The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight: A summary of the news; the latest on Yemen's North Korean Scud missiles; a report on the effort to reform the public schools of Philadelphia; and Senators Graham and Shelby on today's Congressional findings about pre-9/11 intelligence problems.

NEWS SUMMARY

JIM LEHRER: The U.S. Navy released a ship carrying North Korean missiles today, off the Arabian Peninsula. The missiles were bound for Yemen. A patrolling Spanish warship stopped the missile ship Monday, and U.S. military forces boarded it. But in Washington today, Secretary of State Powell said the missiles were purchased legally, and were going to a country that had good relations with the United States.

COLIN POWELL: We had assurances that these missiles were for Yemeni defensive purposes and under no circumstances would they be going anywhere else. And on that basis and also in acknowledgment of the fact that it was on international water and it was a sail that was out in the open and consistent with international law a little while ago we directed the ship to continue to its destination.

JIM LEHRER: Powell said the president of Yemen assured him this was the last time his country would buy missiles from North Korea. We'll have more on this in just a moment. U.S. Intelligence agencies missed vital clues before the 9/11 attacks because of poor cooperation and human error. The House and Senate Intelligence Committees reported that finding today. Their report said: "No one will ever know what might have happened had more connections been drawn between these disparate pieces of information." The report recommended a cabinet-level director of national intelligence. The chairman of the Senate Intelligence Committee acknowledged that idea has run into resistance in the past.

SEN. BOB GRAHAM: Many of the forces of status quo that have caused the Congress not toaccept a recommendation for a strong central control agency are still in place, in fact, in some areas even stronger today than it was a few years ago. Why is there a better chance -- fundamentally because 3,025 people were killed as a result of gaps in our intelligence.

JIM LEHRER: The intelligence agencies were left to decide for themselves on punishment for mistakes before 9/11. Alabama Senator Richard Shelby, the ranking Republican on the Senate Committee, warned that accountability should start with agency leaders.

SEN. RICHARD SHELBY: They should not make scapegoats out of mid level people and let the people at the top walk away -- say it's somebody else's fault -- because I think there's a lot of blame but we're not trying to get blame and say we got you. What we're trying to do is bring more security, better intelligence, gathering better intelligence sharing to our people, to prevent attacks in the future.

JIM LEHRER: We'll talk to Senators Shelby and Graham later in the program. Former Senate Majority Leader George Mitchell will not serve on an independent commission to investigate the September 11 attacks. He'd been selected as vice chairman, but he wrote to House and Senate Democratic leaders today, and said, "I have concluded that the work of the commission will require more time than I anticipated." His replacement is former Congressman Lee Hamilton of Indiana. The Bush administration formally submitted a national defense strategy to Congress today. It vows to use "overwhelming force," including nuclear weapons, to respond to any chemical or biological attack. That reiterates existing policy, but it comes at a time the U.S. military is making ready for a possible war with Iraq. UN weapons inspectors verified today that Iraq has not resumed nuclear weapons work at a site north of Baghdad. The inspectors reported that conclusion, as they sent more teams to at least six sites across Iraq. Those included a plant making parts for missiles and tanks, a uranium processing site, and a nuclear facility, among others. Scientists at Stanford University today denied reports they plan to clone human embryos. The head of a new research institute at the school said they do intend to create stem cells for medical research. They'll transfer genetic material from diseased adult cells into eggs, let them grow a few days, and then harvest the stem cells from the eggs. At a news conference Tuesday the dean of Stanford's medical school said that's not the same as reproductive cloning.

DR. PHIL PIZZO, Dean, Stanford Medical School: The purpose of our institute is to use the knowledge that comes from stem cell biology to better understand fundamental issues in human disease. It's not about cloning the human embryo. Unfortunately, I think that's gotten everyone off track in what is otherwise a very important and exciting track on a search that could make an enormous impact on our approach to human cancer.

JIM LEHRER: Other scientists challenged Stanford's description of its research. Stanford Professor Paul Berg, a Nobel Laureate said in fact the procedure being used is the same as cloning. The research will be done with private funding. President Bush has limited federal funding of stem cell research to cell lines created before August 9, 2001. Senate Republican leader Trent Lott apologized again today for praising Thurmond's run for President in 1948 as a segregationist. Last week at Thurmond's 100th birthday party the Mississippi Senator said the state was proud to have voted for Thurmond; he said the rest of the country should have done otherwise. Today Lott said his words were terrible; he said the racial policies of the 1948 were wrong and have been repudiated. Earlier in the day Senate Democratic Leader Tom Daschle said Lott owes the country a fuller explanation of his remarks. On Wall Street today, the Dow Jones Industrial Average gained more than 14 points to close at 8589. The NASDAQ rose more than five points to close at more than 1396. That's it for the News Summary tonight. Now it's on to the missiles on the way to Yemen, reforming the Philadelphia schools, and Senators Shelby and Graham on 9/11 intelligence.

FOCUS DANGEROUS CARGO

JIM LEHRER: Those North Korean Scuds: Ray Suarez has our story.

RAY SUAREZ: Ever since the September 11 attacks, the U.S. and its European allies have been patrolling off the Horn of Africa to stop the flow of terrorists and weapons between Africa and Arabian Peninsula. On Monday night, the Spanish navy bagged a big catch: A North Korean ship bearing scud missiles destined for the Arab nation of Yemen. The North Korean ship, the "So San," was flying no flag, and refused to stop for inspection in international waters. The Spanish warships fired warning shots across the bow. Then, Special Forces commandos were lowered from helicopters onto the vessel. U.S. Naval forces later joined the Spanish team in a search onboard on Tuesday. U.S. and allied intelligence had been tracking the ship since it left North Korea a month ago, bound for the Arabian Peninsula. At a press conference this morning, Spain's defense minister provided some details.

FEDERICO TRILLO, Defense Minister, Spain: A North American technical inspection group joined the Spanish team, and together they started a thorough search of the cargo. It was a laborious process demanding strict security precautions. As a result of the inspection a great amount of Scud-type ballistic missiles, among other sophisticated warfare material, were found in the containers. The nature and specific use of these materials is still to be identified, and will be determined once the investigation process is fully completed.

RAY SUAREZ: In the cargo hold, bags of cement concealed 15 short- to medium-range missiles, plus missile parts and 80 drums of an unidentified chemical American officials expressed concern on first reports. Deputy Secretary of State Richard Armitage spoke from China, where he's been discussing issues related to Iraq and North Korea.

RICHARD ARMITAGE, Deputy Secretary of State: Obviously this was suspected by American authorities for some time, and I think it is what it is. North Korea, as Dr. Rice, our national security advisor, has said time and again, is one of the major proliferators, and it appears was proliferating again.

RAY SUAREZ: Yemen has been drawing closer to the U.S. in the terrorism war. At first the Yemeni government said it didn't know about the missiles. But today, Yemen protested the seizure of the ship, saying the cargo was destined for its army and must be returned. Later today, the U.S. allowed the "So San" to resume its interrupted trip to Yemen. The Bush administration said it's allowing the missile shipment to go ahead.

ARI FLEISCHER: Yemen is a sovereign government, and Yemen has given the United States assurances. It will not transfer these missiles to anyone. We have no choice but to obey international law. And what Yemen has done in this case... because Yemen is an ally of the United States, in that sense it does not provide a threat to the United States. In terms of North Korea, we do have ongoing concerns about North Korea'sefforts to be... to sell arms around the world, and those concerns are well known.

RAY SUAREZ: North Korean officials have not commented about the ship or the weapons found onboard.

RAY SUAREZ: We get some perspectives now from Joel Wit, a former State Department official who focused on North Korea and non- proliferation issues; Retired Marine Corps Colonel Edward Badolato was a Naval attach to a number of Middle Eastern countries, and has been involved in planning naval interdiction operations. And Jillian Schwedler, an assistant professor of government and politics at the University of Maryland; she has written about and traveled about extensively in Yemen.

Professor Schwedler was this arms acquisition from North Korea, a breach of spirit or the letter of any agreements to isolate North Korea from the international arms market?

JILLIAN SCHWEDLER: Well, on Yemen's part it's certainly not a breach of a letter of any agreement. There's been discussion there were informal agreements and debates within Yemen and with the United States representatives about not pursuing acquisition of arms from North Korea in the future. This was very likely an agreement that had been concluded previous to those discussions a few months ago. And so Yemen is absolutely in no violation and the U.S. Government has said this as well.

RAY SUAREZ: A short time ago we heard Secretary Powell saying he took at face value Yemen's statement that the country was the final destination for the missiles. Has Yemen been a stable, reliable actor on the international stage so that you might take that at face value as well?

JILLIAN SCHWEDLER: I would take that at face value. Yemen has been very forthright and cooperative with the United States in the so called war on terrorism. And Yemen has been very cooperative in allowing U.S. Government access, providing information to the U.S. Government. And there's no history or reason to suspect that the government of Yemen is in any way hiding anything. Acquisition of arms is a typical thing a government. It's a demonstration of sovereignty. And the Yemeni government has come under domestic criticism for its close relationship with the United States. And this is perhaps a move that also illustrates that the Yemeni government is exercising is own sovereignty continuously.

RAY SUAREZ: Let's go from the buyers to the sellers, Joel Wit. What does this mean the seizure of a North Korean cargo that included missiles?

JOEL WIT: Well, I think it just demonstrates to everyone the reality of the situation in dealing with North Korea. They are a large exporter of ballistic missiles and they export those missiles to many regions of the world, including the Middle East and also to South Asia. And the problem is while the administration has taken a very tough stance towards the export of these weapons in reality when it faces, you know, the real world as we see today it has had to let the shipment go through.

RAY SUAREZ: Is the Scud -- I know it anted a lot of Americans' vocabulary for the first time during the Gulf war is it a very powerful, potent weapon, a destabilizing one?

JOEL WIT: Well, I think it is a powerful weapon. It is certainly psychologically a powerful weapon. But the point is the Scuds are four decades old technology and these are old Soviet missiles. So they are not modern technology. But when you introduce them into regions of the world such as the Middle East and South Asia, then they can be very destabilizing.

RAY SUAREZ: Well, is Yemen acquiring them something that would worry somebody, for instance, whenyou were working in non-proliferation? Would that have concerned you a lot?

JOEL WIT: Well, you know, I'm not sure if it would have been concerned us a lot. I would defer to my colleague about the situation in that part of the world. The point is though that we have known for sometime in a North Korea sells missiles to countries like Yemen, like Egypt and others who we have good relationships with and yet we have not done much about it because the political relationship is more important than our non-proliferation objectives and the administration is starting to realize this.

RAY SUAREZ: Colonel Badolato what is involved in intercepting a ship on the high seas?

COL. EDWARD BADOLATO (Ret.): Well, The first thing to be involved is to get a target, to understand that a ship, for example in this case, we have longstanding international maritime law, principle that a stateless vessel can be stopped by a warship and can be boarded and checked out and so forth. This ship by the virtue of the fact that it did not have a flag flying was known as a stateless vessel. Therefore, it was a legal maneuver to have the Spanish vessel attempt to stop it and then board it along with the U.S. troops. Getting on board the ship is essentially a maritime, naval type operation; we're generally using Special Forces, Seals for the most part, are used to doing this type of operation. Launching many times off of a -- on a helicopter and then being let down on the ship to perform an inspection after he is come under control either stopped or going very slowly to allow this to happen, to put these people on board, the boarding party essentially going on board with both Spanish and American in this case. I have to say that we have a lot of experience in this area. We have been there for months with a coalition maritime force looking for essentially Osama bin Laden's fleet which is functioning around there doing its thing and additionally looking for the fleeting al-Qaida forces coming out of Afghanistan trying to get over to the Horn of Africa and transporting various weapons and things of this nature. It's not unusual to do this and we have our coalition navies on watch to stop this type activity.

RAY SUAREZ: Earlier Air Fleischer, the President's spokesman, said the reason the administration let the ship continue to Yemen and the delivery of the missiles go forward was that they have to follow international law in this case. Does that mean that the stopping and searching of the ship was a violation, however minor of international law?

COL. EDWARD BADOLATO (Ret.): I don't read it that way. Most of my Navy friends that we have talked with about this as it happened since Monday agree that it was well within the rights of what we do. We do on a daily basis. We're doing this in the Caribbean against drugs in the contiguous waters of U.S. with Coast Guard and Navy vessels on watch and also in the Mediterranean with some of our colleagues looking at some potential infractions of shipments going into some of the old Balkan areas and so forth. There seems to have been a magical political transformation of the ship and what it was doing from being illegal to legal there while it was out on the high seas.

RAY SUAREZ: Well, Professor Schwedler, that magical transformation is that an outgrowth of the state our relations with Yemen, trying to develop a closer partnership with them, a new partnership with them?

JILLIAN SCHWEDLER: I think it very much is, and I agree with some of the comments that have been said in that regard. It's very much a reflection of the political relationships that are more important to the U.S. Government right now. It's quite concerned that a government is violating our war on evilism, our concern about the axis of evil -- that they are acquiring weapons from a country that the U.S. would not like not be shipping weapons but at the end of the day that relation is much more significant, it's much more important and the U.S. Government is going to maintain that relationship as is the government of Yemen also would like to maintain that relationship.

RAY SUAREZ: And Joel Wit, just because the buyers have been let off the hook where does this leave the sellers? We're not going to blockade Korea?

JOEL WIT: Well, no, and this is -- reality bites. The United States has made a number of harsh, tough statements about North Korea's tendency to proliferate missiles in particular and yet when confronted with these harsh realities we have had to tone that down in our actions. So in effect, if I was a North Korean seeing this, I would think well gee American rhetoric is tough but I can go about my standard operating procedure, which sending these missiles overseas.

RAY SUAREZ: Is there intelligence value to an interdiction like this kind even if the sale and delivery goes through, Colonel?

COL. EDWARD BADOLATO (Ret.): There's always intelligence value. As a matter of fact, we had a lot of intelligence; that's one of the reasons we were keeping an eye on this particular ship. We had weeks of intelligence as to which one had some weapons and maybe something else on it, but getting a look at the Scuds and what is on there, even though it's an old weapon, even though we know everything there is to know about this particular model of the Scud and so forth, there's always intelligence value to be able to get the canister markings and things of this nature. It's not the greatest intelligence find but it's useful information to get this type of data.

RAY SUAREZ: And when you hear that the Spanish navy was involved in this in partnership with the United States Navy, is that a stepping up on the part of Spain as a NAOT member? A fairly, compared to some of the others, a fairly recent NATO member?

COL. EDWARD BADOLATO (Ret.): We have a number of NATO and other coalition countries involved in this area doing this. We have the British and the Italians and the Germans and the others are there. This particular instance happened to have a Spanish vessel on duty doing this. But I think it's a credit to the building the coalition to do this naval operation down there in the Horn of Africa -- yeah.

RAY SUAREZ: Professional Schwedler, tell us a bit about the recent past of Yemen and why the United States has been so careful to court the country in the recent war on terrorism.

JILLIAN SCHWEDLER: In terms of relationship with the United States we have the October 2000 attack on the Cole, which was of great concern and the Yemeni government quite quickly was willing to cooperate. It's important to remember that al-Qaida members that exist in Yemen such that they are and the numbers are estimates run from a few dozen to perhaps a hundred to a hundred and fifty. So we're not talking about a large number of al-Qaida operatives. Nonetheless, most certainly they are there. They are also a problem for the Yemeni government. The Yemeni government is happy to have assistance to help to try to eliminate them. The U.S. has seen this as an opportunity build a new ally in that part of the Arabian Peninsula. It's been a bit tense and the Yemeni government is quite, as I mentioned, coming under domestic attacks for that relationship with the United States but nonetheless both have sought to build the relationship.

RAY SUAREZ: Joel Wit, the Koreans most recently have been in the headlines because of their admission they have continued with nuclear programs they promised to abandon. How does this latest incident fit into the relationship between the United States and North Korea?

JOEL WIT: Of course the relationship between the United States and North Korea right now is almost non-existent. So this will make a non-existent relationship even worse. The fact is the revelations about the nuclear program and the subsequent actions by the United States have backed North Korea into a corner. At the moment we're at a situation where both sides are try trying to keep the tensions under a lid. But that may not be possible much longer. And instances like this threaten to escalate those tensions.

RAY SUAREZ: Mr. Wit, Professor, Colonel, thanks a lot.

JIM LEHRER: Still to come on the NewsHour tonight: The Philadelphia schools; and pre- 9/11 intelligence.

FOCUS RESCUE MISSION

JIM LEHRER: School reform in Philadelphia. Betty Ann Bowser reports.

BETTY ANN BOWSER: As principal of one of the worst performing schools in Philadelphia, Aaron Starke will try anything to get his kids test scores up.

AARON STARKE: Who's ready to ace the test today? ( Kids cheer )

BETTY ANN BOWSER: On a recent school- wide test day at Kenderton Elementary, Starke used music to inspire the kids. ( Music playing ) ( rapping )

AARON STARKE: We're Kenderton kids...

KIDS: Nobody kids around.

AARON STARKE: And we got what it takes to ace the test, right?

BETTY ANN BOWSER: But he's going to need more than music to improve his school's performance.

AARON STARKE: Are you ready for school today?

STUDENTS: Yeah!

BETTY ANN BOWSER: The students here are so far behind, score so low on standardized tests, that Kenderton Elementary has the dubious distinction of being named a "distressed school," along with 65 others in the city. That's one-fourth of the whole school system, a system where three-quarters of the students live in poverty.

TEACHER: Two points

BETTY ANN BOWSER: Last December, the state of Pennsylvania took over the entire school system, and in an unheard of experiment, implemented not one reform plan, but many. Hiring private companies to run public schools is nothing new, but in Philadelphia, six different organizations were contracted to fix two-thirds of the distressed schools. The other one-third were reorganized by the district itself. Kenderton was one of the 20 schools given to Edison Schools, the nation's largest for-profit education management company, with 150 schools nationwide.

AARON STARKE: I want everybody focused on testing...

BETTY ANN BOWSER: Edison hired 28- year-old Starke to be principal.

AARON STARKE, Edison Principal: My kids have new books, they have new curriculum, they have new materials, they have new computers. I often try to look and say, "what happens if the Edison program was not here?"

BETTY ANN BOWSER: What do you think the answer is?

AARON STARKE: I'd probably be going back to a closet, pulling some textbooks off... ( blows ) ...blowing off the dust, and bringing them into the classrooms. Or, you know, I guess the same old, same old.

STUDENTS: I believe I can fly...

TEACHER: Very nice.

STUDENTS: ...I believe I can fly...

BETTY ANN BOWSER: Music is a big part of Edison's curriculum. Kenderton teacher Ezechial Thurman agrees with that philosophy, because he thinks it helps kid learn.

STUDENTS:I believe I can soar.

EZECHIAL THURMAN, Edison Teacher: They're saying, "look, the process that the children go through in music and in art and in drama and even in physical education, it's all part of their development, and it's a vital part of being successful in school."

BETTY ANN BOWSER: But some teachers aren't happy with Edison. Ted Kirsch is president of the Philadelphia Teachers Union.

TED KIRSCH, Philadelphia Federation of Teachers: When you talk to the teachers, there's no change. The computers that were promised are not there, supplies are not there. And so, we question from the very beginning, "if you're going to institute changes, when are they going to begin?"

BETTY ANN BOWSER: And Kirsch says there is another big problem caused by Edison, because it fired non-teaching assistants, who were responsible for discipline in the middle schools.

TED KIRSCH: The facts today: Weapons offenses that we didn't have before. We have teachers being assaulted, we have pupils being assaulted. We have a general decline in discipline. That's a serious problem.

BETTY ANN BOWSER: Newly hired school district CEO Paul Vallas admits things got off to a rough start, but said only in a few Edison Schools.

PAUL VALLAS, CEO, Philadelphia School District: Edison came in and they got rid of many of the support services that the schools have, many of the support staff. Well, I had to go in and restore them all. So, I had to overturn a number of Edison's personnel decisions that I felt destabilized the schools. You know, I also had to assign additional security, and in some cases, I had to assign mentors, and in some cases, I had to basically send support teams in to work with the schools and to help get the schools reorganized.

BETTY ANN BOWSER: Vallas says he's keeping an open mind about Edison, even though the company's record has been questioned elsewhere. Just last month, school officials in a neighboring district said test scores in Edison Schools there had actually gone down. And in Texas, the Dallas school district announced it would drop Edison because of poor results. In spite of all of this, Edison CEO Chris Whittle remains confident the company will succeed.

CHRIS WHITTE, CEO, Edison Schools: We're the 35th largest system of schools in the United States. And compare that to any other major system. Our rate of gain is the best in the nation, and we've tracked that for many years. Do we have sites that aren't as good as we would like? Absolutely. We're not perfect, we don't claim to be. But if you look at us system wide, we're immensely proud of the results. And I'll go a little bit further. We challenge anyone to show us an 84,000-student system of largely-disadvantaged children that's performing, that's gaining at the same rate that we are.

BETTY ANN BOWSER: Philadelphia is also giving some other for- profit companies a chance to see if they can improve test scores.

SAM HOWARD, Administrator, Chancellor Beacon: One of the things that we're trying to do is promote safety, and a wholesome learning environment.

BETTY ANN BOWSER: Sam Howard is the director of school operations for Chancellor-Beacon Academies, which was awarded five schools in Philadelphia, and has 73 schools nationwide. The biggest changes they've made in the schools, so far, have been physical.

SAM HOWARD: Anything that was of an unsafe nature, we're in the process of taking care of. You know, because it makes for a better learning experience for the children.

BETTY ANN BOWSER: Chancellor-Beacon consciously has not made many personnel or curriculumchanges yet. Instead, it wants to extensively test the students before determining what course of action to take.

SAM HOWARD: It's, "how do you eat an elephant?" One bite at a time. So, we're starting with this bite and we're moving our way through. And we will get the educational component in the same condition that we'll have the building in when it's ultimately repaired.

SPOKESPERSON: Saturday, all the paint's coming to paint the lockers.

BETTY ANN BOWSER: Officials at Victory Schools, another private management company, also spent much of the summer overseeing physical changes at the five schools they've been awarded. Victory has nine schools nationwide. Unlike Chancellor-Beacon, Victory is also making sweeping changes in the academic arena. At Fitzsimons Middle School, one of the worst schools in the city, 95% of the teachers were asked to leave, and two new principals were brought in. Victory also separated the boys and girls into separate academies.

SPOKESPERSON: What we're going to do is we're going to teach reading pretty much over the whole day.

BETTY ANN BOWSER: At training seminars this summer, Victory teachers learned that virtually every class would teach reading.

SPOKESPERSON: I know it's not going to feel real comfortable to begin with, but we can keep doing what we're doing, and we're going to keep having kids who can't read.

TEACHER: Come on guys, everybody, what word?

STUDENTS ( All ): Show.

TEACHER: What word?

STUDENTS ( All ): Jump.

TEACHER: What word?

STUDENTS ( All ): Yell.

BETTY ANN BOWSER: Watching these teenagers learn basic vocabulary and grammar makes clear the enormous challenge ahead. Regina Johnson teaches at Victory-Fitzsimons Middle School.

REGINA JOHNSON, Victory Teacher: During elementary school, they missed some things that they should have had. There's gaps in their learning. We have to go over what an adverb is, how do you use an adverb, what's a noun, what's an adjective. Just simple things that we might take for granted, they might have missed.

BETTY ANN BOWSER: Lynn Spampinato makes no apologies for the overwhelming emphasis on literacy.

LYNN SPAMPINATO, Administrator, Victory Schools: We talk all the time about the drop-out rate, and the drop- out rate in high school, but I really believe the drop-out rate happens... the drop-outs happen in middle school. They may not physically leave, but when you walk through a building and see children who have been in public education for seven years, and they're reading on a first-grade level, hope is missing from their lives. And so, we have to take that focus on literacy.

BETTY ANN BOWSER: Yet another model is being tested at the 21 schools being restructured by the district.

SPOKESPERSON: I've been going around, and I am liking what I see in the classrooms.

BETTY ANN BOWSER: Robin Cooper, principal of L.P. Hill Elementary, says a major component of the restructuring is professional development. Every other Wednesday at 1:00 in the afternoon, classes for the students end, and begin for the teachers.

ROBIN COOPER: It helps the student when you ask them, "well, why are you learning this?" "What is it that you're doing?" You cannot accept, "well, I don't know why we're learning it," or "the teacher told us we have to do it."

BETTY ANN BOWSER: In addition to these seminars, the restructured schools have put in academic coaches and a rigorous test-prep plan. At L.P. Hill, 30 minutes of every day is spent on practice tests. Principal Cooper says the pressure to improve is enormous.

ROBIN COOPER: I know for the teachers they are feeling the pressure. So some days are good days, and some days the teachers are overwhelmed. So, I have to figure out how to, you know, bring it all together so that they don't feel so overwhelmed, but still understand that we're working against a timeline, and that if we don't move the scores of the children and make sure that our children are working towards their grade level, then there is someone out there that can do it for us.

BETTY ANN BOWSER: The 67 distressed schools in the reform effort are all getting significantly more money per pupil than the other schools in Philadelphia. The union complains with that kind of investment, any school could do better.

TED KIRSCH: If you put the dollars in the right place that we know what to do and we can be successful and we don't have to have profiteers in this process.

BETTY ANN BOWSER: CEO Vallas says he won't hesitate to terminate contracts with schools that don't see improvement. In the 1990s, Vallas was credited with turning around the public school system in Chicago. He has an extensive list of reforms he now wants to institute system-wide in Philadelphia, but says he is willing to give the private companies a chance.

PAUL VALLAS: I just want accountability. And whether it's the private schools or the traditional public schools, I mean, they're going to be evaluated the same way-- on academic performance, on attendance, on their ability to reduce the truancy rate, on graduation rates, on public safety-- and we're going to evaluate them the same way, and we're only interested in what works. And those private managers that run successful schools and move those schools forward will have their contracts renewed, and those that don't will have their contracts and their charters revoked.

BETTY ANN BOWSER: All students in Philadelphia were tested in October. The first chance to see whether any of the experimental schools improves come in the Spring, when the kids are tested once again.

FOCUS IMPROVING INTELLIGENCE

JIM LEHRER: Finally tonight, today's congressional report on what went wrong with U.S. intelligence on 9/11. Kwame Holman begins.

KWAME HOLMAN: The release of today's report by the joint Senate and House Intelligence Committees follows nearly ten months of investigative hearings. They gave insight into how successful the intelligence community was in identifying terrorism threats prior to September 11. Committee staff director Eleanor Hill:

ELEANOR HILL: From 1994 through as late as august 2001, the intelligence community had received information indicating that international terrorists had seriously considered the use of airplanes as a means of carrying out terrorist attacks.

KWAME HOLMAN: CIA Director George Tenet:

GEORGE TENET: In 1998, I told key leaders at CIA And across the intelligence community that we should consider ourselves at war with Osama bin Laden. I ordered that no effort or resource be spared in prosecuting this war. CIA began to put in place the elements of this operational strategy, which structured the agency's counterterrorism activity until September 11 of 2001.

KWAME HOLMAN: But the hearings also disclosed intelligence failures. One unidentified FBI Agent talked of a "wall" that prevented the free flow of information between the FBI and the CIA.

FBI AGENT: In my e-mails, I asked where this new wall was defined. I wrote on august 29, 2001: "Whatever has happened to this, someday someone will die, and wall or not, the public will not understand why we were not more effective in throwing every resource we had at certain problems."

KWAME HOLMAN: Michigan's Carl Levin, chairman of the Senate Armed Services committee, picked up on some specific failures.

SEN. CARL LEVIN: My question is do you know why the FBI Was not notified of the fact that an al-Qaida operative now was known in march of the year 2000 to have entered the United States? Why did the CIA not specifically notify the FBI?

SPOKESMAN: Sir, if we weren't aware of it when it came into headquarters, we couldn't have notified them. Nobody read that cable in the March timeframe? It was an information-only cable from the field, and nobody read that information-only cable.

SEN. CARL LEVIN: Should it have been read?

SPOKESMAN: Yes, of course, in hindsight.

KWAME HOLMAN: This morning, Porter Goss, chairman of the House Intelligence Committee, talked of the difficulty in assigning specific responsibility for the intelligence failures.

REP. PORTER GOSS: You all know that we've worked very hard trying to create a clearer accountability trail for people with responsibilities here. We've also tried to incentivize and motivate people in the intelligence community to take risk. Obviously, that has to come together somewhere in a meaningful way.

KWAME HOLMAN: And so members of the joint investigating committees recommended that it be left to the inspectors general of the various intelligence agencies to review the inquiry's findings and determine any disciplinary action for individuals. Members also recommended establishing a cabinet-level director of national intelligence to oversee all intelligence gathering; creating an all-source terrorism information fusion center within the Department of Homeland Security; and improving the FBI'S ability to acquire domestic intelligence through counterterrorism activities. House Minority Leader Nancy Pelosi was the ranking Democrat on the House Intelligence Committee.

REP. NANCY PELOSI: Some of the recommendations-- particularly those dealing with the creation of a director of national intelligence, the consideration of alternative ways for conducting domestic intelligence activities, and the affixing of accountability for actions taken or not taken with respect to matters related to the September 11 attacks-- are controversial. They are offered as part of efforts under way already to better protect the American people from terrorist acts. Much discussion and debate remains over the way to accomplish that goal in a manner consistent with the protection of the liberties we hold dear.

KWAME HOLMAN: While the work of the Senate and House Intelligence Committees now is complete, the investigation will continue under the direction of former Secretary of State Henry Kissinger. President Bush tapped Kissinger two weeks ago to chair a newly created independent commission to examine all aspects of the September 11 attacks.

JIM LEHRER: Gwen Ifill takes it from there.

GWEN IFILL: Now to the chairman and vice chairman of the Senate Select Committee on Intelligence: Senator Bob Graham, Democrat from Florida; and Senator Richard Shelby, Republican from Alabama.

Senator graham, you said today at the beginning of news conference announcing the results of your investigation almost -- that there is almost a certainty in the coming months Americans will face another attempted terrorist assault possibly on the same scale as September 11. What did you find out in your investigation that led you to say that today?

SEN. BOB GRAHAM: It's been a whole series of pieces of intelligence which have indicated that the threat level is going up. George Tenet said in October that the threat level today is high or higher than in the weeks before September 11. We have had some of the most serious terrorist organizations in the world such as Hezbollah announce within the last two weeks that they are no longer to going confine their activities to Israel to Palestine but will take a global view and that the United States is in their bull's eyes.

GWEN IFILL: Senator Shelby, you spent what of your findings surprised you the most that you can tell us about?

SEN. RICHARD SHELBY: The most surprising thing was the extent that the FBI, the CIA and other agencies did not coordinate their information. In other words, there was no fusion center to act, put together information or intelligence and then act upon it. As we look back on the events leading up to September 11, of course we'll never know if we could have prevented September 11, but if we look at the Phoenix memo and we look at the Zacarias Moussaoui case that came out of the Minnesota and other information, if you had put it together, could you have had a different outcome, possibly.

GWEN IFILL: And by fusion center, you mean laterally a physical place where all this information was being swapped?

SEN. RICHARD SHELBY: Absolutely and what Senator Graham and I have laid the predicate for in the legislation creating the Homeland Security Department, it was our authoring of the part that deals with putting an analytical component, that is a center there to deal with all source intelligence -- domestic and wherever they can get it -- in the Department of Homeland Security. That could be the nucleus of something that could grow bigger in the future.

GWEN IFILL: Senator Graham I don't want to put too fine a point on it, how concerns should Americans be now that the gaps in intelligence, that the gaps in information swapping that you all discovered in the course of your investigation still exist?

SEN. BOB GRAHAM: I think they do still largely exist. Our recommendation tried to focus on the problems with he saw that occurred before September 11, some developments since that time and then recommend how to close those gaps. But they are still is there. I hope that we will not require more Americans being killed before we are able to overcome the inertia of the status quo to leave things the way they have been in the past, because the way they have been in past makes Americans too vulnerable to the type of event that occurred on September 11.

RAY SUAREZ: There's been a lot of attention paid to one of the big gaps having to do with immigration policy. So many of the hijackers were in this country and shouldn't have been or at least someone was supposed to have been keeping an eye on them who wasn't. But your committee didn't really deal with that.

SEN. BOB GRAHAM: Well, yes, because our focus was on the intelligence community. We did touch on other issues including the role of Immigration Service but only as it related to intelligence. As an example we have a recommendation this we should re-look at our extradition treaties because today visa fraud or violation of our visa laws is not an extraditable offense and we've got some people who we would like to get back into the United States so that we can interrogate them further about what they knew about 9/11 who are under a charge of visa fraud but we can't get them back in the country because that's not an offense that is the basis for a mandatory return to the United States.

GWEN IFILL: Senator Shelby you wanted to add on that point?

SEN. RICHARD SHELBY: Sure. Basically we didn't have in the scope of our charter or investigation concerning the two committees to get into the detail that is necessary on immigration, FAA, and a lot of other things. The Commission that we have created will have that scope. It will be broader in nature. I believe they can pick up on what we've done, which I believe is a substantive credible investigation and go farther with it. We must get into the immigration area, we must get into FAA. We've got to put it all together because America basically is not much safer and some people say not safer at all than it was before September 11. We're trying but we're challenged.

GWEN IFILL: Before we get to talking about that Kissinger commission let's talk for another moment, Senator Shelby, about one of the recommendations in the report that there be an intelligence czar, a cabinet level secretary of intelligence. This has been tried before, hasn't it?

SEN. RICHARD SHELBY: It has. It's been recommended before by a lot of commissions but I don't think it's been the critical juncture that we face today in the intelligence field. But I believe we have to have someone like the CEO of a large company that can be in charge, can have something to do and say about the budgets and the priorities to run a community that is so broad and made up of so many agencies. We don't have it today. I think we've got to have it otherwise we're not ever going to reform the intelligence community.

GWEN IFILL: Senator Graham, what makes now different than the past in trying to create a cabinet level intelligence office?

SEN. BOB GRAHAM: Gwen, it's the number 3,025 the people who were killed on September 11. There's been a recommendation that there need it's be greater central control of our central intelligence community in order to avoid these gaps of communications, failures to be able to set and enforce priorities, failures to be able to have a consistent policy of research and development. All those recommendations in the past have gone unacted upon but now with 3,025 mainly Americans killed by a terrorist attack I think the atmosphere, the sense of urgency in the country, in the Congress will be different.

GWEN IFILL: Senator Graham, are there elements in this report, which are classified that Americans should know about but can't?

SEN. BOB GRAHAM: Yes, going back to your question about what was the greatest surprise. I agree with what Senator Shelby said the degree to which agencies were not communicating was certainly a surprise but also I was surprised at the evidence that there were foreign governments involved in facilitating the activities of at least some of the terrorists in the United States. I am stunned that we have not done a better job of pursuing that to determine if other terrorists received similar support and, even more important, if the infrastructure of a foreign government assisting terrorists still exists for the current generation of terrorists who are here planning the next plots. To me that is an extremely significant issue and most of that information is classified, I think overly classified. I believe the American people should know the extent of the challenge that we face in terms of foreign government involvement. That would motivate the government to take action.

GWEN IFILL: Are you suggesting that you are convinced that there was a state sponsor behind 9/11?

SEN. BOB GRAHAM: I think there is very compelling evidence that at least some of the terrorists were assisted not just in financing -- although that was part of it -- by a sovereign foreign government and that we have been derelict in ourduty to track that down, make the further case, or find the evidence that would indicate that that is not true and we can look for other reasons why the terrorists were able to function so effectively in the United States.

GWEN IFILL: Do you think that will ever become public, which countries you're talking about?

SEN. BOB GRAHAM: It will become public at some point when it's turned over to the archives. That's 20 or 30 years from now. We need to have this information now because it's relevant to the threat that the people of the United States are facing today.

GWEN IFILL: Senator Shelby let's talk about accountability. You have been quoted on more than one occasion and again today about -- talking about the CIA, George Tenet, the director of Central Intelligence saying that more massive failures occurred on his watch than any CIA director in history. Do you think he should resign?

SEN. RICHARD SHELBY: Well, I have spoken on that before. I would like him to resign. Whether he stays there is up to President Bush. He works with the President. He was not appointed by this President. I personally like George Tenet. I think he has a lot of good attributes and in some areas he's done a good job, but he has not even tried to manage the community. But there are a lot of other people that ought to be held accountable. Look at the former director of the CIA -- John Deutch -- on his watch a lot things did happen that shouldn't have happened. Former FBI Director Louis Freeh; he has got some accountability there. We can go on and on and I believe people should be accountable for their actions or inactions.

GWEN IFILL: You call Louis Freeh's tenure at the FBI catastrophic I think is the word you used.

SEN. RICHARD SHELBY: If you look back and you examine it despite all of us liking Louis Freeh it was not the best -- finest hour of FBI

GWEN IFILL: The White House spokesman was asked today about your comments and his response was basically that you are a one-man minority opinion and appeared to brush off your one-man minority opinion.

SEN. RICHARD SHELBY: Well, I think whoever said that didn't know what they are talking about. And secondly, if you see the report and if we release and I hope we will declassify all of the information, you're going to see that it's a majority opinion.

GWEN IFILL: That was Ari Fleischer, the President's spokesman, who said that.

SEN. RICHARD SHELBY: Sure.

GWEN IFILL: Senator Graham, whose job is it to assign responsibility in this case -- if indeed there are people's whose heads should roll, people who should be held responsible for failures that led up to 9/11? Should it be your job as the head of committee or the President's job, should it be a new commission? Who should be doing this?

SEN. BOB GRAHAM: Well, it is essentially an executive responsibility. The President should review the performance of those persons who he appointed within the agencies. There should be a process to evaluate how well middle management personnel function. We have placed the responsibility to make that inquiry on the inspector generals within each office. It happened that Eleanor Hill, who is our staff director, served for several years as the inspector general for the Department of Defense. And she is well aware of their capabilities and their responsibilities to make those kinds of judgments. We then call for the inspector general's report to not only be submitted to the head of agency but to the President of the United States and to the Congress so that we can all be assured that a full review was conducted and theappropriate sanctions or recognition and reward for exemplary performance was dispensed.

GWEN IFILL: Senator Graham, in pulling altogether the disparate pieces of this report, do you feel that you got the cooperation you needed either from the CIA, the FBI, the White House or the Department of Defense that you just alluded to?

SEN. BOB GRAHAM: I do not believe we got the full cooperation that we needed. As an example, as of today there are 13 requests outstanding with the FBI alone for additional information which would help us follow the trail including the trail of foreign government involvement. That agency and others have been reticent to come forward. Frequently we didn't know what witnesses were going to be available until a matter of a few hours before the hearing, which restricted our ability to be as fully engaged in interrogating the witnesses as we would have liked to have been. There's going to be a follow up commission under Dr. Kissinger appointed by the President and we're going to give him everything we developed including the trails that we will recommend they pursue and follow.

GWEN IFILL: Senator Shelby, picking up where you leave off here as Senator Graham just alluded, the Kissinger Commission Senator George Mitchell just announced today he's stepping down from that commission. And former Congressman Lee Hamilton is stepping into the job. Do you think that they'll face more significant hurdles than you did in trying to get this information on the record, declassified in the public eye or do you think you've made their job easier?

SEN. ROBERT BENNETT: We hope we've made their job some what easier but they'll face many challenges. When you're investigating a community such as the intelligence community, and immigration and everything that goes with it. There are going to be a lot of people that resist this investigation. There's not going to be cooperation like you would think. But they've got their work cut out for them. We wish them well. They have got some able people there. And I think Lee Hamilton coming on to the commission in place of George Mitchell that's going to be a plus. George Mitchell is very able but he had some conflicts, acknowledged them, decided to resign from the commission.

GWEN IFILL: Do you think this commission, it will be conflict free now with Henry Kissinger as its chairman?

SEN. RICHARD SHELBY: Well, I think Dr. Kissinger brings a lot of prestige, a lot of experience to the commission but I believe at the end of day the commission is going to be balanced and they're going to put what is in the interest of this nation first. They have to do it. Otherwise it will be a sham commission.

GWEN IFILL: Senator Richard Shelby and Senator Bob Graham, thank you for joining us.

RECAP

JIM LEHRER: Again, the major developments of this day: The U.S. released a ship carrying North Korean missiles, and allowed it to proceed to Yemen. And former as you just heard -- former Senate Majority Leader George Mitchell said he will not serve, after all, on an independent commission to investigate the 9/11 attacks. We'll see you online, and again here tomorrow evening. I'm Jim Lehrer. Thank you, and good night.