The so-called Counter-Intelligence Field Activity (CIFA) is being absorbed into a new Defense Intelligence Agency (DIA) center that will be in charge of both espionage and counter-intelligence activities, the Pentagon said in a statement.

"The Department of Defense activated the Defense Counterintelligence (CI) and Human Intelligence (HUMINT) Center today, and simultaneously disestablished the Department's Counterintelligence Field Activity," the Pentagon said.

CIFA was created under former defense secretary Donald Rumsfeld in 2002 as a separate entity to conduct counter-intelligence efforts against suspected terrorists in the United States.

It came under fire in December 2005 following disclosures that it had kept unverified surveillance reports of anti-war activists in a database.

CIFA was empowered to conduct counter-intelligence investigations, but most of its operations remain classified. It reportedly grew to employ about 1,000 people.

"CIFA's designation as a law enforcement activity did not transfer to DIA. The new center will have no law enforcement function," the Pentagon said.

The Pentagon portrayed the changes as being part of a reorganization aimed at better integrating the Defense Department's counter-intelligence and human intelligence activities.

The new center is led by Major General Theodore Nicholas.

"Integration under one organization will result in greater collaboration in operational and support areas where both disciplines overlap," he said in a statement.

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