I am tremendously honored to be with you this evening. Many of our nation's most prominent leaders and jurists have strolled the grounds of this magnificent law school and this magnificent campus. Chief Justice William Rehnquist and Sandra Day O'Connor, both members of the Stanford Law School Class of 1952, for instance, are joining you this weekend.

I also should start off by saying that all of you know that the President Emeritus of Stanford University is a gentleman named Donald Kennedy. What you may not know is that there was another Donald Kennedy who attended Stanford undergraduate, as well as Stanford Law School. He was the first FBI Special Agent to graduate from Stanford and its law school. Special Agent Kennedy earned his bachelor's degree in 1932 here at Stanford and his law degree in 1936. In 1937, showing eminent good judgment, he joined the Bureau. He came to the FBI at a time when the annual salary for a Special Agent was $3,200 a year -- about what a newly minted Stanford lawyer now makes in a week. I see some law students here, and while I'm not necessarily here on a recruiting mission, I do want to tell you that even though I can't promise you great wealth should you join the Bureau, we have increased the salary of the new Agents rather significantly since the time Donald Kennedy walked these halls.

Dean Sullivan, I want to thank you for the honor of receiving the Jackson Ralston Prize. As you pointed out, Mr. Ralston was a noted, distinguished international lawyer, and not only am I honored by being a recipient of this award, I am also tremendously honored to be in the company of previous winners such as Warren Christopher and Jimmy Carter. It makes you wonder whether you really deserve to be included among such individuals. I feel a little bit like the late Jack Benny. When he was being honored some years ago, he said, "I'm not sure if I deserve this award, but on the other hand, I have arthritis, and I don't really deserve that either."

Since I'm on the campus of such a distinguished law school and such a distinguished college, I want to spend a few moments this evening talking about a topic that is certainly on my mind, but a topic that is very much on the minds of all of us here in this auditorium tonight and very much on the minds of the American people. That topic is terrorism.

As you may know, I took over as Director a week before the September 11th attacks. Global terrorism, and the FBI's response to what happened on that day, is something that I and almost everyone in the Bureau thinks about for the better part of every day.

I would like to use this forum to continue what I believe is a critical discourse in our country. As part of this discourse, I would like to reflect with you this evening on three issues. They are: first, the difficult challenges we face in addressing terrorism; secondly, being somewhat parochial, the FBI's response to what occurred on September 11th; and, thirdly, and perhaps most importantly, the very delicate balance we must strike as a society to protect both our homeland, on the one hand, and our civil liberties on the other.

Let me speak for a moment about the challenges we face in addressing terrorism.

The tragedy of September 11th unfolded before our eyes on television, and yet it is I think sometimes difficult for us to fully comprehend the magnitude of the destruction and the terror of that awful day. Certainly, if you were in Washington, D.C., or in New York City, you had a more deeply felt comprehension of what occurred on September 11th. But I think we all must recognize that terrorism, and the war against it, did not start on September 11th and nor will it end any time soon. And the issues we discuss today, when we contemplate this war, are issues that many of you out here in the audience will grapple with as lawyers, educators, and leaders.

Our recent history in this country reflects growing threats from a variety of groups and individuals. Certainly, religious extremists associated with al Qaeda have attacked American targets for almost a decade, including the 1993 bombing of the World Trade Center. But al Qaeda has not been the only threat. Prior to September 11th, Hizballah had killed more Americans than any other terrorist group. Other terrorist organizations have launched strikes like the one we saw on Khobar Towers in Saudi Arabia in 1996. And when we discuss terrorism, we cannot forget domestic terrorism and domestic terrorist groups who operate in our own country. These groups, espousing racial supremacy principles and anti-government rhetoric, are a serious menace, as we came to understand by the April 1995 bombing in Oklahoma City.

And when we talk about those attacks that were successful, we should not overlook the fact that many attacks have also been prevented. These have largely been forgotten. Successful strikes generally get more attention than preventions. But how many thousands of Americans would have died if anti-government extremists had blown up two large propane fuel tanks in Sacramento three years ago, as had been planned? How many would have died if international terrorists had not been stopped from blowing up a series of New York landmarks in 1993? How many would have died if Ahmed Ressam had succeeded in bombing Los Angeles International Airport on New Year's Eve in 1999?

These attacks, both those that have been prevented and those that have not, are testimony to the difficult challenges that face our country.

Now let me spend a moment talking to you a little bit about the events of September 11th and what we came to find out about the individuals responsible for those events.

In the weeks and months immediately after September 11th, after we had addressed the initial concern about whether or not there was another wave of terrorists out there anxious and ready to take over planes, after we had satisfied ourselves that we had put into place reasonable security to protect the airlines, our investigation looked to identifying those 19 individuals who were responsible for hijacking these planes and running them into the World Trade Center buildings in New York, the Pentagon in Washington, D.C., and that field in Pennsylvania.

What we found was that the hijackers operated, paradoxically, hidden in plain view. Those that took over the four planes that day were 19 in number. There were 15 from Saudi Arabia, two from the United Arab Emirates, and one each from Egypt and Lebanon. Their plans were conceived, developed, and approved by al Qaeda leadership out of Hamburg, Germany; in meetings in Malaysia; and certainly with the approval of the al Qaeda leadership at meetings in Afghanistan.

In the months that preceded September 11th, each of these 19 hijackers entered the country with lawful visas. They used our schools -- particularly the flight schools -- motels, restaurants, and transportation systems as they hatched the plans to launch their assault.

None of them had computers. They all used Kinkos or public-access opportunities to get on the Internet to communicate, and when their communications were not on the Internet, they were personal. They used a total of 133 prepaid calling cards to make telephone calls from kiosks and other buildings. They shopped at Wal-Mart. They ate at Pizza Hut.

In many ways, they turned the liberties we most cherish in this nation against us. And the hijackers of September 11th, and the other terrorists we are currently confronting, present a new challenge to us. Unlike the enemies of the past, these terrorists do not wear uniforms and do not operate within defined borders. What is perhaps most chilling is that they will stop at nothing to further their goals, whether that means sacrificing innocent lives or even their own.

To meet this new challenge, we in the FBI have had to dramatically reorient our mission and our resources.

Shortly after the planes hit on September 11th, more than half of our 11,500 Agents suddenly found themselves investigating terrorism matters. Today, we have twice the number of Agents permanently assigned to the war on terrorism as we did prior to September 11th.

Of course, we will continue to investigate criminal cases and are proud of our work in such areas as violent crime, organized crime, financial fraud, civil rights, and public corruption. But in the wake of September 11th, our first and abiding priority, plain and simple, is counterterrorism. That priority is to stop another attack like we saw on September 11th. To do that, we have to enter into an age of preventive investigation. At the heart of our attack on counterterrorism is this massive redeployment of Agents from other programs.

Let me talk for a moment about another aspect of the battle on terrorism, and it's being waged on the intelligence side of the house. We are often called a law enforcement agency, but we are called upon, in addressing terrorism, to be an intelligence agency as well and to develop ties with other intelligence agencies in this country and our counterparts, both here and overseas.

Every morning since September 11th, I, along with George Tenet, brief the President on what has happened in the last 24 hours in this country with regard to the war on terrorism. The President does not ask and has not asked, how many indictments have you returned or how many people have been arrested? He asks both George and I, what has been done in the last 24 hours to protect this country against terrorism?

And so for us as an institution, and for the CIA, it comes from the top. Our mission is to prevent another terrorist attack. And critical to our response is our ability to share essential information throughout the FBI and throughout the rest of the government, including the CIA, the DIA, other federal agencies, as well as state and local law enforcement agencies.

I will say that the thought of regularly sharing Bureau information is something that J. Edgar Hoover would likely have resisted, and he may well be turning around in his grave to understand the extent to which, since September 11th, there has been the interchange of information between ourselves and the CIA.

Today, we have an Office of Intelligence within the FBI to ensure that our information is shared not only throughout the Bureau, but throughout the rest of the government. We have a number of employees assigned to the CIA Counterterrorism Center, and the CIA has eight managers and dozens of analysts assigned to FBI's Counterterrorism Division. Each of those individuals has unfettered access to the computer databases and communication systems of the other agency. Speaking for what we do at the FBI, I have a CIA official who joins me at the two briefing sessions I get each day on what has happened in the last 24 hours, not only in the United States, but also around the country in the war on terror.

As I mentioned, we are also sharing information with local law enforcement officers. We are doing this generally through one of 56 joint terrorism task forces throughout the country, where we have FBI Agents sitting down with DEA Agents, sitting down with local police officers and state troopers. We sit shoulder-to-shoulder in the communities of each of those 56 field offices and talk about the latest reports, how we address them, and what information is coming from overseas so that whenever we have a threat, we are addressing that threat together.

The timely sharing of that intelligence is absolutely critical to our counterterrorism mission, and one of the things we have done in order to expand on this joint terrorism task force concept is to produce a weekly FBI Intelligence Bulletin. We have, in the United States, over 17,000 law enforcement agencies and 60 separate federal agencies. This bulletin we put out provides information about terrorist issues and threats of terrorism that come from overseas or within the United States. These contacts, as you can well imagine, often lead to intelligence about terrorist threats and, indeed, it was the initial information from local police officers that led to the indictments and arrests in Buffalo, New York, and Portland, Oregon, that we heard about over the last several weeks.

Finally, as part of our response to this new mission, we have embarked on a comprehensive overhaul and revitalization of our information technology infrastructure. Our technological problems are deep-seated and somewhat complex. On the one hand, we are on the cutting edge of technology when it comes to addressing attacks on computers -- whether it be worms or viruses, denial of service attacks, or hacking attacks. But we are not on the cutting edge of giving each of our Agents the computer support, the access to databases that we need to do a better job in pulling together the intelligence, analyzing the intelligence, and then disseminating the intelligence that we bring in across the country and across the world. We are currently undertaking a massive overhaul and restructuring of our information technology so that it will facilitate that intelligence analysis, which is the key to identifying, predicting, and preventing terrorist attacks.

Now, I want to talk for a moment about the balance we must strike to protect our national security and our civil liberties as we address the threat of terrorism.

Jackson Ralston, later in his life, as Kathleen pointed out, served as the Chairman of the ACLU in Northern California, and I would venture to say he might have been surprised that an award bearing his name is being given to the Director of the FBI, particularly at a time in our nation's history when the tension between our civil liberties, on the one hand, and our national security, on the other, has been thrust to the forefront. I do believe, though, that Mr. Ralston would be rather pleased by the fact that we are here today talking about these issues, both this evening and earlier today in various seminars, and also I think he would believe that there is that capability of supporting civil liberties and assuring the national security of the United States. I do believe that they are not mutually exclusive.

I will say at the outset, as we all know, our nation does not have an unblemished record of protecting constitutional freedoms during times of crisis. In 1919, in the midst of a "Red Scare," and following the detonation of bombs in eight American cities, President Wilson's Attorney General, Alexander Palmer, arrested thousands of "leftists" and "radicals," during what was called the "Palmer Raids."

During World War II, thousands of Japanese Americans, based solely on their ancestry, were confined in relocation camps. In 1944, the Supreme Court in the Korematsu case, as we all know, ruled that all members of a single ethnic group could be confined, even without individualized evidence, because some members of that group might be disloyal and pose a threat to the nation.

And for the FBI, as recently as the 1960s and the '70s, we were found to have run a counterintelligence program, infamously known as COINTELPRO, that targeted persons involved in civil disobedience with investigative measures that crossed the line.

We live in perilous times, but as these examples illustrate, we are not the first generation of Americans to face threats to our security. And like those before us, we will be judged by future generations on how we react to this crisis. And by that I mean not just whether we win the war on terrorism, because I believe we will, but also whether, as we fight that war, we safeguard for our citizens those liberties for which we are fighting.

We are a nation of laws, and every Special Agent of the FBI is sworn to uphold and protect those laws. The men and women who serve in the FBI do just that every working day of their lives. But we are also aggressive, and we do not -- and I do not -- shy from using every arrow that Congress has put in our quiver.

In the wake of the September 11th attacks, Congress granted us new and enhanced authority to investigate terrorism. The USA Patriot Act, passed in October of 2001, tore down many of the walls that formerly inhibited information sharing between law enforcement and the intelligence community, and I welcomed those changes. And we use the Patriot Act to our fullest advantage, but not at the expense of the constitutional rights of our citizens.

Still, questions abound. At the heart of these questions is this: How do you prevent, how do you deter, or how do you disrupt terrorist attacks before they have been initiated? How aggressively should the FBI investigate suspicious activity that might be related to terrorism? When is surveillance or a wire tap necessary or warranted? These are not always easy questions to answer, particularly when the prevailing terrorist threat originates from, and therefore our primary investigative focus is directed at, a group of terrorists who generally share a common ethnic and religious background.

In that regard, let me start with the premise that I believe firmly, and that is the overwhelming majority of Muslims, whether in this country or overseas, are peaceful, law-abiding citizens. However, a small number of Muslims are members of radical fundamentalist sects sworn to the destruction of the United States, and this presents a dilemma for those charged with protecting against the next attack, raising very difficult investigative issues for which there often is no clear answer.

An example, when, if ever, would it be appropriate to put leaders of Muslim mosques under surveillance? Are calls to kill Americans in strident sermons a lawful exercise of free speech or something more, warranting not only investigation, but also court-approved electronic surveillance?

The answer to these and many similar questions, I believe, in part, is to assure that for us there is an adequate predication for each step of an investigation. We do not target individuals or groups by reason of their country of origin or nationality. Rather, we take investigative steps when there is a factual basis justifying that step.

Can we be too aggressive? Or in the post-September 11th world, is there such a thing as too aggressive? I would say, yes, I believe there is. But by assuring that there is adequate predication for each step of an investigation, we protect against over aggressiveness and avoid the excesses of the past.

These are issues that we wrestle with every day in the FBI, whether it be Agents in the field or personnel back at headquarters. I should point out we are not the policy makers, and some of the questions and debates, and probably questions perhaps that I will get this evening, are beyond our purview. What we in the FBI must concentrate upon is obtaining the facts and then presenting them in an objective, unbiased manner to other decision makers, whether they be the prosecutors at the Justice Department or the policy makers in the National Security Council, or even the President.

I must say, in the same breath, however, that in seeking those facts, the FBI must use the tools that Congress gives us, all of the tools consonant with our obligation to protect the citizens of the United States and the Constitution. For either, without the other, is of little value. We must not shy away from investigating aggressively any real threat. And because there are no perfect answers to any of these difficult questions posed in the course of these counterterrorism investigations, we have but one option, and that is to investigate vigorously any threat to the citizens and interests of this nation, whether at home or abroad, while carefully observing the constitutional rights of all.

For the FBI and for the United States, the war on terrorism is a complex and perplexing issue. It is as complex and perplexing as any threat this country has ever faced. Whether the threat comes in the form of anthrax-laced letters or the deadly sniper attacks in the neighborhoods around the nation's capital or in the form of a devastating bomb blast in faraway Bali, it is imperative that we use the full weight of the law, every arrow in our quiver, to bring these terrorists to justice.

I know we will be judged by history, not just on how we disrupt and deter terrorism, but also on how we protect the civil liberties and the constitutional rights of all Americans, including those Americans who wish us ill. We must do both of these things, and we must do them exceptionally well.

I must say I am humbled by the honor that you have bestowed upon me this evening. I hope I can live up to that honor, and I thank you for being a continuing part of this exceptionally important and ongoing debate.

Thank you, and God bless you.