader context. Clarke protested the change, arguing that it would slow decision-making. He told us that he considered this move a demotion to being a staffer rather than being a de facto principal on terrorism. On operational matters, however, Clarke could and did go directly to Rice.

Clarke and his staff said that the new team, having been out of government for at least eight years, had a learning curve to understand Al Qaida and the new transnational terrorist threat.

[...]

Although Clarke briefed President Bush on cybersecurity issues before September 11th, Clarke never briefed or met with President Bush on counterterrorism, which was a significant contrast from the relationship he had enjoyed with President Clinton. Rice pointed out to us that President Bush received his counterterrorism briefings directly from Director Tenet who began personally providing intelligence updates at the White House each morning.

Asked by Hadley to offer major initiatives, on January 25th, 2001, Clarke forwarded his December 2000 strategy paper and a copy of his 1998 Delenda plan to the new national security adviser, Condoleezza Rice. Clarke laid out a proposed agenda for urgent action by the new administration: approval of covert assistance to the Northern Alliance, significantly increased funding, choosing a standard of evidence for attributing responsibility for the Cole and deciding on a response, going forward with new Predator missions in the spring and preparation of an armed version, and more work on terrorist fund-raising.

[...]

Clarke asked on several occasions for early principals meetings on these issues, and was frustrated that no early meeting was scheduled.

No principals committee meetings on Al Qaida were held until September 4th, 2001. Rice and Hadley said this was because the deputies committee needed to work through many issues relating to the new policy on Al Qaida.

The principals committee did meet frequently before September 11th on other subjects, Rice told us, including Russia, the Persian Gulf and the Middle East peace process.

The other key point:

Clarke and other perceived the process as slow, and Clarke argued that the policy on Afghanistan and Pakistan did not need to be settled before moving ahead against Al Qaida.

[...]

MARCUS: Within the NSC staff, Clarke was asked to put together a broad policy to eliminate Al Qaida to be codified in the presidential directive.

Clarke and his staff regarded the new approach as essentially similar to the proposal they had developed in December 2000 and put forward to the new administration in January 2001. Clarke's staff produced a draft presidential directive on Al Qaida, Hadley circulated it to his counterparts in early June as, quote, "an admittedly ambitious program." The draft had the goal of eliminating the Al Qaida network as a threat over a multiyear period. It had headings such as "No Sanctuaries" and "No Financial Support."

From April through July alarming threat reports were pouring in. Clarke and the CSG were consumed with coordinating defensive reactions. In late June Clarke wrote Rice that the threat reporting had reached a crescendo.

On July 2nd, the FBI issued a national threat advisory. Rice recalls asking Clarke on July 5th to bring additional law enforcement in domestic agencies into the CSG threat discussions, and that was done.

[...]

Neither the White House nor the CSG received specific credible information about any threat of attacks in the United States. Neither Clarke nor the CSG were informed, however, about the August 2001 investigations that produced the discovery of suspected Al Qaida operatives in the United States, nor did the group learn about the arrest or FBI investigation of Zacarias Moussaoui in Minnesota.

At the beginning of August, Rice and Hadley again reviewed the draft presidential directive on Al Qaida. Rice commented it was very good and principals needed to discuss it briefly before it was submitted to President Bush. This meeting was scheduled for September 4.

Clinton National Security Advisor Sandy Berger began his testimony.

The following point is in the public record, but it's worth emphasising:

BEN-VENISTE: Moreover, we have received information that suggests, ironically, on September 10th, 2001, Attorney General Ashcroft axed $58 million from the FBI's counterterrorism budget. During your tenure, did you understand there to have been any specific requests for counterterrorism funding that was denied?

BERGER: I believe that during our period funding for counterterrorism at the FBI went up 350 percent. I believe actually that Director Freeh used that number in his press conference when he left office in July of '01.

LEHMAN: I've got one quick question just to follow up, really.

Have you read this book "Ghost Wars"?

BERGER: No. I just read the two excerpts, Governor, from The Washington Post.

LEHMAN: Yes. It's a good book. I mean, it confirms a lot of what we're finding out in this investigation. I'd recommend it.

But one of the things that it does detail similar to our findings is that there was a real disconnect between what you all believed was the policy in Washington from what was going on in Afghanistan, including the famous comment by Masood, when he was read an order on a legal opinion as to what could be done and couldn't be done with bin Laden.

And I guess my question is it seems a fact to me anyway, from the book and from our research, that there was this disconnect. You were meeting every day. I mean, you were meeting every week anyway, your principals and everything else. You had a clear understanding of what was going on. How could this occur? How could the...

BERGER: Perhaps that's a question you should ask the director of central intelligence because he -- there was no communication. -- or Cofer Black, who was in the White House twice a week and never took me aside and said, "Sandy, we got a real problem in the field because the instructions are confusing," or, "We've got a lot more capacity to act than you've given to us." Never. Never.

LEHMAN: Though somewhere, though, there was disconnect. It obviously affected policy.

I'm not quoting, because it would be repetitive, any of Senator Kerrey's going hammer-and-tongs after Advisor Berger, no less than he later did after Advisor Rice and others from both Administrations, but it's in the record if you wish to check it.

I'll continue in part IX with Richard Clarke's testimony, if there's anything new left to be noted or observed.