The sacking of Dennis Blair, the third director of national intelligence in the position’s short five-year history, is one important indicator that the Intelligence Reform and Terrorist Prevention Act of 2004 has failed. That act was effective neither in achieving real reform of the sprawling intelligence bureaucracies nor in preventing terrorist attacks.

In fact, Blair’s firing came just days after the Senate Intelligence Committee issued a biting report on the multiple snafus of the intelligence agencies in failing to prevent the attempted Christmas Day terrorist attack by the BVD bomber. But although Blair didn’t get along well with Leon Panetta, the CIA’s director, or John Brennan, the White House’s de facto intelligence chief, a primary reason for such friction was that he had to fight turf wars in an attempt to give his young office some relevance in the new intelligence structure.

The DNI was borne out of massive intelligence failures leading up to 9/11 and concerning Iraqi weapons of mass destruction. The problem was that the plethora of secretive and mutually suspicious intelligence agencies weren’t coordinating very well with each other. At the time, the director of central intelligence (DCI), then the same person as the CIA director, was nominally in charge of coordinating the collection, analysis, and dissemination of intelligence among the multitude of agencies. The DCI ran into the problem of not having enough authority over the personnel, budgets, and operations of the other agencies to do the job. The DNI, which replaced the now defunct DCI, has the same problem, except that he is in worse shape because he’s not really even the head of a substantial intelligence agency, as the DCI/CIA director was.

In short, the coordinating role was passed from one of the participating agencies—CIA—to a new layer of bureaucracy above the now 16 intelligence agencies. Blair, without even a home agency to manage, repeatedly lost turf wars, which undermined the authority of DNI’s coordination role. For example, Leon Panetta, the current CIA director, beat out Blair to win the right to choose the top U.S. intelligence official in each foreign country. In doing so, Panetta sent a memo telling CIA personnel to ignore a Blair directive. Also, the CIA worked to cut the size and power of the DNI’s staff, and Blair failed to rein in CIA covert operations adored by the White House. But although Blair’s connections in and relations with the White House were lousy, his two Republican predecessors also loft turf battles with the intelligence agencies and failed to achieve reform.

Yet, at the time the intelligence reorganization was enacted, it was entirely predictable that it would fail. About 85 percent of the intelligence community’s budget is controlled by the behemoth Department of Defense. Simply creating a new “neutral” agency and shifting the intelligence coordination role from the CIA to it does nothing to alter this fact. More important, smooth coordination among agencies, the original shortfall, was not helped by creating a new DNI and accompanying bureaucracy.

The intelligence community structure evolved during the Cold War to counter another nation-state—the Soviet Union—that had a bigger bureaucracy than the United States. Yet now the primary enemy is small, agile terrorist groups that don’t have to fill out bureaucratic forms before launching an attack. Yet after intelligence failures leading up to 9/11 and in Iraq, the Bush administration and Congress, pretending to do something about lagging intelligence cooperation, proposed to fight such enemy agility by adding another layer of officialdom and making the potential for coordination problems worse. The snafus surrounding the failure to foil even the ham-handed BVD or Times Square bombers are illustrative of the enhanced incompetence. In the “war on terror,” the Bush administration and Congress also took a similar approach by squishing together unrelated domestic security agencies and creating more bureaucracy—the Department of Homeland Security—to sit on top of them. Predictably, many analysts now regard that “reform” as an abject failure.

In the age of more nimble opponents, the U.S. government needs to move in the opposite direction. Instead of adding bureaucracies, Congress, to improve coordination, needs to eliminate some intelligence and homeland security agencies and consolidate the remaining intelligence and homeland security functions. Only with a streamlined bureaucracy can the U.S. government hope to be most effective against groups such as al-Qaeda.