For the past month, the world has watched as the U.S. Congress investigates whether intelligence failures kept the FBI and CIA from stopping the Sept. 11 attacks. But at the same time, Germany has quietly been doing some soul searching of its own. In the late 1990s, a surveillance action dubbed Operation Tenderness, carried out by the Federal Office for the Protection of the Constitution (BfV), came close to uncovering the Hamburg cell that harbored several of the 9/11 plotters. But German intelligence officials, like their American counterparts, were unable to connect the dots. Now the German government is finally debating whether it can effectively fight terrorism without a radical overhaul of its cherished federalist system. "It must be a cause for concern that we didn't recognize what the perpetrators, who resided in

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nginx/1.14.0 (Ubuntu) Germany for some time, were brewing up before Sept. 11," Interior Minister Otto Schily told TIME.

From his window-lined 12th-floor office on the banks of the River Spree, Schily has a commanding view of the German capital. But as chief of Germany's war on terrorism, his sights are often clouded by the country's overly complex network of independent state-run police and intelligence services. Take the morning of March 11, when European governments were scrambling their antiterror forces in the wake of the Madrid train bombings. Ideally, Schily would have liked to call a crisis meeting of top officials from the BfV, the Federal Criminal Police (BKA) and the Federal Intelligence Service (BND). But only the BND is located in Berlin. The BKA is headquartered 571 km away in Wiesbaden, while the BKA's counterterrorism unit is located in bucolic Meckenheim, near Bonn, some 600 km from Berlin. The BfV, which gathers domestic intelligence and keeps tabs on suspected jihadists, is in Cologne. As a result, Schily held his crisis meeting by phone. "Just imagine if we have to react rapidly," he says. "That worked well enough after the attacks in Madrid. But the decisive question is, what is the optimal situation for effective crisis management and to coordinate prevention strategies?"

One obvious solution, proposed by Jürgen Rüttgers, head of the Christian Democratic Union in North Rhine Westphalia, is to create a strong federal domestic intelligence agency and put the 16 state offices under its control, then give the BKA greater investigative powers and move the agency to Berlin. The trouble is, the states refuse to cede any power to the federal government. State officials say what's needed is improved cooperation, not centralization. At the end of last year, BKA president Ulrich Kersten proposed moving his team to Berlin, sparking massive protests by employees and local politicians who feared the economic consequences. Schily removed Kersten from his post and created a commission to study the plan. Its recommendations are expected by early summer.

Germany's fragmented security structure dates back to the end of World War II, when the Allies broke up the Nazi agencies in order to prevent a resurgence of the Gestapo. Police were also banned from gathering domestic intelligence, so each state created its own intelligence agency, which coordinates with the other agencies but only reports to its own state government. Schily reasons that if he can't make the BKA and other agencies come to him, the next best thing is to centralize intelligence collection and analysis at the BfV. He also wants to move the part of the BKA that collects and analyzes information to Berlin. "We need greater networking with the Interior Ministry," he says. "That's why it's certain that the BKA facilities in Berlin will be significantly enhanced."

Once German agencies have information on suspected terrorists, other World War II-era laws require police to destroy files on individuals, further complicating operations and alienating allies. "It took us over a month to get German officials to approve certain requests," says a French counterterrorism official, recalling cooperation between France and Germany in 2000 to thwart a planned attack on the Strasbourg Christmas market by a Frankfurt-based cell. "And that was only after we'd provided clear, irrefutable proof France was being targeted for attack. It's really frustrating dealing with them."

Manfred Murck, deputy director of the Hamburg office of the BfV, defends the federal system's advantages. It enhances local intelligence gathering, he argues; the real problem is timely analysis and dissemination. Everyone agrees on the need for improvement, but some think a little tinkering will do. Not Schily. In the war against terrorism, he says, "We can't wait for lightning to strike before we jump into action."

• WILLIAM BOSTON | Berlin
• Can Germany reform its security services?