FBI ADMITS SEPT. FAILURES, REORGANIZES TO FIGHT TERROR

Director Acknowledges That Bureau Might Have Prevented Attacks; 'A Turning
Point For The FBI'; Better Data Analysis, A Flying Squad Of Agents And
Power In Washington

WASHINGTON - FBI Director Robert S. Mueller III acknowledged yesterday for
the first time that the bureau might have prevented the Sept. 11 attacks if
it had aggressively followed up on all the warning signs that filtered into
the agency's headquarters before the attacks.

"Putting all the pieces together, who is to say?" Mueller said, noting that
those warning signs amounted to "snippets in a veritable river of information."

"The jury is still out on all of it," he said. "Looking at it right now, I
can't say for sure ... that there wasn't a possibility that we could have
come across some lead that would have led us to the hijackers."

His comments were the first time a senior administration official has
conceded that federal investigators might have prevented the attacks had
they properly analyzed what Mueller called "red flags" that arose in the
months and years before Sept. 11. A congressional committee is
investigating that issue and will begin hearings next month.

"There were a number of things that organizationally should have happened,"
said Mueller, who took over the FBI a week before the attacks. He said the
Justice Department's inspector general will look into whether any bureau
employees should be punished.

Mueller's statements to reporters came after the FBI announced, under
severe pressure, that it would drastically reshape its "structure, culture
and mission" to make its top priority the prevention of terrorist acts
against Americans.

The FBI director unveiled a number of far-reaching changes in light of the
bureau's failure to act on indications before Sept. 11 that terrorists
might be planning to hijack commercial jets.

For months, Mueller has been reorganizing the bureau, pressing for more
funding and updated technology. Yesterday, Mueller disclosed details of the
FBI's ambitious plan to cut back on its century-old mission of enforcing
federal law and solving interstate crime. Now, the bureau will concentrate
its resources on rooting out terrorists before they strike.

"The events of Sept. 11 marked a turning point for the FBI," Mueller said.
"It was clear that we needed to fundamentally change the way we do our
business."

The effort will essentially shift the bureau's center of power away from
the field offices and pull it back toward the Washington headquarters. The
idea has met with resistance from some field officers, who worry that it
would mean more bureaucratic inefficiency.

Mueller said plans call for nearly 700 agents to join several newly created
sections authorized to analyze intelligence and field reports to glean
patterns of terrorist activity. In the next few weeks, 25 CIA analysts will
be permanently transferred to the bureau to help perform that task.

The reorganization plans also call for a "flying squad" of agents who would
be based in Washington but could be deployed quickly in the United States
or abroad should there be another terrorist attack.

Mueller cautioned that the bureau would not stop solving crimes that have
long been its mainstay - bank robberies and organized, white-collar and
violent crimes. But it will redirect more than 25 percent of its agents to
focus on terrorism. Many of the resources needed to make this happen will
be siphoned from bureau efforts to combat drugs.

At least 400 agents previously assigned to investigate drug cartels will
move to anti-terror units, with the expectation that the Drug Enforcement
Administration will pick up the slack.

Asa Hutchinson, the DEA director, said his agency "stands ready to accept
this new challenge. This is a new opportunity for the courageous men and
women of the DEA to do even more for our country." He said, though, that
the drug agency would likely have to seek additional federal funding.

The FBI has come under fire in recent weeks after two memos surfaced
suggesting that the agency missed warning signs of the September attacks
because of bureaucratic bungling.

The first memo, written last summer by an agent in Phoenix, warned that
Osama bin Laden might be sending operatives to train at U.S. flight
schools. It was not heeded by senior FBI officials in Washington.

The second memo, written less than two weeks ago by Coleen Rowley, an FBI
counsel and longtime agent in Minneapolis, charged that officials in
Washington thwarted the repeated attempts last summer of Minneapolis agents
to obtain a warrant to search the computer and home of Zacarias Moussaoui,
who is thought to have been the intended 20th hijacker.

Rowley's memo accused senior FBI officials, and Mueller in particular, of
skewing the facts in recent months about the FBI's handling of the
Moussaoui matter and of denying that the bureau had received warning signs
in advance of Sept. 11.

The FBI director also revealed two other instances in which, he conceded,
the bureau missed possible danger signs.

One was a memo an FBI pilot wrote from Oklahoma in 1998 alerting officials
that an inordinate number of Arab men were seeking flight training. The
pilot also speculated that planes could be used to spread chemical or
biological agents.

Another memo, written at an undisclosed time, sought to alert senior FBI
officials that a "restricted country" - one that either has ties to
terrorist groups or is barred from buying certain American goods - tried to
buy a commercial flight simulator. Several hijackers practiced on flight
simulators in preparation for Sept. 11.

In an almost apologetic tone yesterday, Mueller thanked Rowley for her
blistering memo, saying that it was "critically important that I hear
criticisms of the organization, including criticisms of me."

Responding to the specifics of her memo, Mueller said he never
intentionally skewed any facts. But he acknowledged that his initial
statement that the bureau did not know that terrorists could be using
flight schools was wrong. He said he was made aware of the Phoenix memo
only after he had made that statement last fall.

Mueller's sweeping plans to reshape the FBI's mission reflected the effect
of the Phoenix and Minneapolis memos. Initially, Mueller had said the focus
of his reorganization would be hiring 1,000 new agents, replacing 25
percent of bureau officials, revamping language skills and modernizing
technology within the agency in the wake of the case of Robert P. Hanssen,
the FBI agent turned spy.

Mueller is held in high regard on Capitol Hill and within the agency.
Still, some in the FBI and outside question the wisdom of centralizing more
power at headquarters, where ideas are sometimes stifled.

"The power in the FBI has always naturally gravitated toward the powerful
field offices," said Melvin Goodman, a former CIA agent who heads an
intelligence reform project for the Center for International Policy.

"All FBI directors have wanted to accumulate that power, and Mueller is
just another example of a director trying to do that. It's a constant
temptation. But at headquarters are the people who don't take risks."

In 1995, the FBI tried with difficulty to hire 75 analysts after the first
World Trade Center attack, said Robert Blitzer, who headed the FBI's
counterterrorism unit until 1998.

"The process of recruiting, training and vetting analysts takes years," he
said. "Frankly, I think you need a large group of analysts in the field
[offices] to support the agents every day."

By centralizing more of the bureau's power and revamping its mission,
Mueller faces criticism that he is building a national intelligence agency,
akin to a national police force or the Soviet Union's KGB, an idea that has
never sat well with most Americans.

Rep. Porter J. Goss, the Florida Republican who chairs of the House
Intelligence Committee, which will help oversee the congressional
investigation, welcomed the FBI's reorganization plans. Goss said he does
not want the FBI to become the dumping ground for analysts the CIA doesn't
want.

"There is a lot of interest by everyone in the bureau," over the changes,
said Special Agent Peter A. Gulotta Jr., a spokesman for the FBI's
Baltimore office. "What will we be doing, where will we be working? You
could be working bank robberies for 10 years and find yourself working
terrorism.

"That is the nature of our job. You grin and bear it, and you learn to like
it. But we're in for some interesting times ahead."