Panel: Agencies Wrong on Iraq WMD

America's spy agencies were "dead wrong" in most of their judgments about Iraq's weapons of mass destruction and the United States knows "disturbingly little" about the threats posed by many of the nation's most dangerous adversaries, according to a report released Thursday.

A presidential commission on weapons of mass destruction (search) called for sweeping changes to prevent future failures. It outlined 74 recommendations and said President Bush could implement most of them without action by Congress. It urged Bush to give broader powers to John Negroponte (search), the new director of national intelligence, to deal with challenges to his authority from the CIA, Defense Department or other elements of the nation's 15 spy agencies.

Click here to read the full report.

The report said today's intelligence community, even after it's recent reforms, remains "fragmented, loosely managed, and poorly coordinated...a 'community' in name only."

It also called for sweeping changes at the FBI to combine the bureau's counterterrorism and counterintelligence resources into a new office. Also recommended is the creation of an assistant attorney general for national security and a national counter-proliferation center to manage and collate intelligence on nuclear, biological and chemical weapons threats.

"The FBI appreciates the work of the WMD commission, particularly its focus on our intelligence program. The commission's thorough review will be extremely valuable in our continuing efforts to strengthen our program," the FBI said in a statement. "We are pleased that the commission recognized that we have made progress, and we agree with its judgment that we have more work to do."

CIA Chief Porter Goss (search) noted both the difficulty in gathering intelligence on weapons of mass destruction and the improvements that have been made in this area.

"We need more robust collection and more rigorous analysis, and I agree wholeheartedly with the commission's findings on these issues," Goss said in a statement. "We can never become complacent. There is still much to be done as we continue to transform the way the intelligence community does its work."

Homeland Security Secretary Michael Chertoff (search) said, "this report will serve as another tool to guide our decision-making to better manage risk, enhance our detection capabilities and improve our intelligence analysis. The department supplies, consumes, analyzes, and distributes intelligence information, and we are always seeking new ways to apply intelligence to our vulnerabilities to make the homeland more secure."

Attorney General Alberto Gonzales (search) told reporters that the recommendations concerning the FBI and Justice Department deserve "serious consideration." He said they were good recommendations and that officials would spend the next weeks examining them and seeing "how we can strengthen America."

Gonzales also praised the work FBI Director Robert Mueller (search) has done in reorganizing the FBI. Gonzales recognized that the turf battles between the FBI and CIA as discussed in the report do exist, but said, "we are all committed to protecting America."

Defense Secretary Donald Rumsfeld (search) said he asked Pentagon officials responsible for intelligence activities to "undertake a systematic review of the commission's recommendations, and make suggestions to me for improvements."

The more than 500-page report was the latest somber assessment of intelligence shortfalls that a series of panels have made since the terrorist attacks of Sept. 11, 2001.

The report implicitly absolves the Bush administration of manipulating the intelligence used to launch the 2003 Iraq war, putting the blame for bad intelligence directly on the intelligence community.

"The daily intelligence briefings given to you before the Iraq war were flawed," the report said. "Through attention-grabbing headlines and repetition of questionable data, these briefings overstated the case that Iraq was rebuilding its WMD programs."

The unclassified version of the report does not go into significant detail on the intelligence community's abilities in Iran, North Korea, Russia and China; those details are included in the classified version.

Frank Keating (search), the governor of Oklahoma and former FBI special agent, told FOX News it's no "great surprise" that the report places heavy loads of blame on the intelligence community. "We've heard those blasts over the past couple of months," he said.

"I know a lot of people are suffering from a lot of reorganization fatigue," Keating said, referring to recent overhauls and reorganizations of various homeland security and intelligence agencies. But, he said, if the Bush administration wants to continue to practice a preemption policy where the United States goes after terrorists before they hit America at home, "we'd better get it right."

"I think it's a very serious piece of work I believe will be viewed with care … and implemented where appropriate," Keating said.

Bush received the report in a meeting with commission members in the Cabinet Room where he was flanked by the panel's co-chairmen, Republican Laurence Silberman (search), a retired federal appeals court judge, and Democrat Charles Robb (search), a former senator from Virginia.

"The central conclusion is one which I share. America's intelligence community needs fundamental change," Bush said after receiving the report.

He said he had directed Fran Townsend, his White House-based homeland security adviser, to "review the commission's finding and to assure that concrete actions are taken."

Rep. Pete Hoekstra, the chairman of the House Permanent Select Committee on Intelligence, said his panel will continue to review the commission's recommendations and determine if any additional legislative action is necessary.

"We owe the American public nothing less," said the Michigan Republican.

'Dead Wrong' on Iraq's WMD

The blue-ribbon panel created by Bush 13 months ago was not commissioned to determine whether Iraq had weapons of mass destruction, nor how the decision to go to war was made.

Instead, it studied how and why the country's intelligence analysts proved to be so wrong and recommended ways to ensure it doesn't happen again.

"CIA's and the Defense Intelligence Agency's spies, the National Security Agency's eavesdroppers, and the National Geospatial-Intelligence Agency's imagery experts ... collected precious little intelligence for the analysts to analyze, and much of what they did collect was either worthless or misleading," the report states.

But there was no indication that spy agencies distorted the evidence, a charge raised against the administration during last year's presidential campaign.

It says bluntly: "We conclude that the intelligence community was dead wrong in almost all of its prewar judgments about Iraq's weapons of mass destruction ... This was a major intelligence failure."

The main cause, the commission said, was the intelligence community's "inability to collect good information about Iraq's WMD programs, serious errors in analyzing what information it could gather and a failure to make clear just how much of its analysis was based on assumptions rather than good evidence.

But the panel said that Negroponte should not be the person who briefs the president during the daily intelligence briefings or even be in the room every day when the report is given.

"For if the DNI is consumed by current intelligence, the long-term needs of the intelligence community will suffer," the report said. But Bush said, when he chose the former ambassador to Iraq for the job, that he planned to give Negroponte — who faces Senate confirmation hearings next month — responsibility for those briefings.

The report did urge Bush to give more authority to Negroponte, however.

"It won't be easy to provide this leadership to the intelligence components of the Defense Department or to the CIA," the commissioners said. "They are some of the government's most headstrong agencies. Sooner or later, they will try to run around — or over — the DNI. Then, only your determined backing will convince them that we cannot return to the old ways," the commission told Bush.

But overall, it delivered a harsh verdict. "Our intelligence community has not been agile and innovative enough to provide the information that the nation needs," the commission said, noting that other investigations have reached similar conclusions.

In an implicit swipe at the Bush administration, Senate Minority Leader Harry Reid, D-Nev., said the report did not review how federal policymakers used the intelligence they were given.

"I believe it is essential that we hold both the intelligence agencies and senior policymakers accountable for their actions," Reid said.

House Democratic Leader Nancy Pelosi said not only was the intelligence about Iraq's weapons wrong but "the president's decision to go to war in Iraq was also dead wrong — the intelligence never supported his claim that Saddam was an imminent threat to the United States."

Sizing Up America's Enemies

The panel also examined the ability of the intelligence community to accurately assess the risk posed by America's foes.

"The bad news is that we still know disturbingly little about the weapons programs and even less about the intentions of many of our most dangerous adversaries," the report said. The commission did not name any country, but appeared to be talking about nations such as North Korea (search) and Iran.

"We need an intelligence community that is truly integrated, far more imaginative and willing to run risks, open to a new generation of Americans and receptive to new technologies," the report said, in order to combat such threats.

On Al Qaeda (search), the commission found that the intelligence community was surprised by the terrorist network's advances in biological weapons, particularly a virulent strain of a disease that the report keeps secret, identifying it only as "Agent X." The discovery of Al Qaeda's work came only after the U.S.-led war in Afghanistan removed the Taliban from power.

"Al Qaeda's biological program was further along, particularly with regard to Agent X, than prewar intelligence indicated," the report says.

U.S. officials have previously said they found signs of Al Qaeda's work in anthrax weapons in Afghanistan, but it was not clear if "Agent X" referred to anthrax. Al Qaeda had not yet "achieved a functioning biological weapon with this substance," the report noted.

The panel recommended that Bush demand more of the intelligence community, saying, "The intelligence community needs to be pushed," the report said. "It will not do its best unless it is pressed by policy-makers — sometimes to the point of discomfort."

At the same time, the report said the administration must be more careful about accepting the judgment of intelligence agencies.

"No important intelligence assessment should be accepted without sharp questioning that forces the (intelligence) community to explain exactly how it came to that assessment and what alternatives might also be true," the report said.

FOX News' Liza Porteus and The Associated Press contributed to this report.