Mike McConnell, the man President Bush tapped to replace John Negroponte as National Intelligence Director, has been a leading figure in outsourcing U.S. intelligence operations to private industry. McConnell is a former director of the National Security Agency and the current director of defense programs at Booz Allen. We take a look at McConnell and the privatization of intelligence with journalist Tim Shorrock. [includes rush transcript]

National Intelligence Director John Negroponte warned Thursday that al-Qaeda poses the gravest threat to the United States and is rebuilding its strength from secure hideouts in Pakistan. His comments were made in written testimony to the Senate Intelligence Committee as part of his annual threat assessment.

Negroponte also said that Iraq was at a violent and "precarious juncture," he stressed concern over an increasingly confident Hizbollah and outlined a series of other threats to the United States, including from Somalia, Iran and Syria.

Negroponte became the first National Intelligence director in April 2005 but is shortly due to move to the state department where he will become Condoleezza Rice's deputy. President Bush last week named retired Navy Vice Admiral Mike McConnell to replace Negroponte as the new chief of intelligence. McConnell said he would work to increase the coordination between the nation's 16 different spy agencies.

• Vice Admiral Mike McConnell: I plan to continue the strong emphasis on integration of the community to better serve all of our customers. That will mean better sharing of information, increased focus on customer needs and service, improved security processes, and deeper penetration of our targets to provide the needed information for tactical, operational and strategic decision-making."

McConnell is a former director of the National Security Agency and the current director of defense programs at Booz Allen -- one of the nation's biggest defense and intelligence contractors. Under his watch, Booz Allen has been deeply involved in some of the most controversial counterterrorism programs run by the Bush administration, including the infamous Total Information Awareness data-mining scheme. McConnell has also been a leading figure in outsourcing U.S. intelligence operations to private industry.

• Tim Shorrock, independent journalist who has been closely following this story. He is currently working on a book about the privatization of intelligence. His reports have appeared in The Nation, Mother Jones and Harpers. Read Tim's article "The spy who came in from the boardroom"