FBI expands domestic-intelligence role

WASHINGTON - The FBI is dramatically expanding its intelligence role in the United States and is seeking control over the CIA's domestic activities, according to current and former intelligence and law enforcement officials.

At stake is control over a pool of U.S.-based intelligence assets and information that has been invaluable in the past to understanding the intentions of foreign nations and groups.

FBI director Robert S. Mueller III is pushing to rewrite the rules under which the CIA and FBI have operated domestically for decades and to assert what he views as the FBI's proper authority over all domestic intelligence gathering as part of a vast, but slow-going, restructuring of the bureau to focus on counterterrorism.

But for decades, the CIA has been allowed under U.S. law to recruit foreign officials, business executives and students living in or visiting the United States to spy for the agency when they return home. CIA case officers working in the National Resources Division, which has stations in major U.S. cities, routinely debrief, on a voluntary basis, U.S. business executives and others who work overseas.

The CIA is generally viewed across the U.S. intelligence community as more experienced and skilled at handling foreign assets, who eventually return abroad where the CIA leads in intelligence gathering and operations.

Under an executive order signed in 1981, the CIA is prohibited from spying on or conducting operations against U.S. citizens in the United States.

FBI and CIA counterterrorism and counterintelligence officials have been in heated debates the past few weeks, trying to hash out a new "memorandum of understanding" on domestic intelligence gathering. Mueller had endorsed a draft MOU in December which was rejected by CIA director Porter Goss as too far-reaching. The meetings were first reported by the Los Angeles Times.

So far the two sides, which are officially portraying the discussions as an effort to better coordinate domestic intelligence, have made little progress, said intelligence and law enforcement officials. Mueller and Goss plan to meet on the matter soon, administration officials said.

"We're trying to put some coordinated structure to it so we don't trip over each other or expose one another's assets," said one FBI official.

"We believe that neither agency should have complete responsibility for domestic collection," said a CIA official. "Instead, responsibility should be divided in a way that takes advantage of each agencies' strengths."

In the past year, the CIA and FBI have sought to vastly expanded the use of multinational corporations to recruit Americans willing to share information from their trips abroad. The CIA is also making a big push to embed its own spies in U.S. companies doing business overseas, but only with a company's knowledge and permission.

The agencies are seeking to deepen their outreach to U.S. research and academic institutes, and subcontractors for major government contracts.

The FBI has also created intelligence squads for each of its 56 field offices around the country, a departure from the days when such squads were found only in larger offices like Los Angeles, New York and Washington. These squads find and cultivate Americans traveling overseas. The bureau has began, as well, to beef up its agents in U.S. embassies abroad to collect intelligence from assets it established in the United States.

Mueller also wants to put the FBI in charge of disseminating all intelligence reports from sources - foreigners or U.S. citizens - living in the United States. Currently, the agency that collects such information is responsible for disseminating it. FBI officials say putting the bureau in charge would avoid duplication and confusion. CIA and other intelligence officials note that the FBI is still frequently behind in disseminating its reports, and several months ago had a backlog of more than 100 terrorism reports it had not yet distributed. Many of those reports are not outdated.

Former and current CIA officers and other intelligence officials said the FBI, which is still struggling to set up an intelligence gathering department, is not yet ready to assume the lead role in domestic intelligence and is inexperienced in handling foreign assets whose real value is their work overseas, where the CIA runs intelligence gathering.

Taking control of the foreign intelligence-gathering role in the United States "is a bit ambitious for an agency that is just now building it's intelligence capacity," said an administration official familiar with the discussions. "The CIA has been collecting foreign intelligence for over 50 years and has the skills, ability and reserves to do the job."

The FBI argues that existing statutes have long given the FBI the ability to conduct such operations. "We always had that ability; it's whether we exercised it or not ... We now have a much more robust counterintelligence program and we don't want to lose opportunities to obtain information."

One FBI official said the bureau is now interested in tackling more responsibilities because it is rebuilding its intelligence program. The FBI now has a senior executive overseeing intelligence and analysis operations and is struggling to attract a trained cadre of analysts.

For the first time last year, the FBI implemented a comprehensive set of rules for its foreign counterintelligence program, following the launch of similar guidelines for its counterterrorism program in late 2003, officials said last week.

FBI officials cited examples of possible new bureau activities which include the recruitment of foreign nationals working at embassies and the United Nations, interviews of business executives with extensive trade overseas and more intensive monitoring of suspected dual-use technologies sought by the Chinese military and other powers, the official said.

All of these activities are what the CIA's National Resources Division has been doing for decades.