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Highlights of the Interview:

WILLIAMS: Skip Brandon served as the assistant FBI director of counterterrorism. His company, Smith Brandon International, now does intelligence and security consulting for international businesses. (...)

Mr. Brandon, has the FBI fixed these fundamental problems? Has Bob Mueller, since he came in, has he been able to repair these problems that Dr. Rice was talking about?

SKIP BRANDON, FORMER ASSISTANT FBI DIRECTOR OF COUNTERTERRORISM: I think he's done a great repair job. It probably is not all done because it is going to take a little time. It is interesting, what Neil said. And he was recently as a month ago meeting with an old colleague from MI5.

They continue to say that they think that our structure is much better, where you can do both intelligence collection and then if, it is appropriate, enforce the law. (...)

WILLIAMS: Mr. Brandon, we've just created the Department of Homeland Security, a big bit of reorganization. Is Congress likely to create a whole new part of this apparatus with a domestic intelligence agency?

BRANDON: I think they're going to be some hesitations. Unfortunately, sometime this is the bureaucratic response to addressing a problem. Let's make a new agency. What they would do is simply recreate a part of what is now the FBI. That doesn't make any sense to me. (...)

For the full interview see below.

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GUESTS: (...) Skip Brandon; Tom Shales

(...)

PETE WILLIAMS, GUEST HOST: (...) Coming up, should the FBI Remain in charge of domestic terrorism intelligence? We'll debate that with Skip Brandon and Neil Livingstone.(...)

Should the FBI remain in charge of domestic intelligence or should a separate agency be crated to track terrorist cells inside the U.S.? That's one of the big questions facing the 9/11 Commission. And it will be explored next week when the former FBI Director Louis Freeh and the former Attorney General Janet Reno return to Washington to face questions.

Yesterday, National Security Adviser Condoleezza Rice said the government's own information gatherers before 9/11 were tied in knots.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: In hindsight, if anything might have helped stop 9/11, it would have been better information about threats inside the United States, something made difficult by structural and legal impediments that prevented the collection and sharing of information by our law enforcement and intelligence agencies.

(END VIDEO CLIP)

WILLIAMS: Skip Brandon served as the assistant FBI director of counterterrorism. His company, Smith Brandon International, now does intelligence and security consulting for international businesses. And Neil Livingstone this is the CEO of Global Options. He is also a terrorism expert.

Mr. Livingstone, why can't the FBI handle the domestic intelligence assignment, in your view?

NEIL LIVINGSTONE, TERRORISM EXPERT: Well, they can, but it is probably not the most efficient way of doing it.

The British long ago decided to divide their domestic intelligence from their international intelligence. Most countries in the world do that. And I'm not sure that we have a viable intelligence operation over at Homeland Security. We have a very fragmented intelligence community. And many of my friends at FBI are saying, come on, we're cops. This is different than being a spook and that that is a very uneasy situation under one roof. And we can talk about many of those reasons.

WILLIAMS: Well, the FBI also says that that is an advantage, that they're cops, that they're out there gathering evidence and if they come across something that might suggest a terrorism operation, there they are ready to go.

LIVINGSTONE: Well, it is and it isn't.

First of all, they have problems right now. They're saying, we're very weak on enforcement in many areas right now because we're spending all this time trying to collect intelligence, as well as to be law enforcement officers. The second thing is, oftentimes, when you get down in the gutters with terrorists and so on, you're with very unsavory people. And you're -- you don't want to arrest those people necessarily because you may want to turn them into an asset.

And that's often a very difficult distinction to make.

WILLIAMS: They say they do the same thing with the mafia, that that is not -- no more difficult.

LIVINGSTONE: Well, I think, "they said." I think some people believe that they can do that. And I certainly respect Skip and others that have been in that institution.

But I don't think it is the most efficient way of doing it. And I think there are inherent conflicts. And we saw those prior to 9/11. And I don't think they've all been fixed.

WILLIAMS: Mr. Brandon, has the FBI fixed these fundamental problems? Has Bob Mueller, since he came in, has he been able to repair these problems that Dr. Rice was talking about?

SKIP BRANDON, FORMER ASSISTANT FBI DIRECTOR OF COUNTERTERRORISM: I think he's done a great repair job. It probably is not all done because it is going to take a little time. It is interesting, what Neil said. And he was recently as a month ago meeting with an old colleague from MI5.

They continue to say that they think that our structure is much better, where you can do both intelligence collection and then if, it is appropriate, enforce the law.

WILLIAMS: Explain what MI5 is.

BRANDON: That's British domestic intelligence.

WILLIAMS: So they do it differently. How is it different?

BRANDON: They are strictly intelligence collectors. They have no law enforcement training or they don't have any law enforcement powers. If they run into a violation of a law or they get a terrorism matter, for instance, to a point where they want to, they need to take law enforcement action, then they have to turn it over to another agency who, in some cases, almost have to start all over again.

WILLIAMS: Here's an interesting statistic that I saw this week. When a new agent graduates from the FBI Academy, according to the Congressional Research Service, only about 12 percent of that agent's training is devoted to terrorism and counterintelligence. If, as Bob Mueller, says, the new mission of the FBI, priority No. 1 is counterterrorism, then why are they only training on their agents on that issue for 12 percent of the training?

BRANDON: My understanding is that that is probably dated information. This is a work in progress. There's no question about that.

He's now saying that, when agents come out of the academy, they'll go to one of the smaller offices and in their first three years, they will spend at least one-fourth their time in intelligence work. And, in fact, now to be promoted in the FBI, you have to have spent enough time and taken enough training to qualify as an intelligence officer.

WILLIAMS: One of the other things that the CRS, Congressional Research Service, report says this week is that if the FBI was really serious about reforming and getting serious about counterintelligence, it would have a career track in the FBI for intelligence officers, which it doesn't have. Is that a bad sign?

BRANDON: No, it's a not bad sign at all. What they are going to do is combining -- are they are doing is combining the two disciplines, intelligence connection -- collection and investigations.

And they're pushing them together. In fact, they have built a career track which is now in place, just recently in place for intelligence analysts. They've hired over 1,000. They've brought over 500 new intelligence analysts and created almost 1,000 internally already. There is a career path in place now.

WILLIAMS: Mr. Livingstone, one of the criticisms of the CIA, the FBI, the Secret Service, Customs, everybody, since before 9/11 was the -- quote -- "failure to connect the dots." How does adding another player on the scoreboard improve the situation? Doesn't that just give you more dots that have to be connected if you have a separate intelligence agency?

LIVINGSTONE: Well, Pete, one of the problems we have today is that we have very fragmented intelligence community. And by its very nature, people like the put their arms around their own assets. And they don't like to share unless they absolutely have to.

But I think the real issue here is, we give all international intelligence in effect to the director of central intelligence. That works better in theory than in practice, as we learned. But he has a whole variety of assets that are not just purely in the CIA and is supposed to coordinate this. I think there should be a domestic counterpart to that.

And this idea of creating a Homeland Security Department intelligence capability has not been very successful thus far. They've had to go through over 20 people to find a director. And even today, there's not the kind of sharing that we need on a domestic front. This would make it better.

WILLIAMS: Where would you put -- where would you put this? Under the CIA? Completely independent? Part of homeland? Where?

LIVINGSTONE: I think it should be an independent agency. And it should -- and I would increase the powers of the CIA director. I've always believed the DCI should be indeed the director of central intelligence. And, therefore, the coordinator of all intelligence probably should be a Cabinet post as well. That way, then you have a domestic counterpart. You have an international counterpart. You have a series of agencies that have to report to a central authority.

WILLIAMS: Mr. Brandon, we've just created the Department of Homeland Security, a big bit of reorganization. Is Congress likely to create a whole new part of this apparatus with a domestic intelligence agency?

BRANDON: I think they're going to be some hesitations. Unfortunately, sometime this is the bureaucratic response to addressing a problem. Let's make a new agency. What they would do is simply recreate a part of what is now the FBI. That doesn't make any sense to me.

If something is broken, you fix it. Creating a new agency doesn't address that. I think we can look at homeland security. They're still having a real tough time.

WILLIAMS: Well, there may be some rocky days to come for the FBI before this 9/11 Commission, don't you think?

BRANDON: Oh, I think so. There are going to be questions to be answered. There are questions to be answered all the way around.

I would say, for example, I think we also ought to be looking at the whole picture. What was the role of Congress before 9/11? Were they active in making the appropriate appropriations? Were they giving the people the resources they needed?

(CROSSTALK)

WILLIAMS: One question Congress will not be asking itself.

BRANDON: That's right.

WILLIAMS: Gentlemen, thank you very much, Skip Brandon and Neil Livingstone.

(...)