 
I was reading the July 17 New Yorker & found “The Agent: Did the C.I.A. stop an F.B.I. detective from preventing 9/11?” (pdf file here) by Lawrence Wright. It’s a long article, so some excerpts follow, starting with the main point:
In March, the C.I.A. learned that [known Al Qaeda plotter & later 9/11 hijacker] Hazmi had flown to Los Angeles two months earlier, on January 15th. … Once again, the agency neglected to inform the F.B.I. or the State Department that at least one Al Qaeda operative was in the country. Although the C.I.A. was legally bound to share this kind of information with the bureau, it was protective of sensitive intelligence. The agency sometimes feared that F.B.I. prosecutions resulting from such intelligence might compromise its relationships with foreign services, although there were safeguards to protect confidential information.
More excerpts:
The C.I.A. had officials in Yemen to collect intelligence about Al Qaeda, and Soufan asked them if they knew anything about a new operation, perhaps in Southeast Asia. They professed to be as puzzled as he was.
On Soufan’s behalf, the director of the F.B.I. sent a letter to the director of the C.I.A., formally asking for information about Khallad [an al Qaeda link between the Cole and 9/11 attacks], and whether there might have been an Al Qaeda meeting somewhere in Southeast Asia before the bombing. The agency said that it had nothing.
In April, 2001, Soufan sent another official teletype to the C.I.A., along with the passport photo of Khallad. He asked whether the telephone numbers had any significance, and whether there was any connection between the numbers and Khallad. The C.I.A. said that it could not help him.
In fact, the C.I.A. knew a lot about Khallad and his ties to Al Qaeda.
If the agency had responded candidly to Soufan’s requests, it would have revealed its knowledge of an Al Qaeda cell that was already forming inside the United States. But the agency kept this intelligence to itself.
In 1998, F.B.I. investigators found an essential clue — a phone number in Yemen that functioned as a virtual switchboard for the terror network. … But the C.I.A., as the primary organization for gathering foreign intelligence, had jurisdiction over conversations on the Hada phone, and did not provide the F.B.I. with the information it was getting about Al Qaeda’s plans.
The C.I.A. learned the name of one participant, Khaled al-Mihdhar, and the first name of another: Nawaf. Both men were Saudi citizens. The C.I.A. did not pass this intelligence to the F.B.I. … However, the C.I.A. did share the information with Saudi authorities, who told the agency that Mihdhar and a man named Nawaf al-Hazmi were members of Al Qaeda. Based on this intelligence, the C.I.A. broke into a hotel room in Dubai where Mihdhar was staying, en route to Malaysia. The operatives photocopied Mihdhar’s passport and faxed it to Alec Station, the C.I.A. unit devoted to tracking bin Laden. Inside the passport was the critical information that Mihdhar had a U.S. visa. The agency did not alert the F.B.I. or the State Department so that Mihdhar’s name could be put on a terror watch list, which would have prevented him from entering the U.S.
The C.I.A. asked Malaysian authorities to provide surveillance of the meeting in Kuala Lumpur, which took place on January 5, 2000, at a condominium overlooking a golf course designed by Jack Nicklaus. … The pay phone that Soufan had queried the agency about was directly in front of the condo. … Although the C.I.A. later denied that it knew anything about the phone, the number was recorded in the Malaysians’ surveillance log, which was given to the agency.
In March, the C.I.A. learned that Hazmi had flown to Los Angeles two months earlier, on January 15th. … Once again, the agency neglected to inform the F.B.I. or the State Department that at least one Al Qaeda operative was in the country. Although the C.I.A. was legally bound to share this kind of information with the bureau, it was protective of sensitive intelligence. The agency sometimes feared that F.B.I. prosecutions resulting from such intelligence might compromise its relationships with foreign services, although there were safeguards to protect confidential information.
The C.I.A. may also have been protecting an overseas operation and was afraid that the F.B.I. would expose it. Moreover, Mihdhar and Hazmi could have seemed like attractive recruitment possibilities — the C.I.A. was desperate for a source inside Al Qaeda, having failed to penetrate the inner circle or even to place someone in the training camps, even though they were largely open to anyone who showed up. However, once Mihdhar and Hazmi entered the United States they were the province of the F.B.I.
Mihdhar and Hazmi arrived twenty months before September 11th. Kenneth Maxwell, Soufan’s former supervisor, told me, “Two Al Qaeda guys living in California — are you kidding me? We would have been on them like white on snow: physical surveillance, electronic surveillance, a special unit devoted entirely to them.” … Because of their connection to bin Laden, who had a federal indictment against him, the F.B.I. had all the authority it needed to use every investigative technique to penetrate and disrupt the Al Qaeda cell.
In the spring of 2001, Tom Wilshire, a C.I.A. liaison at F.B.I. headquarters, in Washington, was studying the relationship between Khaled al-Mihdhar, the Saudi Al Qaeda operative, and Khallad, the one-legged jihadi. … “Something bad [is] definitely up,” Wilshire wrote to a colleague. He asked permission to disclose this vital information to the F.B.I. His superiors at the C.I.A. never responded to his request.
[O]n June 11th a C.I.A. supervisor went with the F.B.I. analyst and Corsi to New York to meet with F.B.I. case agents on the Cole investigation; Soufan, who was still in Yemen, did not attend. The meeting started in mid-morning, with the New York agents briefing the C.I.A. supervisor, Clark Shannon, for three or four hours on the progress of their investigation. … The meeting became heated. The F.B.I. agents sensed that these photographs pertained directly to crimes they were trying to solve, but they couldn’t elicit any further information from Shannon. Corsi finally dropped the name Khaled al-Mihdhar. Steve Bongardt, Soufan’s top assistant in the Cole investigation, asked Shannon to provide a date of birth or a passport number to go with Mihdhar’s name. A name by itself was not sufficient to prevent his entry into the United States. Bongardt had just returned from Pakistan with a list of thirty names of suspected Al Qaeda associates and their dates of birth, which he had given to the State Department. That was standard procedure — the first thing most investigators would do. But Shannon declined to provide the additional information. Top C.I.A. officials had not authorized him to disclose the vital details of Mihdhar’s U.S. visa, his association with Hazmi, and their affiliation with Khallad and Al Qaeda.
There was a fourth photograph of the Malaysia meeting that Shannon did not produce. … Knowledge of that fourth photo would likely have prompted O’Neill to demand that the C.I.A. turn over all information relating to Khallad and his associates. By withholding the picture of Khallad attending the meeting with the future hijackers, the C.I.A. may in effect have allowed the September 11th plot to proceed. That summer, Mihdhar returned to Yemen and then went to Saudi Arabia, where, presumably, he helped the remaining hijackers secure entry into the United States.
[T]he agency frequently decided not to share intelligence with the F.B.I. on the ground that it would compromise “sensitive sources and methods.” For example, the C.I.A. collected other crucial information about Mihdhar that it did not provide to the F.B.I. Mihdhar, it turned out, was the son-in-law of Ahmed al- Hada, the Al Qaeda loyalist in Yemen whose phone number operated as the network’s switchboard. … Had a line been drawn from Hada’s Yemen home to Mihdhar’s San Diego apartment, Al Qaeda’s presence in America would have been glaringly obvious.
After September 11th, the C.I.A. claimed that it had divulged Mihdhar’s identity to the F.B.I. in a timely manner; indeed, both George Tenet, the agency’s director, and Cofer Black, the head of its counterterrorism division, testified to Congress that this was the case. Later, the 9/11 Commission concluded that the statements of both were false. The C.I.A. was unable to produce evidence proving that the information had been passed to the bureau.
[After the 9/11 attacks] the C.I.A. chief drew Soufan aside and handed him a manila envelope. Inside were three surveillance photographs and a complete report about the Malaysia meeting — the very material that he had asked for so many times. … When Soufan realized that the C.I.A. had known for more than a year and a half that two of the hijackers were in the country he ran into the bathroom and threw up.
[T]he next day, Soufan received the fourth photograph of the Malaysia meeting — the picture of Khallad, the mastermind of the Cole operation. The two plots, Soufan instantly realized, were linked, and if the C.I.A. had not withheld information from him he likely would have drawn the connection months before September 11th.