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United States General Accounting Office: 


Subcommittee on Commerce, Justice, State, and the Judiciary, Committee 
on Appropriations, House of Representatives. 

For Release on Delivery: 
Expected at 10:00 a.m., EDT: 
Friday, June 21, 2002: 

FBI Reorganization: 

Initial Steps Encouraging but Broad Transformation Needed: 

Statement of David M. Walker: 
Comptroller General of the United States: 

Mr. Chairman and Members of the Subcommittee: 

I appreciate the opportunity to discuss the Federal Bureau of
Investigation's proposed reorganization and realignment efforts. My 
testimony today will address five topics. First, it is very important 
to recognize that the FBI's reorganization efforts represent a subset 
of a larger need to fundamentally transform the federal government in 
light of recent trends and long-range fiscal challenges. This 
transformation should include a review, reassessment and 
reprioritization of what the government does, how it does business, 
and who does the government's business. Second, I will comment on 
major aspects of the FBI's approach to realign its resources, touching 
on both the promise of these efforts and the challenges yet to be 
faced. Third, I will surface other issues important to the success of 
the plan that are not specifically addressed in this phase of the 
FBI's reorganization. Fourth, as the FBI moves forward, I want to 
underscore the importance of adherence to some basic elements needed 
to ensure a successful transformation. Finally, I want to emphasize 
the importance of congressional oversight to the successful 
implementation of transformational changes like those planned by the 

To prepare this testimony, we reviewed (1) the reorganization and 
reprogramming documents submitted by the Department of Justice (DOJ) 
to this Subcommittee on May 29, 2002; (2) our prior work on 
organization transformation and on the FBI; (3) studies of 
counterterrorism and/or FBI operations conducted by various 
commissions, an advisory panel,[Footnote 1] DOJ's Office of Inspector 
General, and a management consultant;[Footnote 2] (4) strategic plans 
and other related documents developed by the Bureau and DOJ; and (5) 
pertinent press releases and congressional testimony by DOJ and FBI 
officials. We also interviewed selected current and former Justice and 
FBI officials concerning the reorganization and its context. We did 
our work between May 30, 2002 and June 20, 2002. 

Broader Transformation of Government Needed: 

As you know, our country's transition into the 21st Century is 
characterized by a number of key trends including global 
interdependence; diverse, diffuse, and asymmetrical security threats; 
rapidly evolving science and technologies; dramatic shifts in the age 
and composition of our population; important quality of life issues; 
and evolving government structures and concepts. Many of these trends 
are intertwined, and they call for a reexamination of the role of 
government in the 21st Century given changing public expectations. 
[Footnote 3] Leading public and private organizations here in the 
United States and abroad have found that for organizations to 
successfully transform themselves they must often change their 
culture. Leading organizations also understand that their people, 
processes, technologies, and environments are the key enablers that 
drive cultural change. For governmental entities, this evolution 
generally entails shifts away from: 

* process to results; 

* stovepipes to matrixes; 

* hierarchical to flatter and more horizontal structures; 

* an inward focus to an external (citizen, customer, and stakeholder) 

* management control to employee empowerment; 

* reactive behavior to proactive approaches; 

* avoiding new technologies to embracing and leveraging them; 

* hoarding knowledge to sharing knowledge; 

* avoiding risk to managing risk; and; 

* protecting turf to forming partnerships. 

While transformation across government is critically important to 
successful transition into the 21st century, it is of utmost 
importance at the FBI. This is the agency at the front line of 
defending the public and our way of life from a new and lethal threat, 
that of terrorism against Americans. At the same time the FBI 
maintains the responsibility for investigations of other serious 
federal crimes. Every American has a stake in assuring the success of 
the FBI's efforts. The FBI is a unique organization comprised of 
thousands of devoted and capable public servants who live and breathe 
the agency's motto of fidelity, bravery, and integrity everyday. The 
FBI has a long and proud history, and it does many things well. But, 
times have changed, and the FBI must change with the times in 
considering what it does and how it does business. At the same time, 
the motto itself is timeless in nature. Any changes at the FBI must be 
part of, and consistent with, broader governmentwide transformations 
that are taking place. This is especially true as the establishment of 
a Department of Homeland Security is debated and put into place.
Moreover, Director Mueller had noted that the FBI reorganization and 
realignment efforts that we are discussing today are just the second 
phase in a comprehensive effort that he is planning to address a broad 
range of management and organizational challenges. This is, in effect, 
a down payment on a huge undertaking. 

Director Mueller has taken the first and most important step in 
successfully undertaking the needed transformation at the FBI—he has 
demonstrated his personal commitment through his direct involvement in 
developing and leading the Bureau's transformation efforts. He has 
recognized a need to refocus priorities to meet the demands of a 
changing world and is now taking first steps to realign resources to 
achieve his objectives. His continued leadership, coupled with the 
involvement of other senior executives at the FBI, and clear lines of 
accountability for making needed improvements will be critical if the 
effort is to succeed. These factors are prerequisites to overcoming 
the natural resistance to change, marshaling the resources needed to 
improve the Bureau's effectiveness, and building and maintaining the 
FBI-wide commitment to new ways of doing business. The Director is 
early in his 10-year term. This should prove very helpful because the 
experiences of leading organizations suggest that given the enormous 
challenges the FBI faces, successfully completing needed cultural and 
other transformations may take up to 7 or more years. At the same 
time, some steps are critical and time sensitive. As a result, the FBI 
needs to develop a comprehensive transformation plan with key 
milestones and assessment points to guide its overall transformation 

Major Aspects of the FBI’s Realignment Efforts: 

FBI Director Mueller unveiled the second phase of the reorganization 
at a news conference on May 29 and discussed it further at a hearing 
before the Senate Judiciary Committee on June 6, 2002. These proposed 
changes are designed to build on the initial reorganization actions 
Director Mueller took in December 2001. These earlier actions were to 
strengthen the FBI's top-level management structure, enhance 
accountability, reduce executive span of control, and establish two 
new divisions for Records Management and Security. The central thrust 
of this next phase of the reorganization plan is to build an FBI with 
a national terrorism response capability that is larger and more 
mobile, agile, and flexible. The key elements of this second 
installment of the reorganization include a shifting of some resources 
from long-standing areas of focus, such as drugs, to counterterrorism 
and intelligence; building analytic capacity; and recruiting to 
address selected skill gaps. 

In light of the events of September 11, 2001, this shift is clearly 
not unexpected and is, in fact, consistent with FBI's 1998 Strategic 
Plan as well as the current Department of Justice Strategic Plan. 
Since September 11, unprecedented levels of FBI resources have been 
devoted to counterterrorism and intelligence initiatives with 
widespread public approval. Indeed, the goals of this phase of the 
reorganization plan are not highly controversial. Enhancement of 
resources for counterterrorism, greater sharing of information with 
the Central Intelligence Agency (CIA) and others, improvements in 
analytic capacity, establishment of a centralized intelligence unit to 
make sense out of the gathered information, more training, and 
recruitment of specialists all seem to be rational steps to building 
agency capacity to fight terrorism. However, some specific aspects of 
the plan should be highlighted. 

Realigning Staff: 

A key element of the reorganization is to "redirect FBI's agent 
workforce to ensure that all available energies and resources are 
focused on the highest priority threat to the nation, i.e. terrorism." 
This shift is intended to move the FBI from a reactive mode of 
operation to a more proactive orientation. The primary goal is to 
prevent terrorism rather than investigate and apprehend after an event 
occurs. The FBI has been involved in proactive counterterrorism work 
for some time. This reorganization is intended to make a greater 

In accordance with the goal, some agents from drug, white collar, and 
violent crime investigative work will shift their focus to 
counterterrorism. Specifically, the plan calls for 518 agents to be 
shifted-400 agents from drug work and 59 each from white collar and 
violent crime to be reassigned to work on counterterrorism, security 
improvements, and training. Of the 518 agents being shifted, 480 will 
be permanently reassigned to counterterrorism work. In the case of 
drug enforcement, this shift moves about 30 percent of the staff 
currently assigned to this activity to counterterrorism work. For 
white collar and violent crime the shift is not as substantial 
representing about 2.5 percent and 3 percent of their staff years, 
respectively. Given the massive move of resources to counterterrorism 
following the events of September 11, this really represents fewer 
agents returning to their more traditional crime investigative work as 
opposed to agents moving away from current drug, white collar, and 
violent crime work. According to FBI data, the number of field agents 
assigned to terrorism work jumped from 1,057 before September 11 to 
6,390 immediately following the tragic events of that day. 

FBI data show that a shift of 518 agents from drugs, white collar 
crime, and violent crime seems to do little to change the picture of 
the overall deployment of FBI special agent resources. 
Counterterrorism agent resources go from about 15 percent of total 
agent resources, to just under 20 percent. Thus, it seems that despite 
a change in priorities, most of the FBI resources will remain devoted 
to doing the same types of work they have been doing in the past. This 
realignment actually affects about five percent of the total FBI 
special agent workforce, and, therefore, represents a relatively 
modest change in the focus of the Bureau as a whole at least for the 
present time. 

Is this the right amount of resources to shift to counterterrorism at 
this time? Is this too much? Perhaps the more salient question is, is 
this too little? It is probably unrealistic to ask the FBI or anyone 
else for the answer to this question at this time, given that the 
government's information about the nature and extent of the terrorist 
threat is still evolving. However, this is a question that must be 
answered in due course based on a comprehensive threat assessment and 
analysis, including the role the FBI and other government agencies 
should play in our future counterterrorism efforts. 

According to the FBI, the Special Agents in Charge (SACs) of the 56 
field offices were asked to indicate how many agents could be 
redirected into terrorism work in their locations without unduly 
jeopardizing other investigative work. In fact, SACs generally 
volunteered more agents to shift to counterterrorism work than were 
actually shifted. According to the FBI, SACs were given general 
guidance but not specific guidelines or other directives upon which to 
base their decisions concerning reallocation of resources. Thus, for 
good or ill, field offices may have used different criteria for 
determining how many resources could be reallocated. FBI headquarters 
made final reallocation decisions based on resource needs requested by 
the Executive Assistant Director for Counterterrorism/ 
Counterintelligence. Careful monitoring will be needed to ensure that 
the agents to be devoted to counterterrorism can be appropriately 
utilized and to what extent additional resources will be needed. 

Conversely, the impact of having fewer field agents working drug cases 
needs to be monitored and assessed over time. Prior to September 11, 
2001, there was no indication from the FBI that their more traditional 
crime areas were overstaffed. FBI officials advised us that agents 
will still participate in as many crime-fighting taskforces as they 
have in the past, but that the number of agents assigned to each 
effort will be fewer in order to free resources for counterterrorism 
work. FBI officials also indicated that agents would be made available 
to assist state and local law enforcement with short-term needs, such 
as adding agents when widespread arrests are planned. 

In the drug area, which is the hardest hit in this reallocation, the 
Drug Enforcement Administration (DEA) is the major federal player. 
While DEA's resources have increased in recent years, at this time we 
are not aware of any plans by DOJ to request additional resources for 
DEA to fill any gap that may be left by withdrawal of substantial FBI 
drug enforcement resources. DEA has announced, though, that it will 
move some agents from headquarters to the field, which could 
potentially help fill any gaps in federal-level drug law enforcement. 

The reorganization plan also calls for a build-up of the FBI 
headquarters Counterterrorism Division through the transfer of 150 
counterterrorism agents from field locations to Washington, D.C. This 
seems consistent with the Director's intention of shifting from a 
reactive to a proactive orientation in addressing terrorism and making 
counterterrorism a national program with leadership and expertise in 
headquarters and a response capability that is more mobile, agile, and 
flexible in terms of assisting the field offices. These 150 positions 
would then be backfilled in the field through recruitment of new 
agents. According to the FBI, the enhancement of this headquarters' 
unit is intended to build "bench strength" in a single location rather 
than have expertise dispersed in multiple locations. When additional 
counterterrorism assistance is needed in field locations, headquarters 
staff would be deployed to help. Staff assigned to this unit would 
also be expected, and encouraged through incentives, to stay in 
counterterrorism work for an extended period of time. Staying in place 
would help to ensure increasing the depth of skills rather than 
following the more usual FBI protocol of more frequent rotations 
through a variety of assignments. 

An important part of the build-up of the Counterterrorism Division and 
making headquarters more responsive to the field, according to the 
FBI, is the establishment of "flying squads" with national level 
expertise and knowledge to enhance headquarters' ability to coordinate 
national and international investigations and support field 
investigative operations. The flying squads are intended to provide a 
"surge capacity" for quickly responding to and resolving unfolding 
situations and developments in locations, both within and outside the 
United States, where there is a need to augment FBI field resources 
with specialized personnel or there is no FBI presence. 

Another important part of the build-up is the establishment of a 
National Joint Terrorism Task Force to facilitate the flow of 
information quickly and efficiently between the FBI and other federal, 
state, and local law enforcement and intelligence agencies. The 
national task force, which is to be comprised of members of the 
intelligence community, other federal law enforcement agencies, and 
two major police departments, is intended to complement and coordinate 
the already established 51 field office terrorism task forces. 

Training is also essential to ensuring that resources shifted to 
counterterrorism work can be used most effectively. There is no doubt 
that some of the skills needed for criminal investigations and 
intelligence work overlap with the skills needed for counterterrorism 
work. There will, however, be a need for specialized training 
concerning terrorist organizations and tactics. The FBI plans to fill 
this training need. 

Director Mueller is planning a number of steps in this phase of the 
reorganization to align resources with priorities. But, a broader 
assessment of the organization in relation to priorities may identify 
other realignment issues. Given the seeming disparity between 
priorities and resource allocation that will remain after the current 
realignment, more resource changes may be needed. Reconsideration may 
also be given to the field office structure. Is the 56 field office 
configuration the most effective spread of staff in terms of location 
to achieve results in relation to the priorities of the 21st Century? 
In December 2001, Director Mueller announced a headquarters 
reorganization that altered the number of layers of management. But, 
is more de-layering needed to optimize the functioning of the 

Director Mueller will also need to address significant succession 
planning issues. According to a 2001 Arthur Anderson management study 
on the FBI, about a quarter of the special agent workforce will be 
eligible to retire between 2001 and 2005. Of perhaps greater concern, 
80 percent of the Senior Executive Corps was eligible for retirement 
at the time of the Arthur Anderson review. While the potential loss of 
expertise through retirements will be substantial, this turnover also 
affords Director Mueller the opportunity to change culture, skill mix, 
deployment locations, and other agency attributes. 

Building Analytic Capacity: 

To build the capacity to prevent future terrorist attacks, the FBI 
plans to expand its Office of Intelligence with an improved and robust 
analytical capability. In the past, the FBI has focused on case-
specific analysis and on terrorism enterprise intelligence 
investigations intended to discern the structure, scope, membership, 
and finances of suspect organizations. Shortcomings in its analytical 
capabilities were identified by the FBI as far back as its 1998 
strategic plan. That plan stated that the FBI lacked sufficient 
quantities of high-quality analysts, most analysts had little or no 
training in intelligence analysis, and many lacked academic or other 
experience in the subject matter for which they were responsible. 
Furthermore, it stated that the FBI needed strategic analysis 
capability for spotting trends and assessing U.S. vulnerabilities to 
terrorist activities. The events of September 11 and subsequent 
revelations highlight several of these continuing weaknesses. 

The Office of Intelligence, created in December 2001 as part of the 
first phase of the reorganization, supports both counterterrorism and 
counterintelligence. The Office will focus on building a strategic 
analysis capability and improving the FBI's capacity to gather, 
analyze, and share critical national security information. According 
to the FBI, a new College of Analytical Studies at the FBI Academy 
will support the new Office by training analysts on the latest tools 
and techniques for both strategic and tactical analysis. This is a 
long-term effort that is long overdue, as is the need for technology 
that can support the analysts' work. Our May 2000 review of the 
Justice Department's Campaign Finance Task Force found that the FBI 
lacked an adequate information system that could manage and 
interrelate the evidence that had been gathered in relation to the 
Task Force's investigations.[Footnote 4] It is unclear how the FBI's 
proposed analytical efforts will interrelate with the planned 
analytical capability of the proposed Department of Homeland Security. 

The National Infrastructure Protection Center: 

The National Infrastructure Protection Center (NIPC) at the FBI is the 
"national focal point" for gathering information on threats and 
facilitating the federal government's response to computer-based 
incidents. Specifically, NIPC is responsible for providing 
comprehensive analyses on threats, vulnerabilities, and attacks; 
issuing timely warnings on threats and attacks; and coordinating the 
government's response to computer-based incidents. In April 2001, we 
reported that multiple factors have limited the development of NIPC's 
analysis and warning capabilities.[Footnote 5] These include the lack 
of a comprehensive governmentwide or national framework for promptly 
obtaining and analyzing information on imminent attacks, a shortage of 
skilled staff, the need to ensure that NIPC does not raise undue alarm 
for insignificant incidents, and the need to ensure that sensitive 
information is protected. At that time, we recommended that NIPC 
develop a comprehensive written policy for establishing analysis and 
warning capabilities. Although the Director of NIPC generally agreed 
with GAO's findings and stated that the NIPC considers it of the 
utmost urgency to address the shortcomings identified, we are not 
aware of any actions to address this recommendation. 

The FBI reorganization plan calls for NIPC to be housed in the Cyber 
Division, which is under the leadership of the Executive Assistant 
Director for Criminal Investigations. This location seems inconsistent 
with ensuring that it focuses proactively on early warning as opposed 
to reactively. The President's plans for the Department of Homeland 
Security call for NIPC to be moved out of the FBI and into this new 
department. Regardless of location, a focus on enhancing its 
capabilities as outlined in our 2001 report is critical. 


The plan also calls for the recruitment of additional agents, 
analysts, translators, and others with certain specialized skills and 
backgrounds. In total, the FBI is expected to hire 900 agents this 
year—about 500 to replace agents who are projected to be leaving the 
agency and 400 to fill newly created positions. FBI officials stated 
that based on past experience they expect to be able to meet their 
agent-recruiting target and can accommodate the size of this influx at 
their training facilities. However, recruitment may become more 
difficult than in prior years because of the competing demand for 
qualified candidates, particularly those with specialized skills 
(e.g., technology, languages, and sciences), from other law 
enforcement and commercial entities that are also planning to increase 
their investigative capacity this year. This would include competition 
for qualified staff with the Transportation Security Administration 
and with the proposed Department of Homeland Security. 

In January 2002, we reported on the need for additional translators 
and interpreters in four federal agencies, including the FBI.[Footnote 
6] We reported that of a total of about 11,400[Footnote 7] special 
agents at the FBI, just under 1,800 have some foreign language 
proficiency, with fewer than 800 (about 7 percent) having language 
skills sufficient to easily interact with native speakers. Hiring new 
agents with foreign language proficiency, especially those with skills 
in Middle Eastern and Asian languages, is essential but could be 
difficult given competing market demands for their skills. Obtaining 
security clearances and basic training will add additional time to the 
process of enhancing the FBI's strength in language proficiency. 

The FBI also uses part-time contract staff to meet translation and 
interpretation needs and to augment its 446 authorized translator and 
interpreter positions (55 of which are vacant at this time). However, 
counterterrorism missions may require flexibility that contract staff 
working part-time schedules cannot provide, such as traveling on short 
notice or working extended and unusual hours. While the FBI has shared 
linguistic resources with other agencies, more opportunities for 
pooling these scarce resources should be considered. 

Other Important Issues Related to the FBI Transformation: 

Transformations of organizations are multifaceted undertakings. The 
recently announced changes at the FBI focus on realignment of existing 
resources to move in the direction of aligning with the agency's new 
priorities. Earlier changes altered the FBI's top-level management 
structure, accountability, and span of control. A variety of issues 
will require the Director's attention, and that of others, including 
Attorney General Ashcroft, to successfully move the agency into the 
21st Century. 

These include: 

* major communications and information technology improvements,	 

* development of an internal control system that will ensure 
protection of civil liberties as investigative constraints are 
loosened, and, 

* management of the ripple effect that changes at the FBI will have on 
other aspects of the law enforcement community.	 

Communications has been a longstanding problem for the FBI. This 
problem has included antiquated computer hardware and software, 
including the lack of a fully functional e-mail system. These 
deficiencies serve to significantly hamper the FBI's ability to share 
important and time sensitive information with the rest of the FBI and 
across other intelligence and law enforcement agencies. Sharing of 
investigative information is a complex issue that encompasses legal 
requirements related to law enforcement sensitive and classified 
information and its protection through methods such as encryption. 
[Footnote 8] It is also a cultural issue related to a tradition of 
agents holding investigative information close so as not to jeopardize 
evidence in a case. Whereas, in a more proactive investigative 
environment, the need for more functional communication is of 
paramount importance and will be essential for partnering with other 
law enforcement agencies and the intelligence community. Stated 
differently, we do not believe the FBI will be able to successfully 
change its mission and effectively transform itself without 
significantly upgrading its communications and information technology 
capabilities. This is critical, and it will take time and money to 
successfully address. 

In February 2002, as part of a governmentwide assessment of federal 
agencies, we reported on enterprise architecture management needs at 
the FBI.[Footnote 9] Enterprise architecture is a comprehensive and 
systematically derived description of an organization's operations, 
both in logical and technical terms, that has been shown to be 
essential to successfully building major information technology (IT) 
systems. Specifically, we reported that the FBI needed to fully 
establish the management foundation that is necessary to begin 
successfully developing, implementing, and maintaining an enterprise 
architecture. While the FBI has implemented most of the core elements 
associated with establishing the management foundation, it had not yet 
established a steering committee or group that has responsibility for 
directing and overseeing the development of the architecture. 

While establishing the management foundation is an essential first 
step, important additional steps still need to be taken for the FBI to 
fully implement the set of practices associated with effective 
enterprise architecture management. These include, among other things, 
having a written and approved policy for developing and maintaining 
the enterprise architecture and requiring that IT investments comply 
with the architecture. The successful development and implementation 
of an enterprise architecture, an essential ingredient of an IT 
transformation effort for any organization and even more important for 
an organization as complex as the FBI, will require, among other 
things, sustained commitment by top management, adequate resources, 
and time. The Director has designated IT as one of the agency's 10 

Although the FBI wishes to become a more proactive agency, it needs to 
be cognizant of individuals' civil liberties. Guidelines created in 
the 1970's to stem abuses of civil liberties resulting from the FBI's 
domestic intelligence activities have recently been revised to permit 
agents to be more proactive. For example, these guidelines permit FBI 
presence at public gatherings, which generally had been inhibited by 
the prior guidelines. No information obtained from such visits can be 
retained unless it relates to potential criminal or terrorist 
activity. To better ensure that these new investigative tools do not 
infringe on civil liberties, appropriate internal controls, such as 
training and supervisory review, must be developed, implemented, and 

Our central focus today is on the effects of changes at the FBI on the 
FBI itself, and we have also alluded to a potential impact on DEA of a 
shift in FBI drug enforcement activity. It is also important to 
remember that these changes may have a ripple effect on the nature and 
volume of work of other Justice Department units and their resource 
needs, including the Office of Intelligence Policy and Review, the 
U.S. Attorneys Offices, and the Criminal Division's Terrorism and 
Violent Crime Section. For example, if the volume of FBI 
counterterrorism investigations increases substantially and the FBI 
takes a more proactive investigative focus, one could expect an 
increased volume of Foreign Intelligence Surveillance Act requests to 
the Office of Intelligence Policy and Review.[Footnote 10] Moreover, 
should those requests be approved and subsequent surveillance or 
searches indicate criminal activity, U.S. Attorneys Offices and the 
Terrorism and Violent Crime Section would be brought in to apply their 
resources to those investigations. In addition, because of the FBI's 
more proactive investigations, one could expect more legal challenges 
to the admissibility of the evidence obtained and to the 
constitutionality of the surveillance or search.[Footnote 11] 

State and local law enforcement are also likely to be affected by a 
change in FBI focus. Although the major gap that state and local law 
enforcement may have to help fill as a result of this realignment is 
in the drug area, if additional FBI resources are needed for 
counterterrorism, state and local law enforcement may have to take on 
greater responsibility in other areas of enforcement as well. 

Basic Elements of a Successful Transformation: 

As the FBI moves forward in its efforts to transform its culture and 
reexamine its roles, responsibilities, and desired results to 
effectively meet the realities and challenges of the post-September 11 
environment, it should consider employing the major elements of 
successful transformation efforts that have been utilized by leading 
organizations both here and abroad. These begin with gaining the 
commitment and sustained attention of the agency head and all in 
senior-level leadership. It requires a redefinition and communication 
of priorities and values and a performance management system that will 
reinforce agency priorities. It will also require a fundamental 
reassessment of the organizational layers, levels, units, and 
locations. Any realignment must support the agency's strategic plan 
and desired transformation. Organizations that have successfully 
undertaken transformation efforts also typically use best practices 
for strategic planning; strategic human capital management; senior 
leadership and accountability; realignment of activities, processes, 
and resources; and internal and external collaboration among others. 
[Footnote 12] 

Strategic Planning: 

It has long been understood that in successful organizations strategic 
planning is used to determine and reach agreement on the fundamental 
results the organization seeks to achieve, the goals and measures it 
will set to assess programs, and the resources and strategies needed 
to achieve its goals.[Footnote 13] Strategic planning helps an 
organization to be proactive, anticipate and address emerging threats, 
and take advantage of opportunities to be reactive to events and 
crises. Leading organizations, therefore, understand that planning is 
not a static or occasional event, but a continuous, dynamic, and 
inclusive process. Moreover, it can guide decision making and day-to-
day activities. 

In addition to contributing to the overall DOJ Strategic Plan, the FBI 
has developed its own strategic planning document. Issued in 1998, and 
intended to cover a 5-year period, the plan emphasized the need for 
many of the changes we are talking about today. It is important to 
note that the 1998 plan called for a build up of expertise and 
emphasis in the counterterrorism area and a diminution of activities 
in enforcement of criminal law, which is consistent with the focus of 
the Director's current priorities. These priorities, as presented by 
the Director on May 29, 2002, lay the groundwork for a new strategic 
plan that FBI officials have indicated they will be developing. 

A new strategic plan is essential to guide decision making in the 
FBI's transformation. The Director has set agency priorities, but the 
strategic plan can be the tool to link actions together to achieve 
success. The first step in developing a strategic plan is the 
development of a framework. This framework can act as a guide when the 
plan is being formulated. 

Strategic Human Capital Management: 

The FBI's employees, or human capital, represent its most valuable 
asset. An organization's people define its character, affect its 
capacity to perform, and represent the knowledge base of the 
organization. We have recently released an exposure draft of a model 
of strategic human capital management that highlights the kinds of 
thinking that agencies should apply and steps they can take to manage 
their human capital more strategically.[Footnote 14] The model focuses 
on four cornerstones for effective strategic human capital management—-
leadership; strategic human capital planning; acquiring, developing, 
and retaining talent; and results-oriented organizational culture—-
that the FBI and other federal agencies may find useful in helping to 
guide their efforts. 

Director Mueller recognizes that one of the most basic human capital 
challenges the FBI faces is to ensure that it has staff with the 
competencies-—knowledge, skills, and abilities—-needed to address the 
FBI's current and evolving mission. The announced plan makes a number 
of changes related to human capital that should move the FBI toward 
ensuring that it has the skilled workforce that it needs and that 
staff are located where they are needed the most. Hiring specialists, 
developing added strength in intelligence and analytic work, and 
moving some expertise to headquarters so that it can be more 
efficiently shared across the agency are all steps in a positive 
direction toward maximizing the value of this vitally important agency 
asset. Given the anticipated competition for certain highly skilled 
resources, some hiring flexibility may be needed. 

The FBI does not have a comprehensive strategic human capital plan. 
This plan, flowing out of an updated strategic plan, could guide the 
FBI as it moves through an era of transformation. A performance 
management system that encourages staff to focus on achieving agency 
goals is an important tool for agency transformation and leads to 
positive staff development. 

Senior Leadership and Accountability: 

The importance of Director Mueller's personal commitment to change at 
the FBI cannot be overstated. His leadership and commitment is 
essential, but he needs help to be successful. Director Mueller has 
recently brought on board a Special Assistant to oversee the 
reorganization and re-engineering initiatives. This individual brings 
a wide range of expertise to the position and will perform many of the 
functions of a Chief Operating Officer (COO). 

The FBI can reinforce its transformation efforts and improve its 
performance by aligning institutional unit, and individual employee, 
performance expectations with planned agency goals and objectives. The 
alignment will help the FBI's employees see the connection between 
their daily activities and Bureau's success. High-performing 
organizations have recognized that a key element of an effective 
performance management system is to create a "line of sight" that 
shows how individual responsibilities and day-to-day activities are 
intended to contribute to organizational goals. Coupled with this is 
the need for a performance management system that encourages staff to 
focus on performing their duties in a manner that helps the FBI 
achieve its objectives. The FBI currently uses a pass/fail system to 
rate special agents' performance. This type of system does not provide 
enough meaningful information and dispersion in ratings to recognize 
and reward top performers, help everyone attain their maximum 
potential, and deal with poor performers. As a result, the FBI needs 
to review and revise its performance management system in a way that 
is in line with the agency's strategic plan, including results, core 
values, and transformational objectives. 

Realignment of Activities, Processes, and Resources: 

An organization's activities, core processes, and resources must be 
aligned to support its mission and help it achieve its goals. Leading 
organizations start by assessing the extent to which their programs 
and activities contribute to meeting their mission and intended 
results. They often find, as the FBI's efforts are suggesting, that 
their organizational structures are obsolete and inadequate to meet 
modern demands and that levels of hierarchy or field to headquarters 
ratios, must be changed. As indicated earlier in this testimony, this 
FBI reorganization plan deals directly with reallocation of existing 
resources to more clearly realign with the agency's revised mission. 
The Director has taken a major step in relation to this aspect of 
transforming an organization. However, ultimately the FBI must engage 
in a fundamental review and reassessment of the level of resources 
that it needs to accomplish its mission and how it should be organized 
to help achieve the desired results. This means reviewing and probably 
revising the number of layers, levels, and units to increase 
efficiency and enhance flexibility and responsiveness. 

Internal and External Collaboration: 

There is also a growing understanding that all meaningful results that 
agencies hope to achieve are accomplished through networks of 
governmental and nongovernmental organizations working together toward 
a common purpose. In almost no area of government is this truer than 
it is in the law enforcement arena. Effectiveness in this domain, 
particularly in relation to counterterrorism, is dependent upon timely 
information sharing and coordinated actions among the multiple 
agencies of the federal government, states, localities, the private 
sector, and, particularly with the FBI, the international community. 
In his plan, Director Mueller has indicated that he has taken and will 
take additional steps to enhance communication with the CIA and other 
outside organizations. It should be noted that the CIA has agreed to 
detail analysts to the FBI on a short-term basis to augment FBI 

In the law enforcement setting, specifically at the FBI, there are 
certain legal restrictions concerning the sharing of information that 
set limits on communications. Recently, some of these restrictions 
have been eased. The USA PATRIOT Act, P.L. 107-56, contains a number 
of provisions that authorize information sharing and coordination of 
efforts relating to foreign intelligence investigations. For example, 
Section 905 of the PATRIOT Act requires the Attorney General to 
disclose to the Director of the CIA foreign intelligence information 
acquired by DOJ in the course of a criminal investigation, subject to 
certain exceptions. 

Internally, leading organizations seek to provide managers, teams, and 
employees at all levels the authority they need to accomplish
programmatic goals and work collaboratively to achieve organizational 
outcomes. Communication flows up and down the organization to ensure 
that line staff has the ability to provide leadership with the 
perspective and information that the leadership needs to make 
decisions. Likewise, senior leadership keeps line staff informed of 
key developments and issues so that the staff can best contribute to 
achieving the organizations goals. New provisions that provide more 
authority to FBI field offices to initiate and continue investigations 
is in keeping with this tenet of leading organizations. 

The Importance of Continual Monitoring and Oversight for Success: 

Transforming an organization like the FBI with its deep-seated culture 
and tradition is a massive undertaking that will take considerable 
effort and time to implement. Specifically, the reorganization and 
realignment plan are important first steps; the implementation of the 
plan and the elements relating to a successful organizational 
transformation will take many years. A strategic plan and human 
capital plan are essential to keep the FBI on course. Continuous 
internal, and independent external, monitoring and oversight are 
essential to help ensure that the implementation of the transformation 
stays on track and achieves its purpose of making the FBI more 
proactive in the fight against terrorism without compromising civil 
rights. It was such oversight of the FBI's domestic intelligence 
activities in the 1970's that helped identify civil liberties abuses 
and helped lead to the more restrictive Attorney General guidelines 
for such activities. 

The DOJ's Inspector General recently discussed several ongoing, 
completed, and planned reviews relating to counterterrorism and 
national security. But, it is equally important for Congress to 
actively oversee the FBI's proposed transformation. In its request for 
our testimony today, the Committee asked us to identify issues 
relating to the reorganization and realignment for follow-up review 
and said that it may want us to do further reviews of the 
implementation of the reorganization plan. We stand ready to assist 
this and other congressional committees in overseeing the 
implementation of this landmark transformation. There are, in fact, 
specific areas relating to the reorganization and realignment that 
might warrant more in-depth review and scrutiny, including (1) 
progress in developing a new strategic plan (2) a review of broader 
human capital issues, (3) FBI uses of the funds appropriated to fight 
terrorism, (4) measurement of performance and results, (5) the 
implementation of the Attorney General's revised guidelines, and (6) 
the upgrading of information technology and analytic capacity. 

In closing, I would like to commend the Department of Justice and FBI 
officials for their cooperation and responsiveness in providing 
requested documentation and scheduling meetings needed to develop this 
statement within a tight timeframe. 

Mr. Chairman, this concludes my prepared statement. I would be pleased 
to answer any questions you and the Subcommittee members may have. 

[End of section] 

Related GAO Products: 

Homeland Security: 

Homeland Security: Key Elements to Unify Efforts Are Underway but 
Uncertainty Remains. [hyperlink,]. Washington, D.C.: June 7, 

National Preparedness: Integrating New and Existing Technology and 
Information Sharing into an Effective Homeland Security
Strategy. [hyperlink,]. 
Washington, D.C.: June 7, 2002. 

Homeland Security: Responsibility and Accountability for Achieving 
National Goals. [hyperlink,]. 
Washington, D.C.: April 11, 2002. 

National Preparedness: Integration of Federal, State, Local, and 
Private Sector Efforts is Critical to an Effective National Strategy 
for Homeland Security. [hyperlink,]. Washington, D.C.: April 11, 

Homeland Security: Progress Made; More Direction and Partnership 
Sought. [hyperlink,]. 
Washington, D.C.: March 12, 2002. 

Homeland Security: Challenges and Strategies in Addressing Short- and 
Long-Term National Needs. [hyperlink,]. Washington, D.C.: November 
7, 2001. 

Homeland Security: A Risk Management Approach Can Guide Preparedness 
Efforts. [hyperlink,]. 
Washington, D.C.: October 31, 2001. 

Homeland Security: Key Elements of a Risk Management Approach. 
[hyperlink,]. Washington, 
D.C.: October 12, 2001. 

Critical Infrastructure Protection: Significant Challenges in 
Safeguarding Government and Privately Controlled Systems from Computer-
Based Attacks. [hyperlink,]. 
Washington, D.C.: September 26, 2001. 

Homeland Security: A Framework for Addressing the Nation's Issues. 
[hyperlink,]. Washington, 
D.C.: September 21, 2001. 

Critical Infrastructure Protection: Significant Challenges in 
Developing Analysis, Warning, and Response Capabilities. [hyperlink,]. Washington, D.C.: July 25, 

Critical Infrastructure Protection: Significant Challenges in 
Developing National Capabilities. [hyperlink,]. Washington, D.C.: April 25, 

Critical Infrastructure Protection: Challenges to Building a 
Comprehensive Strategy for Information Sharing and Coordination. 
[hyperlink,]. Washington, 
D.C.: July 26, 2000. 

Critical Infrastructure Protection: National Plan for Information 
Systems Protection. [hyperlink,]. Washington, D.C.: 
February 11, 2000. 

Critical Infrastructure Protection: Fundamental Improvements Needed to 
Assure Security of Federal Operations. [hyperlink,]. Washington, D.C.: October 6, 

Combating Terrorism: 

Combating Terrorism: Intergovernmental Cooperation in the Development 
of a National Strategy to Enhance State and Local Preparedness. 
[hyperlink,]. Washington, 
D.C.: April 2, 2002. 

Combating Terrorism: Enhancing Partnerships Through a National 
Preparedness Strategy. [hyperlink,]. Washington, D.C.: March 28, 

Combating Terrorism: Critical Components of a National Strategy to 
Enhance State and Local Preparedness. [hyperlink,]. Washington, D.C.: March 25, 

Combating Terrorism: Intergovernmental Partnership in a National 
Strategy to Enhance State and Local Preparedness. [hyperlink,]. Washington, D.C.: March 22, 

Combating Terrorism: Key Aspects of a National Strategy to Enhance 
State and Local Preparedness. [hyperlink,]. Washington, D.C.: March 1, 

Combating Terrorism: Considerations for Investing Resources in 
Chemical and Biological Preparedness. [hyperlink,]. Washington, D.C.: October 
17, 2001. 

Combating Terrorism: Selected Challenges and Related Recommendations. 
[hyperlink,]. Washington, D.C.: 
September 20, 2001. 

Combating Terrorism: Actions Needed to Improve DOD's Antiterrorism 
Program Implementation and Management. [hyperlink,]. Washington, D.C.: September 
19, 2001. 

Information Security: Code Red, Code Red II, and SirCam Attacks 
Highlight Need for Proactive Measures. [hyperlink,]. Washington, D.C.: August 
29, 2001. 

International Crime Control: Sustained Executive-Level Coordination of 
Federal Response Needed. [hyperlink,]. Washington, D.C.: August 13, 

Combating Terrorism: Comments on H.R. 525 to Create a President's 
Council on Domestic Preparedness. [hyperlink,]. Washington, D.C.: May 9, 

Combating Terrorism: Observations on Options to Improve the Federal 
Response. [hyperlink,]. 
Washington, D.C.: April 24, 2001. 

Combating Terrorism: Comments on Counterterrorism Leadership and 
National Strategy. [hyperlink,]. Washington, D.C.: March 27, 

Combating Terrorism: Federal Response Teams Provide Varied 
Capabilities; Opportunities Remain to Improve Coordination. 
[hyperlink,]. Washington, D.C.: 
November 30, 2000. 

Combating Terrorism: Linking Threats to Strategies and Resources. 
Washington, D.C.: July 26, 2000. 

Combating Terrorism: How Five Foreign Countries Are Organized to
Combat Terrorism. [hyperlink,]. Washington, D.C.: April 
7, 2000. 

Combating Terrorism: Issues in Managing Counterterrorist Programs. 
Washington, D.C.: April 6, 2000. 

Combating Terrorism: Observations on the Threat of Chemical and 
Biological Terrorism. [hyperlink,]. Washington, D.C.: 
October 20, 1999. 

Combating Terrorism: Need for Comprehensive Threat and Risk 
Assessments of Chemical and Biological Attack. [hyperlink,].
Washington, D.C.: September 7, 1999. 

Combating Terrorism: Analysis of Federal Counterterrorist Exercises. 
Washington, D.C.: June 25, 1999. 

Combating Terrorism: Analysis of Potential Emergency Response 
Equipment and Sustainment Costs. [hyperlink,]. Washington, D.C.: June 
9, 1999. 

Combating Terrorism: Observations on Growth in Federal Programs. 
Washington, D.C.: June 9, 1999. 

Combating Terrorism: Use of National Guard Response Teams Is Unclear. 
[hyperlink,]. Washington, 
D.C.: May 21, 1999. 

Combating Terrorism: Issues to Be Resolved to Improve Counterterrorism 
Operations. [hyperlink,]. 
Washington, D.C.: May 13, 1999. 

Combating Terrorism: Observations on Federal Spending to Combat 
Terrorism. [hyperlink,]. Washington, D.C.: 
March 11, 1999. 

Combating Terrorism: Opportunities to Improve Domestic Preparedness 
Program Focus and Efficiency. [hyperlink,]. Washington, D.C.: 
November 12, 1998. 

Combating Terrorism: Observations on the Nunn-Lugar-Domenici Domestic 
Preparedness Program. [hyperlink,]. Washington, D.C.: 
October 2, 1998. 

Combating Terrorism: Observations on Crosscutting Issues. [hyperlink,]. Washington, D.C.: 
April 23, 1998. 

Combating Terrorism: Threat and Risk Assessments Can Help Prioritize 
and Target Program Investments. [hyperlink,]. Washington, D.C.: April 
9, 1998. 

Combating Terrorism: Spending on Governmentwide Programs Requires 
Better Management and Coordination. [hyperlink,]. Washington, D.C.: 
December 1, 1997. 

Combating Terrorism: Federal Agencies' Efforts to Implement National 
Policy and Strategy. [hyperlink,]. Washington, D.C.: 
September 26, 1997. 

Terrorism and Drug Trafficking: Responsibilities for Developing 
Explosives and Narcotics Detection Technologies. [hyperlink,]. Washington, D.C.: April 
15, 1997. 

Justice Department/Federal Bureau of Investigation: 

FBI Intelligence Investigations: Coordination Within Justice on 
Counterintelligence Criminal Matters Is Limited. [hyperlink,]. Washington, D.C.: July 16, 

GAO's Work at the FBI: Access to Data, Documents, and Personnel. 
[hyperlink,]. Washington, 
D.C.: June 20, 2001. 

Information Security: Software Change Controls at the Department of 
Justice. [hyperlink,]. 
Washington, D.C.: June 30, 2000. 

Campaign Finance Task Force: Problems and Disagreements Initially 
Hampered Justice's Investigation. [hyperlink,]. Washington, D.C.: May 
31, 2000. 

Year 2000 Computing Challenge: Readiness of FBI's National Instant 
Criminal Background Check System Can Be Improved. [hyperlink,]. Washington, D.C.: 
December 16, 1999. 

FBI Accountability for Drugs Used in Special Operations: Deficiencies 
Identified and Actions Taken. [hyperlink,]. Washington, D.C.: 
December 2, 1999. 

Year 2000 Computing Challenge: FBI Needs to Complete Business 
Continuity Plans. [hyperlink,]. Washington, D.C.: October 
22, 1999. 

Combating Terrorism: FBI's Use of Federal Funds for Counterterrorism-
Related Activities (FY1955-1998). [hyperlink,]. Washington, D.C.: November 
20, 1998. 

FBI: Advanced Communications Technologies Pose Wiretapping Challenges. 
Washington, D.C.: July 17, 1992. 

Justice Management: The Value of Oversight Has Been Demonstrated. 
[hyperlink,]. Washington, 
D.C.: July 11, 1991. 

International Terrorism: FBI Investigates Domestic Activities to 
Identify Terrorists. [hyperlink,]. Washington. D.C.: 
September 7, 1990. 

International Terrorism: Status of GAO's Review of the FBI's 
International Terrorism Program. [hyperlink,]. Washington, D.C.: June 
22, 1989. 

FBI Domestic Intelligence Operations: An Uncertain Future. [hyperlink,]. Washington, D.C.: November 
9, 1977. 

Controlling the FBI's Domestic Intelligence Operations. [hyperlink,]. Washington, D.C.: March 
29, 1976. 

FBI Domestic Intelligence Operations — Their Purpose and Scope: Issues 
that Need to be Resolved. [hyperlink,]. Washington, D.C.: February 
24, 1976. 

Managing for Results: Building on the Momentum for Strategic and Human 
Capital Reform. [hyperlink,]. 
Washington, D.C.: March 18, 2002. 

A Model of Strategic Human Capital Management. [hyperlink,]. Washington, D.C.: March 15, 

Information Technology: Enterprise Architecture Use Across the Federal 
Government Can Be Improved. [hyperlink,]. Washington, D.C.: February 19, 

Foreign Languages: Human Capital Approach Needed to Correct Staffing 
and Proficiency Shortfalls. [hyperlink,]. Washington, D.C.: January 31, 

Information Security: Advances and Remaining Challenges to Adoption of 
Public Key Infrastructure Technology. [hyperlink,]. Washington, D.C.: February 

Management Reform: Elements of Successful Improvement Initiatives. 
[hyperlink,]. Washington, 
D.C.: October 15, 1999. 

Agencies' Annual Performance Plans Under the Results Act: An 
Assessment Guide to Facilitate Congressional Decisionmaking. 
Washington, D.C.: February 1998. 

Performance-Based Organizations: Lessons From the British Next Steps 
Initiative. [hyperlink,]. 
Washington, D.C.: July 8, 1997. 

Performance-Based Organizations: Issues for the Saint Lawrence Seaway 
Development Corporation Proposal. [hyperlink,]. Washington, D.C.: May 15, 

Agencies' Strategic Plans Under GPRA: Key Questions to Facilitate 
Congressional Review. [hyperlink,]. Washington, D.C.: May 

Executive Guide: Effectively Implementing the Government Performance 
and Results Act. [hyperlink,]. Washington, D.C.: June 

[End of section] 


[1] The Second Report of the Advisory Panel to Assess Domestic 
Response Capabilities for Terrorism Involving Weapons of Mass 
Destruction (Gilmore Report), (Dec. 15, 2001). 

[2] Arthur Anderson, Management Study of the Federal Bureau of 
Investigation, (Dec. 14, 2001). 

[3] U.S. General Accounting Office, Strategic Plan 2002-2007 (June 

[4] U.S. General Accounting Office, Campaign Finance Task Force: 
Problems and Disagreements Initially Hampered Justice's Investigation, 
[hyperlink,] (Washington, 
D.C.: May 31, 2000). 

[5] U.S. General Accounting Office, Critical Infrastructure Protection 
Significant Challenges in Developing National Capabilities, 
[hyperlink,] (Washington, D.C.: 
April 2001). 

[6] U.S. General Accounting Office, Foreign Languages: Human Capital 
Approach Needed to Correct Staffing and Proficiency Shortfalls, 
[hyperlink,] (Washington, D.C.: 
Jan. 31, 2002). 

[7] This number includes special agents who are on reimbursable 

[8] Our February 2001 report, entitled Information Security: Advances 
and Remaining Challenges to Adoption of Public Key Infrastructure 
Technology [hyperlink,]  
discusses the challenges federal agencies face in implementing systems 
to protect the communication of such information. Of equal concern to 
the FBI and other law enforcement agencies is the use of commercially 
available, non-recoverable encryption products by terrorists and 
others engaged in serious criminal activity to prevent law enforcement 
from effectively using encrypted information obtained through 
electronic surveillances or seizure of electronic data. This is 
attributable to the fact that law enforcement agencies cannot always 
obtain the means necessary to decrypt the encrypted information. 

[9] U.S. General Accounting Office, Information Technology: Enterprise 
Architecture Use Across the Federal Government Can Be Improved, 
[hyperlink,] (Washington, D.C.: 
Feb. 19, 2002). 

[10] The Foreign Intelligence Surveillance Act of 1978, (P.L. 95-511), 
as amended, among other things, established legal standards and a 
process for seeking electronic surveillance and physical search 
authority in national security investigations seeking to obtain 
foreign intelligence and counterintelligence information within the 
United States. 

[11] FBI Intelligence Investigations: Coordination Within Justice on 
Counterintelligence Criminal Matters is Limited, [hyperlink,] (Washington, D. C.: July 16, 

[12] U.S. General Accounting Office, Management Reform: Elements of 
Successful Improvement Initiatives, [hyperlink,] (Washington. D.C.: Oct. 
15, 1999) and U.S. General Accounting Office Executive Guide: 
Effectively Implementing the Government Performance and Results Act, 
[hyperlink,] (Washington, 
D.C.: June 1996). 

[13] U.S. General Accounting Office, Agencies' Strategic Plans Under 
GPRA: Key Questions to Facilitate Congressional Review, [hyperlink,] (Washington, D.C.: May 
1997) and U.S. General Accounting Office, Agencies' Annual Performance 
Plans Under the Results Act: An Assessment Guide to Facilitate 
Congressional Decisionmaking, [hyperlink,] (Washington, D.C.: 
Feb. 1998). 

[14] U.S. General Accounting Office, A Model of Strategic Human 
Capital Management, [hyperlink,] (Washington, D.C.: Mar. 15, 

[End of section]