RONALD KESSLER, AUTHOR, "THE BUREAU: THE SECRET HISTORY OF THE FBI": Good to be with you, Lou. DOBBS: As we look particularly -- I'm going to begin with the Phoenix memorandum, which I find remarkable. Does it first surprise you that that kind of terrific deductive work could have just been so badly applied by the middle management of the FBI? KESSLER: No, unfortunately. One big problem is the computers. Under Louie Freeh, the FBI had 386 and 486 machines that people wouldn't -- churches wouldn't even take as donations. Things were so bad that FBI cars were actually parked for four months -- or about half of them were because there wasn't money to pay for gasoline. That's how badly Louie Freeh mismanaged the bureau. And so when it comes to counterterrorism, there are some 93- million pages of documents, going back 10 years, which were either not on computer or in computers where you couldn't punch in "flight school," and no one person can read all that material, of course. So they needed computers, they needed analysts, they needed more focus, and none of that was provided under Louie Free. DOBBS: The question is why not. He had worked six years as an FBI agent. He certainly had an appreciation for the value of the FBI, the importance of its work. KESSLER: It was a surprise, you know, and he was a prosecutor, a judge. He had this very stubborn attitude. He didn't want to hear advice from the veteran agents. He also discouraged bad news. He didn't want to hear about problems. So, of course, before you knew it, nobody told him anything. And what he would do primarily is micromanage a few high-profile cases where he would look good in the headlines the next day. He screwed up a lot of those, like Wen Ho Lee and Richard Jewel. He was very good at manipulating Congress, making himself look good there, but, in the end, we now see the results. The FBI is in a shambles. DOBBS: And you -- didn't mention Robert Hanssen. KESSLER: That's right. With Hanssen, Louie Freeh turned down a recommendation to have the counterintelligence to polygraph all agents back in '94. If he'd accepted, I'm quite sure that Hanssen would have stopped his spying. But, with all that said, it's also important to recognize that none of these snippets that have come out would have actually led directly to the plot. It was great that the agent in Phoenix was suspicious enough to write this memo. That memo should have been given much more attention, but it was simply speculation. Well, there were Middle Easterners going to flight schools. Well, of course, that is the way the world learns to fly, they come to our schools, and there was nothing really beyond that except what one or two had some allegiances to bin Laden. But if they had started into the Arabs because they're going to flight schools back then, before September 11th, you can imagine the outcry when there even were objections after September 11th to interviewing 5,000 Middle Easterners. These things all should have been brought together, but, you know, to say that there is one smoking gun that was overlooked is just not correct. DOBBS: Yeah, I think -- certainly, I agree with you in that regard. However, I also strongly believe that a memo written by an agent in Phoenix recommending that those in flight schools from the Middle East be investigated -- that's pretty -- that's awfully good detective work and deserving of greater investigation, I would say, at least. KESSLER: Yes, definitely.
In 2001, the FBI had only 6% of its agents dedicated to "counter-terrorism" which is about 1,300 agents. Louie Freeh said that he needed more money in order to expand this area of the bureau. In 2000, Freeh asked Congress for a budget increase of $360 million and over 800 new positions. In 2000, Congress approved a $6 million dollar increase in the FBI's budget, and 5 new positions. So Freeh appears to blame Congress and Janet Reno for the failures of the FBI. Reno went on to respond that while the FBI never seemed to have sufficient resources, "Director Freeh seemed unwilling to shift resources to terrorism from other areas such as violent "street" crime." Moreover, creation of a new Investigative Services Division in 1999 was a failure, the commission said, adding that 66 percent of the FBI's analysts were "not qualified to perform analytical duties." A new counterterrorism strategy a year later again fell woefully short, and a review in 2001 showed that "almost every FBI field office's counterterrorism program was assessed to be operating at far below `maximum capacity.'" "The FBI's counterterrorism strategy was not a focus of the Justice Department in 2001," the first year of the Bush administration, the commission said. Additionally, on September 10th, Attorney General John Ashcroft rejected an appeal from former acting FBI Director Thomas Pickard for additional funding.