Predictably, nerves frayed. Clarke, who was widely loathed in the CIA, where he was accused of self-aggrandizement, began to lose credibility. He cried wolf, said his detractors; he had been in the job too long. "The guy was reading way too many fiction novels," says a counterterrorism official. "He turned into a Chicken Little. The sky was always falling for Dick Clarke. We had our strings jerked by him so many times, he was simply not taken seriously." Clarke wasn't the only one living on the edge. So, say senior officials, was Tenet. Every few days, the CIA director would call Tom Pickard, who had become acting director of the FBI in June, asking "What do you hear? Do you have anything?" Pickard never had to ask what the topic was.

In mid-July, Tenet sat down for a special meeting with Rice and aides. "George briefed Condi that there was going to be a major attack," says an official; another, who was present at the meeting, says Tenet broke out a huge wall chart ("They always have wall charts") with dozens of threats. Tenet couldn't rule out a domestic attack but thought it more likely that al-Qaeda would strike overseas. One date already worrying the Secret Service was July 20, when Bush would arrive in Genoa for the G-8 summit; Tenet had intelligence that al-Qaeda was planning to attack Bush there. The Italians, who had heard the same report (the way European intelligence sources tell it, everyone but the President's dog "knew" an attack was coming) put frogmen in the harbor, closed airspace around the town and ringed it with antiaircraft guns.

But nothing happened. After Genoa, says a senior intelligence official, there was a collective sigh of relief: "A lot of folks started letting their guard down." After the final deputies' meeting on Clarke's draft of a presidential directive, on July 16, it wasn't easy to find a date for the Principals' Committee to look at the plan—the last stage before the paper went to Bush. "There was one meeting scheduled for August," says a senior official, "but too many principals were out of town." Eventually a date was picked: the principals would look at the draft on Sept. 4. That was about nine months after Clarke first put his plan on paper.

A Burned-Out Case

Clarke wasn't the only person having a bad year. In New York City, John O'Neill led the FBI's National Security Division, commanding more than 100 experienced agents. By spring they were all overloaded. O'Neill's boss, Assistant FBI Director Barry Mawn, spent part of his time pleading with Washington for more agents, more linguists, more clerical help. He got nowhere. O'Neill was a legend both in New York, where he hung out at famous watering holes like Elaine's, and in the counterterrorism world. Since 1995, when he helped coordinate the arrest in Pakistan of Ramzi Yousef, the man responsible for the 1993 bombing of the World Trade Center, O'Neill had been one of the FBI's leading figures in the fight against terrorism. Brash, slick and ambitious, he had spent the late 1990s working closely with Clarke and the handful of other top officials for whom bin Laden had become an obsession.

	"The guy was reading way too many fiction novels. He turned into a Chicken Little. The sky was always falling for Dick Clarke. We had our strings jerked by him so many times, he was simply not taken seriously." —U.S. COUNTER-TERRORISM OFFICIAL

Now O'Neill was having a lousy few months. The New York City field office had primary responsibility for the investigation of the attack on the U.S.S. Cole. But the case had gone badly from the start. The Yemeni authorities had been lethargic and uncooperative, and O'Neill, who led the team in Aden, had run afoul of Barbara Bodine, then the U.S. ambassador to Yemen, who believed the FBI's large presence was causing political problems for the Yemeni regime. When O'Neill left Yemen on a trip home for Thanksgiving, Bodine barred his return. Seething, O'Neill tried to supervise the investigation from afar. At the same time, his team in New York City was working double time preparing for the trial in January 2001 of four co-conspirators in the case of the 1998 African embassy bombings. That involved agents shuttling between Nairobi, Dar es Salaam and New York, escorting witnesses, ferrying documents and guarding al-Qaeda turncoats who would give evidence for the prosecution.

Yet the FBI as a whole was ill equipped to deal with the terrorist threat. It had neither the language skills nor the analytical savvy to understand al-Qaeda. The bureau's information-technology capability dated to pre-Internet days. Chambliss says the counterterrorism investigations were decentralized at the bureau's 56 field offices, which were actually discouraged from sharing information with one another or with headquarters.

That was if the cases ever got started. An investigation by Chambliss's subcommittee found that the FBI paid "insufficient attention" to tracking terrorists' finances. Most agents in the field were assigned to criminal units; few field squads were dedicated to gathering intelligence on radical fundamentalists. During the Clinton Administration, says a former senior aide, Clarke became so frustrated with the bureau that he began touring its field offices, giving agents "al-Qaeda 101" classes. The bureau was, in fact, wiretapping some suspected Islamic radicals and debriefing a few al-Qaeda hands who had flipped. But at the end of the Clinton years, the aide says, the FBI told the White House that "there's not a substantial al-Qaeda presence in the U.S., and to the extent there was a presence, they had it covered."

The FBI didn't, and O'Neill must have known that it didn't. So, as it happens, did some of his key allies, who were not in the U.S. at all but overseas. In Europe and especially in France the threat of Islamic terrorism had been particularly sharp ever since the Algerian Armed Islamic Group launched a bombing campaign in Paris in 1995. By 2000, counterterrorism experts in Europe knew the Islamic diaspora communities in Europe were seeded with cells of terrorists. And after the arrest of Ressam, European officials were convinced that terrorists would soon attack targets in the U.S. Jean-Louis Bruguiere, a French magistrate who has led many of the most prominent terrorist cases, says Ressam's arrest signaled that the U.S. "had to join the rest of the world in considering itself at acute risk of attack."

Throughout the winter and spring of 2001, European law-enforcement agencies scored a series of dramatic hits against al-Qaeda and associated radical Islamic cells, with some help from the CIA. The day after Christmas 2000, German authorities in Frankfurt arrested four Algerians on suspicion of plotting to bomb targets in Strasbourg. Two months later, the British arrested six Algerians on terrorism charges. In April, Italian police busted a cell whose members were suspected of plotting to bomb the American embassy in Rome. Two months later, the Spanish arrested Mohammed Bensakhria, an Algerian who had been in Afghanistan and had links to top al-Qaeda officials, including bin Laden. Bensakhria, the French alleged, had directed the Frankfurt cell involved in the Strasbourg plot. And in the most stunning coup of all, on July 28, Djamel Beghal, a Frenchman of Algerian descent who had been on France's terrorist watch list since 1997, was arrested in Dubai on his way back from Afghanistan. After being persuaded of terrorism's evil by Islamic scholars, Beghal told of a plot to attack the American embassy in Paris and gave investigators new details on al-Qaeda's top leadership, including the international-operations role of Abu Zubaydah. (Now back in France, he has tried to recant his confession.) French sources tell TIME they believe U.S. authorities knew about Beghal's testimony.

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