WASHINGTON - CIA director George Tenet predicted Wednesday it will take "another five years of work to have the kind of clandestine service our country needs" to combat al-Qaida and other terrorist threats.
"The same can be said for the National Security Agency, our imagery agency and our analytic community," Tenet testified before the commission investigating the worst terror attacks in the nation's history.
He said a series of tight budgets dating to the end of the Cold War meant that by the mid-1990s, intelligence agencies had "lost close to 25 percent of our people and billions of dollars in capital investment."
A needed transformation is under way, he said, and appealed for a long-term commitment in funding. "Our investments in capability must be sustained," he added.
Tenet's appearance was ironic to the core.
Several commissioners lavished praise on him for his foresight and efforts to restructure intelligence-gathering. Yet the panel's staff issued a report as the hearing opened that was sharply critical of the agency and apparatus he has lead for seven years as the nation's director of central intelligence.
"While we now know that al-Qaida was formed in 1988, at the end of the Soviet occupation of Afghanistan, the intelligence community did not describe this organization, at least in the documents we have seen, until 1999," the report said.
As late as 1997, it said, the CIA Counter-Terrorism Center "characterized Osama bin Laden as a financier of terrorism."
At the same time, though, the report said intelligence had recently received information revealing that bin Laden headed his "own terrorist organization" and had been involved in a number of attacks. These included one at a Yemen hotel where U.S. military personnel were quartered in 1992; the shooting down of Army helicopters in Somalia in 1993; and possibly the 1995 bombing of an American training mission to the Saudi Arabian National Guard.
It also noted several that "threat reports" produced by the intelligence apparatus had "mentioned the possibility of using an aircraft laden with explosives," such as the terrorists used on Sept. 11 in attacks that killed nearly 3,000.
"Of these, the most prominent asserted a possible plot to fly an explosives-laden aircraft into a U.S. city," it said. Others included reports of a plan to fly a plane into the Eiffel Tower in 1994, and of flying a plane into CIA headquarters.
Yet the counter terrorist center "did not analyze how a hijacked aircraft or other explosives-laden aircraft might be used as a weapon," the report said. If it had "it could have identified that a critical obstacle would be to find a suicide terrorist able to fly a large jet aircraft."
Questioned by former Rep. Tim Roemer, D-Ind., Tenet said he did not speak with President Bush during August, 2001, a period marked by concern over possible terrorist attacks. "He was on vacation and I was here," Tenet said, although he also added that he could have picked up the phone and called the president at any time if he had felt a need to do so.
Readily acknowledging that intelligence agencies "never penetrated the 9-11 plot," Tenet said, "We all understood (Osama) bin Laden's intent to strike the homeland but were unable to translate this knowledge into an effective defense of the country."
He bristled at some of the criticisms, including one that said intelligence services lacked a strategic plan to gather and examine information collected about al-Qaida or that they had no adequate way to integrate and disseminate it.
"That's flat wrong," he said.
John Lehman, a former Navy secretary and commission member, characterized the commission's document as a "damning report of a system that's broken, that doesn't function."
Noting that Bush has recently signaled an interest in overhauling the nation's intelligence-gathering structure, Lehman said change was coming.
Tenet, who has held his job for seven years across parts of two administrations of different parties, said he would welcome it.
In its report, the commission said the CIA missed the big-picture significance of "tell-tale indicators" of impending terrorist attacks, partly because of its culture of a piecemeal approach to intelligence analysis.
A more strategic analysis could have identified that the plot might require suicide hijackers who would take flight courses, the commission said. Establishing such "tell-tale indicators" could have raised red flags following a July 2001 FBI report of terrorist interest in aircraft training in Arizona, and the August 2001 arrest of terrorism suspect Zacarias Moussaoui because of suspicious behavior in a Minnesota flight school, it added.
Crediting Tenet, it said he recognized the need for strategic analysis against al-Qaida in late 2000 and appointed a manager in the CIA's Counterterrorist Center to create a new branch.