By Dan Eggen and Walter Pincus
Washington Post Staff Writers
Thursday, June 30, 2005; A01

President Bush ordered another shake-up of the nation's intelligence services yesterday, forming new national security divisions within both the FBI and the Justice Department and, for the first time, putting a broad swath of the FBI under the authority of the nation's spy chief.

Building on previous changes required by Congress, the reorganization cements the authority of the new director of national intelligence, John D. Negroponte, over most of the FBI's $3 billion intelligence budget. It also gives him clear authority to approve the hiring of the FBI's top national security official and, through that official, to communicate with FBI agents and analysts in the field on intelligence matters.

The plan represents a particularly sharp rebuke to the historically independent FBI, which has struggled to remake itself into a counterterrorism agency since the Sept. 11, 2001, attacks and has been the target of withering reviews from both inside and outside the government. The moves also mark a victory for the CIA, which has endured its own blistering critiques but has successfully fought off proposals to cede some of its authority to the Pentagon.

Civil liberties advocates immediately criticized the changes at the FBI, arguing that they represent a radical step toward the creation of a secret police force in the United States. Many Justice prosecutors and FBI agents had also fiercely opposed the changes but were overruled by Bush's homeland security adviser, Frances Fragos Townsend, officials said.

"Spies and cops play different roles and operate under different rules for a reason," said Timothy Edgar, national security counsel for the American Civil Liberties Union. "The FBI is effectively being taken over by a spymaster who reports directly to the White House. . . . It's alarming that the same person who oversees foreign spying will now oversee domestic spying, too."

Attorney General Alberto R. Gonzales and FBI Director Robert S. Mueller III played down such concerns. Although Bush's memo gives Negroponte's office authority over the FBI's intelligence program, they said, he will not exercise authority over traditional criminal investigations conducted by the bureau.

"They're not going to be directing law enforcement," Gonzales said at a news conference. "Every law enforcement official within the FBI is going to remain under the supervision and authority of the FBI director and, ultimately, the attorney general."

As outlined in a memorandum to senior Cabinet officials, Bush adopted all but four of 74 recommendations made by a special intelligence commission headed by senior appellate judge Laurence H. Silberman and former senator Charles S. Robb (D-Va.). Although originally formed to examine intelligence failures in prewar Iraq, the panel chronicled broader shortcomings in the intelligence community's ability to monitor or prevent threats from terrorists or rogue states.

Bush also ordered the creation of a National Counter Proliferation Center, aimed at helping to combat the spread of weapons of mass destruction to terrorist groups and rogue states. In addition, a separate executive order released yesterday allows the freezing of assets of individuals, groups or companies allegedly involved in weapons proliferation, including eight specific organizations in Iran, North Korea and Syria.

The plans announced by the administration yesterday mark the latest in a series of reorganizations, new agencies and other changes that have roiled the government since the Sept. 11 attacks. In addition to the creation of the Department of Homeland Security, the FBI previously created a Directorate of Intelligence and has expanded the number of agents, analysts and other staff members dedicated to counterterrorism and counterintelligence.

Under Bush's memo, the FBI will create a National Security Service by bringing together its counterintelligence, counterterrorism and intelligence divisions under one umbrella. The head of the new service will be hired by the FBI director and the attorney general, but with the "concurrence" of Negroponte, who will fund the FBI's intelligence activities. The memo said that Negroponte, "through the head of the FBI's National Security Service, can effectively communicate with the FBI's field offices, resident agencies and any other personnel in the National Security Service."

Across Pennsylvania Avenue at the Justice Department, Gonzales will also pull together several intelligence and counterterrorism operations to form a new national security division, and Bush will ask Congress to allow the hiring of a new assistant attorney general to run it.

Mueller said he views the changes as "the next step in our ability to protect the American public."

"I don't see it as a loss of independence at all," he said. "I see it as an acknowledgment and a furtherance of the development of the FBI to respond to the threats of today."

At the White House, Townsend said that many of the changes ordered yesterday were outgrowths of the Intelligence Reform Act approved by Congress in December, which created Negroponte's office and called for other changes in the intelligence community.

"The agencies did not approach this as a zero-sum game where some won and some lost," she said.

Negroponte's deputy, Air Force Lt. Gen. Michael V. Hayden, told reporters that the FBI's new service is "something we've not done before as a nation" but also said that Mueller's deputy already sits in with other intelligence agency managers at meetings with the director of national intelligence. The new FBI national security official will be "dual-hatted" and will report to both Mueller and Negroponte, he said.

Many details of the new plan remain to be worked out. Bush's order gives Gonzales 60 days to come up with an implementation plan.

Many of the dozens of changes recommended by the Silberman-Robb commission dealt with details of intelligence analysis, training and sharing of information. Hayden said that 30 initiatives relating to intelligence analysis, including many commission recommendations, have already been initiated. For the CIA, a new official will oversee human intelligence operations overseas by all agencies, including the FBI and the Pentagon.

Townsend said three commission recommendations required further study, including a finding that three agencies should be held accountable for failures on prewar intelligence in Iraq. Another recommendation, which was not identified because it is classified, has not been adopted, she said.