WASHINGTON - President Bush implemented measures yesterday designed to strengthen the hand of National Intelligence Director John D. Negroponte and establish a domestic intelligence service at the FBI.
With the changes, Bush accepts virtually all the recommendations made this year by a presidential panel that investigated U.S. intelligence failures in Iraq.
The most significant change would create a National Security Service within the FBI. The office will be a clandestine service, in effect a mini-CIA within the Justice Department, aimed at protecting the country against terrorist threats.
Bush also directed Negroponte's office to establish a National Counter Proliferation Center. It would coordinate government efforts to curb the proliferation of nuclear, chemical and biological weapons.
White House officials said the president had endorsed 70 of 74 recommendations of the commission led by U.S. Circuit Judge Laurence Silberman and former Sen. Charles S. Robb of Virginia. The panel investigated the failures that led the administration to conclude that Iraq possessed weapons of mass destruction.
Bush's homeland security adviser, Frances F. Townsend, who conducted a 90-day review of the commission report, told reporters at the White House yesterday that "it's a fundamental strengthening of our intelligence capabilities."
The FBI's new National Security Service would be built on the bureau's existing intelligence, counterterrorism and counterintelligence divisions. But Negroponte will oversee its budget.
According to a former intelligence official who advised the White House, FBI Director Robert S. Mueller III intensely resisted the creation of the new office. Mueller argued that the FBI's creation of an intelligence division in 2003 made the new office unnecessary.
But the former official, who spoke on condition of anonymity, said White House aides concluded that the FBI had not done enough to collect intelligence against domestic terrorist threats.
Briefing reporters at the Justice Department, Mueller said the FBI regards the creation of the new office as "a gain."
"I do not see it as a diminishment of authority," he said. "And I see it as the next step in the evolution of the FBI as it becomes better prepared to address the threats of the future."
Bush also ordered the establishment of an office at the CIA, but under Negroponte's direction, that would work to improve the quality of information gathered by agents working for U.S. intelligence agencies.
Gen. Michael V. Hayden, the deputy director of national intelligence, said the office would have 50 to 100 employees.
Negroponte was ordered to establish another office at the CIA to cull information from public sources around the world. The new office is designed to strengthen the government's existing monitoring of overseas newspapers, radio, TV and Web sites. Hayden said the office would give U.S. intelligence officials better information about the cultural, economic and political context of the secrets they obtain. In that case, Hayden pointed out, "you may discover you don't have to steal so much."
In an effort to force U.S. intelligence agencies to act more like a community, Negroponte is to appoint "mission managers" to coordinate U.S. intelligence in key hot spots, such as Iran and North Korea.
Hayden said the concept is one that Negroponte would have instituted with or without prodding from the presidential commission.
Several other policies are aimed at blending analytic and collection efforts among all 15 intelligence agencies - and getting them to meaningfully share the intelligence they collect.
Hayden acknowledged that there are still impediments to integrating these intelligence efforts. But he said he and Negroponte were looking for ways to get intelligence officers to serve in more than one agency and to merge training of intelligence officials.
One way that will be done, he said, is through a new National Intelligence University.
Among three commission recommendations that the White House postponed action on was a proposal to hold U.S. agencies accountable for botching the intelligence on Iraq's weapons programs.
The only recommendation Bush rejected outright was a classified proposal to shift planning for covert operations away from the CIA and place it instead under the new National Counter Proliferation Center and the National Counterterrorism Center, created last year.
"There were persuasive and strong arguments made against doing that," said Townsend who declined to elaborate. She said the CIA's efforts to overhaul its operations make it a better home for covert action planning.
Adm. William O. Studeman, a member of the commission and a former director of the National Security Agency, said he was confident the administration could work out the details of the covert proposal.
If history is any guide, yesterday's announcement may have been the easy part in changing the way U.S. intelligence operations work.
In its March 31 report, the commission took pains to acknowledge that U.S. intelligence agencies have "an almost perfect record of resisting external recommendations."
While heralding his commission's .950 "batting average" in getting its recommendations adopted, co-chairman Robb said in a statement, "The implementation won't be easy."
Former intelligence officials said that putting the plan into effect represents an important opportunity for Negroponte to capitalize on momentum for change in a community historically steeped in inertia.
"The healthy outcome of this is that the public sees John Negroponte taking charge; this is an opportunity for John Negroponte to assert his authority," said one former intelligence official, speaking on condition of anonymity for fear of antagonizing his current employer.
Negroponte did not appear at yesterday's briefings held by his office. Instead, Hayden, a former NSA director, answered questions from reporters.
The latest overhaul does little to answer persistent questions over how much of the intelligence budget Negroponte controls, said Ron Marks, who spent 16 years at the CIA.
"The budget authority, when all is said and done, is going to come down to a fight between Negroponte and Defense Secretary Donald Rumsfeld and the Office of Management and Budget and the president," Marks said. "That issue has not been resolved yet."
One early test of Negroponte's power will come when a new head of the NSA is named.
Studeman said authority over the intelligence community is up to Negroponte "to seize."
"The secretary of defense and the director of national intelligence are going to forever live with their hands in each other's pockets," he said.