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Event: Interview of Stephen Colgate, former Assistant Attorney General forAdministrationType of event: InterviewDate: May 19,2004Special Access Issues: NonePrepared by: Caroline BarnesTeam Number: 6Location: K StParticipants: Christine Healey, Caroline BarnesBackground. as Assistant Attorney General for Administration (the Seniorcareer official in the Dept) and Chief Information Officer from 1992 to April 2001. From1990 to 1992 he was the Deputy Assistant Attorney Generalfor Personnel andAdministration, and from 1987 to 1990 was Deputy Assistant Attorney General forInformation and Administrative Services. He also served as Executive Officer in the CivilRights Division and Assistant Director of the budget staff. He started at DOJ in 1977and remained there until 2001 with the exception of two years spent at the TreasuryDepartment as Director of Finance and at FEMA as a budget officer. He has a MPA inPublic Finance from American University. According to a March 30,2001 news article,he left DOJ for the law firm of Piper Marbury Rudnick & Wolfe LLP to serve as"nationwide executive director. "]Colgate majored in Law Enforcement Administration at the University of Arizona andinitially thought he wanted to be an FBI agent. He moved to Washington, DC andreceived his MA in Public Administration and Finance from American University in1975. He then spent two years on Capitol Hill and joined the Department of Justice(DOJ) budget staff in 1977. He left DOJ to be a budget officer at the Federal EmergencyManagement Agency (FEMA) soon after it was formed and was in that position for oneyear working on continuity of government and presidential succession issues. He .returned to DOJ and served as the Assistant Director of the budget staff from 1982 to1985, then became the Executive Director of the Civil Rights Division. He left DOJ totake an SES position at the Department of Treasury as its Director of Finance, and thenreturned to DOJ as the Director of its finance staff. In 1987 he was made DeputyAssistant Attorney General for Personnel and Administration. He said that he was inessence the Department's Chief Information Officer (CIO) as well but that position didn'texist at the time. InNovember 1992 when the Assistant Attorney General forAdministration (his boss) retired, Attorney General Barr appointed him to that position.

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Itis the only position of its kind left in Government as it is not a political appointment.Colgate was the Department's Chief Financial Officer and, after the Clinger-Cohen Actwas passed, was the CIO as well.Colgate stated that when Philip Heymann and Eric Holder were Deputy AttorneyGeneral, Colgate worked directly with AG Reno. When Jamie Gorelick was DAG, heworked primarily with her.Colgate was eligible to retire from DOJ on January 16, 2001, and he stayed on throughthe Office of Management and Budget's (OMB) final revisions to President Clinton's lastbudget (2002). On January 19,2001, Reno submitted her last budget document, whichserved as a placeholder and was amended by AG Ashcroft.Colgate said he is close friends with FBI Director Mueller who was at DOJ with Colgateunder AG Barr.

DOJ Budget Process. Colgate stated that the DOJ budget office was always managingthree budgets simultaneously - closing one out, executing the current budget, andplanning the next one. First, the President issues general policy and program guidancewhich often is largely ignored. Second, the AG issues policy guidance, and third, theindividual (DOJ) agencies submit their budget requests, called "Spring PlanningEstimates," to DOJ (after the agencies conduct discussions/negotiations about their needs,etc.). The DOJ/Justice Management Division would do an analysis of the SPEs in lateSpring, early Summer and would hold hearings (non-adversarial) with the individualagencies to discuss. DOJ would then transmit its initial policy decisions to the agencies,the agencies could appeal, the AG would make a final decision, the agencies wouldrecraft their budget requests accordingly, and the AG would transmit the budgets to OMB. in September/October. OMB would then hold hearings and transmit its preliminaryviews on the submissions around Thanksgiving. The AG would appeal and differencesoften would be resolved/sorted out at Colgate's level. If that was not possible, the AGwould meet with the Director of OMB to discuss. The President would submit the finalbudget request to Congress at the end of January/beginning of February.Colgate said he did not remember AG Reno ever meeting with the President on thebudget. He added that DOJ grew faster than any other USG agency, so the AG reallywasn't in a position to argue too much with OMB's determinations. Reno, for example,was a "good soldier." She was arguing over rates of growth, after all.Colgate described the budget process as a "negotiating process" involving a good bit of"gamesmanship." The FBI and INS, for example, would ask for personnel increases inthe first round of negotiations that they knew the system wouldn't support in order to getas high a final number as possible. Through its analysis of the special agent turnover rateand its knowledge of the number of agents it can put through Quantico every year, theFBI can determine with a fairly high level of accuracy how many agents they realisticallycan absorb each year. Colgate said that despite this the FBI often asked for newpersonnel even when it was under burning existing FTEs in certain areas. This led to a

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situation where the FBI's infrastructure couldn't keep up with its pace of hiring, and ithad to institute a hiring freeze (around the time Louis Freeh came in as Director in early1993). In fact, the FBI used the supplemental CT funding it received after the OklahomaCity bombing for infrastructure requirements such as upgrading its Strategic Informationand Operations Center (SIOC) and building the new laboratory. DOJ "got in trouble withthe Hill" for not using these funds to hire new CT agents. Also, it took the FBI muchlonger than the Hill expected to complete these projects, in part because it took a longtime to get the contractors on board, and in part because the projects were poorlymanaged.Determining the Counterterrorism Budget. Colgate stated that the Department's. definition of CT changed over time so it is hard to track the level of CT funding overtime, especially before the FBI created its CT Division in 1999. The FBI's distinctionbetween domestic and international terrorism further complicated things, and the"counterterrorism crosscut" was a difficult figure to arrive at. Critical InfrastructureProtection (CIP) was a new concept toward the end of Colgate's tenure, in keeping withthe Washington game of "what's hot right now." CIP further complicated the CTdefinition.Creation of Counterterrorism Division and Investigative Services Division. The coldwar was over, state sponsors of terrorism were not as active, Chinese intelligence activitywas increasing, international radical fundamentalism was increasing, and the FBI'sNational Security Division was dominated by "relics of the cold war." It made sense toseparate out CT from NSD. FCI agents were not used to producing arrests, and CTagents needed to utilize more of the criminal tools. Also, the whole Wen Ho Lee debaclehad been very embarrassing, and FBI leadership wanted to get rid of Neil Gallagher (thenthe head of NSD) and put Dale Watson in to lead the CT effort.FBI Management of Infrastructure Projects. The FBI has a poor history with regardto managing large infrastructure proj ects. The proj ects were managed by FBI agents dueto the Bureau's "agents can do anything" outlook, and these agents didn't have the skillset to effectively manage these kinds of projects. The FBI faced a credibility problem onCapitol Hill for two reasons: 1) Its utilization of the Oklahoma City supplemental forinfrastructure projects that then took too long to complete, and 2) Freeh's resurrection oftwo other infrastructure proj ects, the Integrated Automated Fingerprint IdentificationSystem (IAFIS) and the National Crime Information Center (NCIC), which cost twice asmuch as they were intended to cost and took twice as long to complete. Freehacknowledged that these two projects were "a mess." He had to ask for a great deal morefunds and explain what the FBI had done with the funding they'd received initially. Itlooked to Congress like the FBI had "pissed it away." Freeh set up "red teams" tomonitor the progress of these projects, involved DOJ and OMB, and met with AG Renoregularly to provide progress reports. Colgate chaired DOl's oversight group for theseprojects. Ultimately, IAFIS was delivered and is now working well.

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The FBI continued to suffer from its own past failures in this area. Freeh realized that heneeded to get agents out of the top management positions on these projects. He knewthat the FBI was "way behind" in the IT Infrastructure area.Colgate views as a great myth the vision of the FBI as the lead law enforcement agencyin terms of its use of technology/infrastructure. In reality, the FBI lags behind all otherfederal law enforcement entities, even INS, in that area. For example, by the early 1990s,Assistant US Attorneys (AUSAs) across the country could communicate with each otherand with DOJ Headquarters by email, and they had access to the Internet on theirdesktops and could reach outside clients that way. The FBI did not have this rudimentarycapability. The FBI still used a telegraph system to communicate and had just startedintroducing Local Area Networks (LANs) and Wide Area Networks (WANs). Also, theinformation flow within the FBI was very hierarchical. Colgate referred to theintroduction ofLANs and WANs as "glasnost" within the FBI.Colgate said that while Freeh did not have a computer workstation in his office and didnot use a computer at work, he was an "absolute champion" in trying to modernize theBureau in that area. What Colgate did fault Freeh for, which he faulted the entire FBIfor, was its compulsion to develop these systems entirely within the FBI. These projectsalways had to be based on FBI ideas and FBI approaches and had to be unique to the FBI.Colgate described the FBI as "pig-headed" about this. The FBI wouldn't adopt anyoneelse's system (he mentioned DEA's "Firebird" system as an example of a system the FBIcould have adopted and re-tooled). Also, Freeh always argued for the "grand design."He wanted the FBI system to have "all the bells and whistles." Given the state of theFBI's information infrastructure, it would have made more sense for the FBI to simplyput in a functional email system rather than arguing to upgrade the entire system at once.When Colgate left DOJ in 2001, the FBI still couldn't transmit its FD-302s electronicallyfrom case agent to AUSA.Trilogy. The FBI divided this project in to stages to get out of what was a "disastersituation." They decided they would first modernize the systems, demonstrate success,and then add the tools. Freeh, to his credit, brought in Bob Dies of IBM and this got theproject some "traction" on Capitol Hill. Dies broke the project into these manageablepieces. Colgate said that he himself was a "fan of Dies," but because Dies came fromIBM and still owned a lot of IBM stock which he didn't want to sell (Colgate describeddoing so as "financial suicide"), he often had to recuse himself on certain issues and therewas a certain ineffectiveness about him for that reason.Colgate said that Dies was not the first "outsider" with expertise in the IT area that Freehbrought into the FBI. He said that Carolyn Morris, head of the Technical ServicesDivision in the 1980s, was a non-agent brought in from DOJ to. drive the NCIC project.She had a technical background and was "very good." However, Dies was the first "trueoutsider" in that he was from the private sector, had no US Government experience, andhad a different approach (PC-centric vs. mainframe). Also, Dies was not into "turfissues." He would adopt an existing system if it met the FBI's needs.

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Trilogy started as a system to support the FBI, so the criticism that it doesn't support theIntelligence Community and information sharing isn't really fair. This is a differentmission than the one it originally had. The FBI has to think incrementally. Trilogy maynot solve all of its CT information sharing problems but it's still worth it to the FBI tocomplete the proj ect. The cost overruns and delays are frustrating.FBI as Insular. The FBI was very insular, to the extent that Colgate described the FBIas the fourth branch of Government. Itwas a cultural issue. Colgate said that he toldDeputy Director Bob Bryant to tell Colgate when the FBI decided to join the ExecutiveBranch. Colgate said he told Bryant he realized the FBI would never join DOl Forexample, all FBI employees were cleared and all its communications were classified.This limited the FBI's functionality. Most of what the FBI does is sensitive but notclassified. Maybe the FBI should "wall off' its counterintelligence information, but notthe rest. He thinks they used classification as a way to remain insular. They wouldrefuse to give an AUSA access to the FBI's network because the AUSA wasn't cleared.Colgate saw this as "the ghost of Hoover." Also, the FBI and DEA couldn't query' eachother's systems. Colgate acknowledged that other DOJ agencies have a similarly insularculture, but said that the FBI was "on steroids" in this regard.Impediments to Information Sharing. AG Reno recognized that the FBI wasn't whereit needed to be in this area, nor were state and local law enforcement, and the GlobalInformation Sharing Initiative was a stab at rationalizing this very stove-piped situation.There were terrible turf wars over what entity would get credit for the predicate of aninvestigation and over who would actually run the investigation. The FBI always wantedto be the "lead dog." The issue really comes down to the willingness of the differententities to make their information available to others. Colgate described fourimpediments to information sharing: 1) culture/mentality, 2) structural issues associatedwith handling classified information, 3) trust issues (Hanssen, FBI-CIA difficulties), and4) a disparity between the caliber of folks at the FBI and those at the state and local level.Some at the state and local level have little relevant training and there was a fear on thepart of the FBI that its information would be used for other than what it should have beenused for.DOJ's new Global Information Sharing Initiative [just announced last week] is much likeReno's. There are still too many examples of the right hand not knowing what the lefthand is doing. In the Wen Ho Lee case, for example, some FBI offices had informationthat others needed and never got.There was a constant recognition at DOJ that law enforcement didn't know what it knew.Reno's memos to Freeh in 2000 were evidence of that recognition. Freeh pointed toTrilogy as a fix for this. However, that project took so long to get approved and get goingbecause Freeh was afraid to take things on in increments. He was afraid if he took thatapproach he'd only get a piece of the project approved and he wanted all of it.Mueller's Reforms. Colgate only knows what he's read in the news media aboutMueller's reforms. He knows Mueller very well and feels that the nation is very

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fortunate to have Mueller in charge. Mueller is putting in 1000%. Colgate feels that theFBI needs "a generation to die off' for these reforms to truly take effect. The world oflaw enforcement is a high-testosterone environment, inhabited by a lot of ex-marines, andexpressing doubt was not encouraged. Colgate often saw Freeh as an emperor with noclothes because his people didn't like to bring him bad news. He often heard the badnews from Reno rather than from his own people.Analysis. Colgate felt that DBA had moved more aggressively in this direction than theFBI did. The Bureau realized it needed to develop this expertise, but initially staffedthese positions with a surplus of support personnel who didn't have the fundamentalskills. These were often fingerprint examiners from the FBI's Criminal JusticeInformation Services (CJIS) Division who were out of jobs because of the automation ofthis field. The FBI didn't want to lay off these people. It was "ajoke." Colgate said heforced one Reduction in Force (RIF) of CJIS personnel and the FBI found it very painful.The FBI had the ideathat anyone could fill a support position; these positions wereviewed as fungible. The FBI used to be inhabited by agents and clerks only.1998 Strategic Plan. Reno made it clear to Freeh that CI and CT were the FBI's toppriorities. Freeh always believed that any new mission required new resources. Hewasn't willing to reprogram resources from lower priority mission areas. He was againstdoing that and got himself into a jam because of it. Freeh over-hired and the FBIunderestimated the day-to-day operating costs necessary to support the personnelincreases. Freeh didn't make the necessary tough choices. There were IAFIS cost over-runs because the FBI didn't budget for annual routine operating costs, and the FBI wasover-staffed in the support area because it wouldn't lay people off. All of this ledCongress to conclude that the FBI wasn't managing what it had. Freeh had to freezehiring as a result and had to pull funds from the infrastructure budget to pay forpersonnel.Deputy Director Bryant was thinking along the lines of giving the drug war to the DBAwhich made sense because Bryant's background was more in the national security area(he managed the Aldrich Ames investigation, etc.). Freeh was sensitive to Bryant'sargument but didn't want to give up jurisdiction over anything. The US Secret Servicewas "always trying to hom in" on the FBI's national security mission, eventsmanagement in particular. The ATF tried to encroach on the Waco situation. The

was getting into the public corruption area.Wby DOJ was Unsuccessful at Forcing Cbange at FBI. Colgate described DOJ asbeing like a battleship; it "doesn't tum quickly." The FBI is very insular. He said thatduring Hoover's time, the FBI was "cordoned off' inside the main Justice building. Andit was still the case during Colgate's tenure that DOJ credentials didn't enable access tothe FBI, while FBI credentials did enable access to DOJ. Colgate also stated that Reno'smanagement style was such that she expected everyone to "play nicely." It took a lot forher to confront people on an issue. She believed that in the case of the FBI "it wasn'tbroken quickly" so it likely wouldn't be fixed quickly. She preferred more of anincremental approach. Finally, given all of the ongoing investigations of the Clinton

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white house during his tenure, which Colgate described as being "always a backdrop,"Freeh was "bullet-proof." If the Administration had fired Freeh, Republicans would haveargued that it was retaliation for the investigations. Colgate hastened to add that Freehdidn't deserve to be fired, but even ifhe had, Clinton couldn't have done it under thecircumstances.Colgate asserted that the FBI should make criminal investigative decisionsindependently, but should not be completely independent of White House or DOJdirection. Freeh had a misconception on this point. The Executive Branch's ability todirect the FBI was impeded as a result. Reno used independent counsels a great dealwhich helped, but the White House was unwilling to assert its leadership given itssituation. White House staffers were interviewed by the FBI "every time they turnedaround." Freeh thought William Webster did the best job of balancing in this situation.He was able to investigate the President's brother (Billy Carter), but at the same timetook policy direction from the Executive Branch.Colgate said he butted heads with Freeh and thought he was a "lousy manager," but Freehknew the FBI had to modernize and develop its analytical side. Freeh should have mademore bold decisions, but in the context of the time the FBI did make progress. Freeh hadto deal with several scandals that were not of his own making. He made a lot ofsignificant improvements but wasn't willing to address the FBI's insular nature.u.s. Federal Law Enforcement. Colgate believes that to fragment federal lawenforcement the way we have in the United States has been a mistake and that no onewould intentionally design such a structure. He is pleased that Customs and INS are nowunder one roof at DHS, and he thinks that maybe one day we we'll have a border securityagency.FBI Organization. To create an "MI-5" would be a "mistake." "You would losedecades." "Look at the DHS debacle." If the FBI had a strong analysis and informationtechnology capabilities, it could see how seemingly unrelated events might come togetherin a criminal or a counterterrorism investigation. If the FBI is pulled apart, informationsharing will be more difficult. Colgate said during his tenure at DOJ he supportedmerging the Drug Enforcement Agency (DEA) and the FBI, and thought that VicePresident Gore supported it as well. However, AG Reno was against the idea, saying itwould cost $100 million and take ten years due to the different cultures and structures,and we'd lose a lot in the war on drugs in the short term.He said if we propose a "service within a service" restructuring of the FBI, we should getthe FBI out of the drug area. He's guessing that such a service will be the "compromise"that ultimately is arrived at for the FBI (i.e., a compromise between staying the courseand creating an MI-5), and when pressed he said he supports such a reorganization. Hesaid he liked the idea of agents being dedicated to national security for their entire careersmuch like the foreign service. Colgate thinks that Mueller would leave the FBI if an MI-S were created. He said that creating a "service within a service" will be hard, becauseyou don't want agents perceiving that one career track is preferable to the other. There

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will be retention, attraction, and morale issues. You cannot have one entity perceived asthe "weak sister" of the other. Bureaucracies are very "turf conscious" so you willalways have walls. It's human nature. You need a superstructure and governingmechanism to deal with these issues and preserve the ability to move resources. If theFBI is divided into two separate entities doing so becomes that much harder.FBI Counterterrorism. While Colgate was at DOJ, he saw CT as important. DaleWatson spent more time with AG Reno than anyone else at the FBI. Counterintelligencewas going through a transition. The FBI felt proud of catching Aldrich Ames, but had a"black eye" with the Robert Hanssen espionage case. The Bureau reprogrammedresources (i.e., special agents) out of the CI area because the Cold War was over.International Radical Fundamentalism was new.Role of the DCI. Colgate believes the DCI's role has been too "figurative." He wouldgive the DCI "real teeth" and would allow the DCI "a lot" more involvement in terms ofsetting priorities and further defining the difference between domestic and foreignterrorism. The DCI might have less influence over purely domestic or home-grownterrorism. He said we would have to be mindful of civil liberties issues, however, andmentioned the Church Commission. Colgate thought that with proper oversight and aDOJ role such a structure could be properly managed. It would be difficult, but it couldbe done.Security vs. Liberty. Colgate was the chair of the "Carnivore" review committee. Hethought Carnivore (the FBI's internet wiretapping technology) was a "great tool." Itwasused only on lawful, approved intercept orders, but it was described in the news as "bigbrother." The report on Carnivore that the FBI commissioned of the lIT ResearchInstitute (IITRI) recommended that the system have additional audit capability because itwas capable of collecting information outside the wiretap parameters. Colgate thoughtthis was a good idea. When electronic surveillance (ELSUR) first came into being in1968, federal agents would actually "clip into" the line. They sometimes wouldn'trealize right away that they actually were listening to the wrong person. There was noway to independently monitor who the federal agents were listening to, when, and forhow long. With Carnivore, you could see how the surveillance really was beingconducted. So American citizens had less privacy when ELSUR was first used than theydid with Carnivore.Now, the whole discussion on this topic has changed. Now people want to know whyCarnivore is not used more. Reno was criticized for increasing the number ofFISAorders and now it's a badge of honor. Three-quarters of the USA PATRIOT Actprovisions were old proposals DOJ lawyers likely pulled off of the shelves and dustedoff, and they wouldn't have passed but for 9/11. Now the pendulum is "swinging back."