We have before us today two distinguished former directors of Central Intelligence. Both of our witnesses have well-deserved reputations in dealing with both defense and intelligence issues and I'm glad they are both here with us today.

Our witnesses are Doctor John Deutch, who served as President Clinton's deputy secretary of Defense and then CIA director, and Ambassador James Woolsey, who served as the President's first CIA director. Welcome, officially, gentlemen, and thank you for taking time from your busy schedules to be with us here today.

Last year at about this same time we received testimony from several former CIA directors, including Ambassador Woolsey. Last year's hearing was very productive and informative. I personally find it helpful to receive a broad overview of the evolving national security environment at the outset of the budget cycle. In this regard, I'd like to draw members' attention to the fact that, in addition to today's hearings, we are also scheduled for a closed briefing with the intelligence community on February the 25th.

The question of what threats and challenges the United States faces now and will face in the future is at the heart of all of our deliberations of our nation's security. I've taken exception with the administration's bottom-up and Quadrennial Defense Review, QDR most fundamentally for being budget, not threat and strategy-driven. So I believe that hearings like this morning's are particularly important for the committee as we begin deliberations over the fiscal year '99 defense budget.

Several years ago, in the immediate aftermath of the Cold War, there was an optimism among some of the United States no longer - that the United States no longer faced any significant threats in the world. Some even speculated that the centuries-long pattern of conflict between nations had ended and that conflict between peoples and nations would become obsolete. Less than a decade has passed since the collapse of the Soviet Union, but it's already clear that we, that the world will remain a very dangerous place.

Rogue states like North Korea, Iran, Iraq no longer restrained by a bipolar superpower balance of power and increasingly desperate due to their isolation, and growing internal economic and political problems are perhaps more threatening to their neighbors and to our interests than they were during the Cold War. Ethnic, tribal and religious violence has been a constant feature of the post-Cold War that we're faced with.

And our troops have been sent, on more than one occasion, to respond to what the Pentagon refers to as smaller-scale contingencies. One of these, in Bosnia, has become a large-scale commitment that promises to be the central mission of our forces in Europe for years to come. And the list of peacekeeping commitments continues to grow from the Sinai to Haiti to Somalia to Rwanda.

Nor has the end of the Cold War brought an end to great power competition. China, economically backed with -- (inaudible) -- poorly armed throughout most of the Cold War is using its robust economy to modernize both its conventional and nuclear forces. China currently has more strategic missiles under development than any other nation. Beijing and Moscow claim to have buried their Cold War hostilities and formed a strategic partnership.

Unfortunately this partnership entails significant transfers of advanced weapons and military technology from Russia to China. And Chinese support of Russian political goals, such as opposition to NATO enlargement and to possible US, United States military action against Iraq. Russia's future is far from certain as well as democracy is not yet firmly established. Indeed, according to a study last year headed by William Webster, former director of the CIA and the FBI, Russia's fast becoming an unstable kleptocracy, armed with nuclear weapons.

Perhaps most disturbing of all, unprecedented threats are likely to arise from the proliferation of missiles and weapons of mass destruction. I heartily agreed with President Clinton's warnings raised in his State of the Union speech that international predators will be all the more lethal if weapons of mass destruction fall into their hands. But it's going to be difficult, and make our international agreements and arms control treaties to address this problem, more of a problem.

Of our potential enemies during the Cold War, only the Soviet Union and China had the capability to strike United States cities with missiles. But now ballistic missile technology is proliferating at a rate faster than ever before. We may well be surprised by a missile threat that can reach the United States from countries like North Korea or Iran sooner than expected, before the United States can deploy a cost-effective missile defense.

We've already been surprised by North Korea's development of a Nodong medium-range missile, which poses a serious threat to Japan and our troops stationed there. Last month, CIA Director George Tenet testified in the Senate that Iran's success in gaining technology and material from Russian companies combined with recent indigenous Iranian advances means that it could have a medium-range missile much sooner than I asserted last year. Last year the CIA concluded that Iran might develop a medium-range missile in less than 10 years. Now we are told that Iran might have such a missile in eighteen months.

While Director Tenet acknowledged the substantial difference between the two estimates, the rapidly evolving nature of this threat indicates just how uncertain and dangerous the post-Cold War really is. Therefore, I look to our distinguished witnesses to enlighten us on these trends, threats and challenges this nation faces in the years ahead. Gentlemen, once again, I look forward to your testimony, but before we begin, I'd like to recognize the committee's new ranking Democrat, Mr. Ike Skelton, for any remarks he'd like to make.

 

OPENING STATEMENT OF

IKE SKELTON
A Representative from Missouri, and
Ranking Member, House National Security Committee

 

REP. IKE SKELTON (D-MO): Thank you so much, Mr. Chairman. I, first I thank you for your kind words a few moments ago. Allow me, Mr. Chairman, to join you in welcoming our distinguished guests to address this committee about the threats to the national security of our country. Jim Woolsey and John Deutch, old friends of yesteryear, are veterans of in the national security business with experience in a variety of government positions reaching back more than two decades.

Today's hearing will also help set the stage for the hearing in two weeks, when the deputy director of Central Intelligence and the director of the Defense Intelligence Agency come before us to give their worldwide threat briefing.

Two decades ago the complexities of the Cold War dominated security and defense concerns of American national security decision- makers. Those days are gone. Today because of expanding technologies and more fluid international order, the business of intelligence is more complex than ever before. The challenges are numerous: proliferation, rogue states, terrorism, China, Russia, drug trafficking, the security of information systems, regional hot spots, humanitarian crises and others.

This hearing provides the public an opportunity to hear about these challenges and also gain a greater appreciation for the difficulties that policy makers confront today in attempting to make responses to these challenges.

One word of caution; last year James Schlesinger noted the tendency at times to overstate the threat. He cited the issue of oil and access to oil, which was a critical national issue in the 1970's. It's interesting to see how this issue has receded in importance since that time. Mr. Chairman, we must address the threats, maintain our perspective and rank them in some order of priority.

On a more personal note, this is my first appearance as the ranking member of the National Security Committee. It's an honor and a privilege offered me by my Democratic colleagues. My goal is to provide for the common defense. Allow me to make three points. The first, I believe that national security and defense policy should be bipartisan.

The men and women in uniform whom we support by our efforts here serve the national interest, not any partisan or political interest.

That has guided my efforts in defense matters over the years. We should be ever mindful of the men and women who wear the American uniforms; their welfare and their ability to perform successfully should be our polestar. I want to work with my colleagues on both sides of the aisle, senior and junior alike, in this important effort.

Second, I want to work with both the President and his Secretary of Defense in these matters. I may not always be able to, but that will always be my first inclination, as it has been since I first came to Congress. I have a great appreciation for the heavy burdens we ask of these two gentlemen to carry. Individuals who hold these two positions can bring about positive change. Abroad the Cold War is over. At home our national finances are back in balance. However, much work remains to be done, as our witnesses will remind us today.

Finally, I want to work with the Chairman and all my colleagues here to promote the effectiveness and influence of this committee. I believe in the importance of the committee to set the agenda to conduct oversight and to set spending levels. This committee is the buckle of the belt between the Department of Defense on the one side and the Congress as a whole on the other. We make the case for those important DOD policies and programs with our colleagues in this body.

At the same time, we also provide the Department of Defense an estimation of what the traffic will bear. If we're able to remain - if we are to remain relevant in this process, we need to pass our bill on time and not get hung up as we did last year. I want to work with the Chairman as much as possible in this important effort. Mr. Chairman, thank you for holding this hearing. I look forward to the testimony of our two witnesses.

Thank you.

REP. SPENCE: Thank you, Mr. Skelton.

Before we begin, without objection, I'd like to announce that both of your statements can be submitted for the record and with that Doctor Deutch, you want to proceed?

 

STATEMENT OF

JOHN DEUTCH
Former Deputy Secretary of Defense, and
Former Director, Central Intelligence Agency

 

MR. JOHN DEUTCH: Thank you very much, Mr. Chairman.

It's a great pleasure to appear, once again, before this committee, especially as a private citizen, a person who has his own thoughts and doesn't live in area code 202.

I want to review very briefly for the committee the judgements that I have about the security challenges our country face and also to highlight a few defense and intelligence programs that I believe deserve this committee's strong support. First of all, Russia. Russia should continue to be our top security concern even though we don't have the same adversarial relationship that we had during the Cold War.

Why? Because Russia still possesses 20,000 plus nuclear weapons and at the same time there is widespread corruption. The absence of honest and accountable government in Russia and absence of administrative functions which are slowing Russia's erratic and periodically movement towards a democratic government and a market- oriented economy. Thus it is critical that we follow internal political developments in Russia most slowly, most carefully and we must also follow, as carefully as possible, Russian foreign policy activity for example, as the Chairman mentioned, relations with Iran which are an indicator of Russian attitudes towards the United States and the West.

The United States cooperative threat reduction efforts which have been supported by the Congress and most of which are funded in the Department of Defense budget are accordingly of continuing importance. The objective of these efforts is to lower the risk of loose nukes by reducing the number of active nuclear weapons and strengthening Russia's ability to manage, control and account for their nuclear stockpile and their strategic nuclear materials. Both programs deserve the support of this committee.

Second in order of priority is China. In contrast to Russia, China has adopted a very different strategy, a strategy which is based on economic liberalization while maintaining absolute internal political control. Whether this strategy is viable over the long-term remains to be seen. For example, it is questionable whether China will be able to successfully re-engineer its vast state owned enterprise.

So for the next decade, we must have very modest expectations about China's development and in particular our ability to influence Chinese development and modest expectations about our ability to come to agreement on issues that are more important to us than they are to them, non-proliferation, trade, human rights and the environment. So it is unclear in the long term how US-China relations will evolve.

Therefore, it is of paramount importance for the United States to maintain a very strong presence in the pacific region and strong alliance relationships most particularly with Japan. The uncertain future on the Korean peninsula and the situation with respect to Twain reinforces this need for a forward presence by the United States military in the pacific and strong alliance relationships. Third, let me speak about Iraq, Iran, and other rogue countries. The past two administrations have adopted a dual containment policy towards Iran and Iraq. I think we all recognize that despite different reasons neither of these policies has been a smashing success. In the case of Iraq, while Saddam is increasingly militarily constrained by the United States and it's coalition partners, he continues to be a major threat to security in the region and the cause of misery among the Iraqi people.

Finding an alternative to Saddam Hussein should remain a high priority for US policy. Because Saddam continues to frustrate international inspections, there is good reason to believe that our allies and our coalition partners will to some extent assist in our efforts to thwart production of weapons of mass destruction in his country.

On the other hand, Saddam Hussein enjoys and continues to enjoy considerable sympathy in the Middle East and elsewhere. He remains politically strong because of his skill in balancing completing political interests in the regime. I understand that this committee is interested in my views on potential of air activity against Iraq in the near future.

Let me say quite bluntly that I think that the administration is doing exactly the right thing as it considers and is exploring with its allies the use of US air power against Saddam. On the other hand, I think that the problem of Iraq is a very difficult one indeed and it will not be solved magically by an air campaign. We should understand clearly what is possible and what is not possible, what should be expected and what should not be expected from air operations.

Let me first say what I believe can be expected by an air campaign against Saddam Hussein. First of all, it is a notice to Saddam Hussein and his government that he cannot thumb his nose at UN inspections. Secondly, the air strikes will inflict damage both on Iraqi military establishment and destroy some known and suspected weapons of mass destruction sites. Third, these air strikes, I believe, will indirectly encourage Iraqi anti-Saddam Hussein elements wherever they may be inside in the country or elsewhere so that the air strikes indicate to those who oppose Saddam Hussein, those Iraqis who oppose Saddam Hussein that the US stands against his tyranny as well.

But what will air strikes not do? That is just as important to understand. I do not believe that an air campaign will topple the Saddam Hussein regime in the short run. We can not expect that even a very extensive air campaign will lead to his removal from power. Secondly, an air campaign is unlikely to destroy all the stock of biological or chemical agents or missiles that Saddam Hussein has. In any event, even if they were able to despoil these stocks many of his capabilities could be rapidly rebuilt by Saddam Hussein after the cessation of the sir strike. There are those who call our approach to air operations against Iraq as being sending a very soft signal, as not sending the right kind of signal. I disagree with that assessment. I think it sends an important signal and I would also ask the committee to remember that doing nothing would send an even worse signal around the world to what behavior Saddam Hussein has recently exhibited in his unwillingness to permit UN inspections to go forward.

Let me turn next to Iran. The situation with Iran is quite different with Iraq. Despite a clear record of sponsoring terrorism and advocating extremist Islamic separatists policies, our European allies, Japan, Russia and others have shown progressively less willingness to attempt to influence Iranian behavior by the use of sanctions especially as opportunities to do business with Iran loom larger.

Without denying either the record of Iran or the character of Iranian policy, I believe it is time to begin to explore replacing the current policy of containment with a policy of measured engagement where step by step political and economic normalization would accompany verifiable progress on key issues, cessation of state sponsored terrorism, cessation of work on weapons of mass destruction, support for the Middle East peace process and greater respect for the individual. There is some indication as of a yet uncertain value that Iran is receptive to an alternative approach, we shall see but should explore.

While there are significant differences between those nations and others that we classify as rogue states, Libya and North Korea, none of them have abandoned their efforts to acquire greater nuclear chemical and biological capability. Accordingly, I urge this committee to continue to support the counter proliferation programs of the Department of Defense.

Finally, terrorism. Terrorism is a growing threat to our governmental infrastructure, to international business, and to our citizens both at home and a broad.

There is a new character to this terrorist threat. It is the possibility that terrorists will use weapons of mass destruction. It is the growing international scope of terrorist organizations and terrorist activities. And third it is the vulnerability of our critical government infrastructure with telecommunications and control systems that regulate every day life to interference by terrorist organizations. Now there is wide spread awareness to the foreign terrorist threat in the United States today and to the government.

The progress in marginally efforts to protect us against these terrorist threats a lot remains to be done. The roles of the different government agencies involved in combating terrorism, Defense, Intelligence, and law enforcement must be better defined, and effective counter terrorism programs must be put into place. But I think this committee should understand fully that foreign terrorism is a national security threat. It is not only a law enforcement matter. And therefore, it needs the oversight and the interest of this committee as the other major national security threats that the nation faces.

Thank you very much, Mr. Chairman, for your attention. I look forward to trying to respond as best I can to the questions you and others may have. Thank you, sir.

REP. SPENCE: Mr. Ambassador.

 

STATEMENT OF

R. JAMES WOOLSEY
Former Director,
Central Intelligence Agency

 

MR. JAMES WOOLSEY: Thank you Mr. Chairman. Mr. Chairman, if it's all right rather than reading my statement I'll speak to it in somewhat summary form.

It is a great honor to be invited to testify before you again this year. I'm going to limit these remarks to what I would regard as assailant threats to American security, serious damage to the country such as would be caused by an attack on us or a major war. There are a number of other interesting and important threats in a sense, which we can discuss in questions as the committee is interested.

One important preliminary matter, during the Cold War we became very accustom to talking about threats and even validated threats. And, this was possible because the Soviet Union was, at least in its weapons development and the planning of its military operations, a relatively predictable place. With respect to development, doctrine, military plans, we could focus our intelligence on key notes, test ranges, on recruiting a Polish officer as a spy on the Warsaw Pact staff to steal their war plans and so on.

And we got to be use to the idea that we should really only respond to reasonably clear extrapolations of what we in fact saw. That was not an irrational approach during the Cold War because of the nature of our enemy and because we had to economize and spend money on what was truly important. But, this approach, in my judgement, needs to be substantially modified in the post Cold War era.

People such as Saddam Hussein and Kim Jong II, are far more unpredictable and irrational than the Soviet leaders ever were. It is dangerous, I believe, to assume that military developments and deployments in regime such as these are going to follow some relatively predictable pattern.

I said on a number of occasion and my staff when I was DCI, use to whence when they heard it because they heard it so often, that we were in a situation similar to that with having to struggle with a dragon for 45 years and killed him and now finding ourselves in a jungle full of a lot of poisonous snakes, that in many ways the snakes where much harder to keep track of than the dragon ever was.

And, I think, that is the essence of the problem. Justice Holmes use to say in order to understand the law you have to look at it as a bad man would. And in order to understand the post Cold War era, we must all try and it is a very difficult task indeed, to look at the world through the eyes of a Saddam Hussein or a Kim Jong II.

Starting with Russia and China, these are the only two countries that can destroy the United States today, within the 30 minute flight time of an ICBM. I believe that fundamentally, with Russia and China today, United States need have no fundamental serious strategic differences with Russia at all. And with China, the one underlying one where we are likely to have a serious strategic difference, is the future of Taiwan, or at least China's potential attempt to resolve the Taiwan issue by force.

But nonetheless, neither of these two countries is in a stable situation yet. Both are inconsiderable political and economic flux and neither has establish the rule of law. And, it is therefore quite important for us to look at the problems that might arise in the future with them and the problem that do exist today.

One of the most serious aspects of the current situation in Russia is that the degree of corruption and the physical problems of the Russian State have created a very poor state of moral, pay and behavior inside the Russian military forces. The conventional forces most of them are in worse shape, but even the strategic rocket forces are not immuned to these problems. And, there are some uncertainties that the general staff and the strategic rocket forces face with respect to nuclear weapons.

First of all because their conventional forces are in such poor shape, the Russian's are moving toward a doctrine of potential first use of nuclear weapons and a much higher reliance on nuclear weapons than they had before. Tongue-in-cheek, I might say, they are adopting the views of the earlier Kissinger circa late 1950's earlier 1960's with respect to reliance on nuclear weapons. They have lost some important warning systems that are outside of Russia that were in the Soviet Union but are not in Russia. And it is quite troubling to contemplate what might happen in some crisis if there were a misunderstanding such as there might have been impart with respect to the famous recent innocent of the Norwegian sounding rocket.

We ourselves in the United States have had command post exercises and the strategic air command once or twice over the years, temporarily mistaken for the real thing. And in one famous incident, many years ago, when Kruschev was actually inside the United States, a brand new radar in the ballistic missile early morning system tracked the arisen of the moon as a flight of incoming Soviet ICBM. The Canadian general who was on duty at NORAD looked at his television screen saw that Kruschev was in cornfields or in Disneyland or where ever and said this just can't be true.

But, the point is that in times of tension, it is plausible that something most unexpected could happen. And I believe the lessons for us from that circumstance, with respect to Russian nuclear forces, is the importance of discussions with the Russians to try to find ways to ameliorate this situation. But also, at least in my judgement, a vigorous approach against ballistic missile defense for the United States. At least to the level that could deal with unauthorized and accidental launches.

A second problem with Russia is that many of those who managed the Soviet Unions security establishment, whether in technology and intelligence or in military expertise, are now for hire on both the white and the black markets. This makes Russia serious source of proliferation for example, to Iran as the chairman mentioned, a recent series in Izvestia spoke in some detail about a senior Russian military officers having provided assistance to Aum Shinrikyo prior to Aum's chemical attack in the Tokyo subway. And one of the most difficult acts of all this is the inter-penetration of the security services, organized crime and some aspects of Russian business.

If any of you are in Geneva let's say, or Vienna sometime in the next few years and you should run into a very well dressed prosperous looking Russian, let's say a $ 2 thousand suit and Gucci's and he says to you that he wants to talk to someone in the states about a joint venture for the export of oil or some other purpose, he may be what he says he is, a businessman. He may be a Russian's intelligence officer under commercial cover, he may be a senior member of some organized crime group, but what's really interesting is that there is at least some chance that he is all three. And indeed that none of those three institutions has any particular problem with that.

China present a case of a dictatorship that has successfully begun a major economic modernization. But the disruption that will likely occur as the inefficient state owned enterprises are shifted in their organization and employment structure, and the regional tensions that this sets up in China along with other economic difficulties between the prosperous south the, an coast, and the less than prosperous north and interior, could lead Chinese leader to take refuge even more than they have in the past in nationalism. And, the focus of nationalism for them is likely to be to regain Taiwan.

This is the one issue, in which I think might cause a major rupture between the United States and a nuclear power, which today could threaten the United States. After we demonstrated, I believe, weakness and vacillation for several years, in my judgement the Chinese were genuinely surprised. Two years ago when they launched ballistic missiles into the water near Taiwan and the United States in fact responded by sending two aircraft carriers.

But, I think the lesson of that period is that it is dangerous to give China reason to doubt our resolve on this issue of the importance of a peaceful resolution of any differences in the Taiwan straits.

A Chinese invasion of Taiwan is not really in the cards for many years. They lack a lift and the relevant types of military capability. But the seizure of one or more of the offshore islands, ballistic missile attacks using conventional warheads with excellent guidance such as GPS against targets in Taiwan, these are some of the types of things that could create a crisis and a confrontation with China.

I want to speak briefly to three rogue governments, North Korea, Iraq and Iran. Except during our periodic crisis in the mid-east, the Korean demilitarized zone remains the most likely place in the world for the United States to get involved in a land war. There's several situations that create a serious risk that the north might expect some types of early successes and lead Kim Jong II even with the decrepit state of his nation to try some wild throw of the dice.

The concentration of North Korea enforces close to the DMZ. The concentration of South Korea's population and industry on the southern side of the DMZ, some imbalances in military capability, particularly South Korea's sparse investment in artillery and some North Korean capabilities, such as their special operations forces, their possession of ballistic missiles equipped with chemical and/or bacteriological weapons -- the operational -- initiation of operational status for the Nodong, which could conceivably threaten our basis in Japan.

REP. SPENCE: Mr. Ambassador we're going to have to pause right here and take a break --

MR. WOOLSEY: Sure.

REP. SPENCE: -- and go vote and we'll be right back.

MR. WOOLSEY: Fine.

(Recess.)

REP. SPENCE: The Committee will please be in order. Mr. Ambassador, we apologize for the break for the vote, but that's the nature of the beast we deal with. You may proceed as you like.

MR. WOOLSEY: If I might continue, Mr. Chairman.

REP. SPENCE: Yes, sir, proceed as you like.

MR. WOOLSEY: We've seen our military force structure erode since the Gulf War, Mr. Chairman, and although there have been some important improvements in capabilities, such as smart weapons, nonetheless, I think, particularly from this committee's point of view, it's important that our capacity to fight two major regional wars simultaneously must be said to be in doubt. If we're engaged in the Mideast at some point in hostilities, doubtless Kim Jong II will notice, and if we're engaged in Korea, doubtless Saddam will notice.

If the (Typol Dong II ?) missile has been developed and deployed by the time of any crisis or war on the Korean peninsula, the situation could be grave indeed, because it would probably be able to reach at least some cities in Alaska, carrying possibly a bacteriological warhead. It's not unimaginable that the North Koreans would be able to produce one or two nuclear warheads from the fissionable material they were probably able to acquire from the earlier operation of their reactor. But in many cases, bacteriological will do just as well as nuclear for a weapon of blackmail.

So, although in any war of duration, the decrepit nation of North Korea would not be able to prevail against the combined forces of the US and South Korea, the threat of a quick grab of the northern part of South Korea is a serious one, I believe, as long as this North Korean state and military hold together. And if there were a simultaneous crisis in the Mideast, or if the (Typol Dong II ?) were developed and deployed, the situation could be extremely grave.

I would add, North Korea, of course, remains a very dangerous and serious proliferator, as well as creating these other direct threat problems.

The conclusion I draw from this is that theatre and national ballistic missile defense for the United States, and several important improvements for South Korea's defenses, especially artillery, are quite important. Second, Iraq. Certainly Saddam has proven his willingness to take risks, he's proven his ruthlessness, and his lack of feeling for his own people, and his stubbornness. But two fundamental problems are that Iraq sits on or near a huge share of the world's oil.

In the late summer of 1990 Saddam was about a hundred miles away from controlling over half of the world's proven reserves. And Second, Saddam doubtless holds at least some stocks of chemical and bacteriological weapons, and the means to deliver them against our friends and allies, and against US forces in the region, and the capacity to rebuild that capability even if it is taken from him.

The problem is seriously complicated in my judgement by the fact that there are no easy fixes to this situation, by a short bombing campaign, or by any other means. Even in the unlikely event that Saddam agrees to full and complete UN inspections, and even if his supplies of chemical and bacteriological weapons, his capacity to produce them, and his ballistic missiles were destroyed by inspectors, or by air attacks.

If the inspections ceased, and they would have to be very, very vigorous inspections indeed, he would soon be capable of reeking some degree of devastation again. For example, Scuds are available in many places in the world, especially to a country who has billions of dollars of oil revenue annually. And it's only a little harder to make anthrax than it is to run a small microbrewery. A parallel that is drawn by the deputy director of the Advanced Research Projects agency in the Pentagon in an excellent paper -- unclassified paper on bacteriological warfare, which I would urge that this committee seek and review.

Anthrax is relatively easy to make, and the manufacturing equipment and the stocks for bacteriological and chemical weapons can be dispersed, can be hidden from inspectors, can be hidden from intelligence collections, perhaps in deep bunkers that even advanced, and accurate conventional weapons can't destroy.

I believe the problem with Saddam has been made worse by our flaccid responses in 1994 to the Iraqi intelligence services attempt to assassinate former President Bush, and in 1996 to Saddam's murderous assault against the north. He is doubtless concluded that almost no matter what he does, he will only have to endure air strikes for a limited period of time, and that he can use those to rally support, especially in the Arab world.

Thus, in my judgement it will do little good only to try to use air strikes to delay and disrupt the Iraqi capability to manufacture, and use weapons of mass destruction for a limited time. Air attacks may show some success to that end, but Saddam will doubtless force innocent civilians to be placed at likely attack points, or even kill them himself in claims that US air strikes were responsible.

In a few months there would be a new crisis. The fundamental problem is the Ba'athist regime which Saddam heads, and it seems to me that's the problem we must confront. As the short hand we often speak of Saddam as the problem, and this focus on the individual can even lead to such proposals, as I believe, the extremely irresponsible one made by former Senior Clinton Administration advisor George Stephanopoulos in December that the United States provide, quote, "direct support", for a, quote, "inside job to assassinate Saddam". In addition to being illegal, under the current governing Executive Order, impractical, and destructive of much of what we try to stand for in the world, such an effort even if successful would be quite likely to give us another Ba'ath Nationalist of Saddam's strike.

Instead, I believe we need a solid program to break the power of Saddam's regime. Some elements of that program could include air strikes. But we should try to maintain our forces in the region for a sustained period of time in a condition to attack so that we can achieve some surprise at some point. An attack now against what are doubtless dispersed weapon stockpiles, would be less likely to be effective.

Republican Guard is also now probably dispersed to help make air attack against it less effective, and we would want to make sure that we attack in such a way as to cause maximum damage to the Republican Guard, since it is much of the source for the regime's power.

Yet, as I understand the current position of the administration, it suggests that only attacks against weapon stockpiles are now being contemplated. The commanding general has more broadly spoken about attacks against the instruments of power of Saddam's regime, which I believe is a much better formulation.

But given the administration's statement, in my view, limited strikes especially if executed at a time that Saddam expects them, would succeed in doing very little that is useful. If air strikes occur within the next few weeks, this may be the most telegraphed punch in military history.

There are other important components to break the power of the Iraqi regime, and I believe they should be undertaken promptly. That could include destroying the Iraqi Air Defense System by air strikes, and then establishing and maintaining a no fly zone over the entire country, a step which would make it much harder for the regime to move Republican Guard Forces quickly by helicopter to counter rebellions by dissident regular forces in the future, such as have happened in the past. And by also include recognizing a government in exile, providing vigorous air protection for the Kurds in the north which we did not do two years ago, and the Shi'a in the south which we did not do in 1991 against the regime.

Now, it will be said by some that many members of our once effective Gulf War coalition wouldn't support such steps. But it seems to me that the United States has more success in building coalitions when it takes firm clear sustainable positions, than when it plays for short term publicity, or sending signals with military forces.

It's aggravating in the extreme that the Saudi's will apparently not permit us to conduct air strikes from Saudi territory. But we must understand that the Saudi's or anyone else in the region cannot reasonably be expected to support pinprick air attacks, such as in 1994, and 1996, or even longer bombing campaigns that merely retards Saddam's programs for weapons of mass destruction. They must then continue to live next door to the angered viper, while we're free to withdraw thousands of miles away.

The decisive and coherent long term program to bring down the Ba'athist regime in Iraq of which air strikes from time to time may well be a very important part. It seems to me to be the only course of action at this point that has any chance of success.

Briefly on Iran, Mr. Chairman, unlike the case with the Iraqi regime, I believe that the threats that are potentially posed by Iran may plausibly be ameliorated by (a peaceful means?). Now, this is far from certain, but it's much more likely now that the reigning clergy centered around Ayatollah Khomeini has seen the dramatic rejection of their candidate for president, and the overwhelming vote of the Iranian people for President Khatami in the last election.

Now President Khatami has very little formal power, especially over the military and the instruments of state power, such as the Iranian Intelligent Service used to provide substantial aid to Hezbollah, and other terrorist groups. But nevertheless, in spite of the rule of those in the clergy, who support terror at home and abroad, there are important forces in Iran who want better relations with the west, even with the United States. And there is something there to work with.

I believe it's a major error to blame Islam or Shi'a Islam for the state of affairs in Iran today.

The limited number of clergy, I believe a minority of the Shi'a clergy have designated themselves as rulers under the doctrine of the Walliat Al-Faqi (ph) of Ayatollah Khomeini, but I believe there is ample evidence that they do not represent the majority opinion even as a Shi'a clergy in Iran. Nonetheless, Iran is a terrorist state, it is a state that rules by force, it is a state that conducts terrorist operations abroad, and that is seeking to acquire ballistic missiles, and weapons of mass destruction, recently with rather substantial Russian help.

In my judgement, one of the most important lessons of what is happening in Iran, with respect to its weapons programs, is that it will before long be a threat to our friends, and allies in the region, and that whatever we decide to do about the ABM Treaty, we should not even be discussing limitations on theatre systems with the Russians.

Terrorism finally. The risk that terrorist might use weapons of mass destruction in my view, constitutes the number one threat to our national security. Much attention has been focused on fissionable material, and small stolen nuclear weapons, both in government planning and in the media, and these are important in the Nunn-Lugar and other steps that the Congress has adopted to approach and deal with this problem are of substantial contribution to national security.

But the most troubling threat, I believe, is biological weapons. They may be quite small, they maybe much more easily constructed, even than a crude nuclear weapon, and the raw material for some of the fearsome ones, such as anthrax, is readily available. Indeed, it grows in a number of cow pastures in the world, unlike fissionable material, which requires a great deal of effort to produce.

Biological or chemical weapon terrorism could be undertaken by purely domestic sources, such as another Timothy McVeigh, or a group with similar views. It could be undertaken by a group inside the US that's inspired by individuals from abroad, such as the blind sheik conspiracy in New York, it could be undertaken pursuant to covert encouragement by a foreign government through an intermediary organization, such as Iran working through Hezbollah, it could be undertaken directly by a foreign intelligence service, possibly as a false flag operation, in which Iranians masquerade as Iraqis, or Iraqis masquerade as Iranians. And it could even be undertaken by special military forces of a foreign country, for example with a diesel submarine covertly launching a land attack Cruiz missile with a biological warhead, or a freighter launching a Scud. Each of these types of terrorism, whether using biological weapons, or some other requires different responses. For example, for purely domestic, and many foreign inspired domestic threats, the FBI's ability to penetrate such groups with informants is the main line of defense. For terrorist operations that are planned, or launched from abroad, espionage managed by the CIA, are acquired by intelligence sharing between the CIA and Friendly Intelligence Services, is really the only likely source of advance warning.

In the case of biological weapons, once an attack's been launched, the availability of sensors to detect it promptly, and medication that can be administered quickly to large numbers of people, could mean the difference some day between say hundreds of casualties in such an event, and hundreds of thousands of casualties in such an event.

Today, unfortunately there are a number of terrorist groups, both foreign and domestic to for ideological or religious reasons are not seeking a place at the table, but they are seeking to blow up the table, and to kill everyone sitting there. It's important for us to realize that the nature of some of these groups, Aum Shinrikyo is only one example, in the widespread information about terrorist techniques on the internet, and otherwise creates a radically new terrorist situation compared even to the recent past. And there's no silver bullet that will stop terrorism, but there is a major need for a thorough and coordinated US Government response.

Final thought, Mr. Chairman, about oil. Although I disagree rarely, and with trepidation with my old and good friend Jim Schlesinger, as his remarks at least were mentioned earlier. I would want to say this.

Although there are several circumstances that might pose serious threats to the US, and I've mentioned some: confusion in the command and control system of Russia, a confrontation with China over Taiwan, a war on the Korean Peninsula, a domestic terrorist threat, a number of the near and long term threats to the United States seem to be centered in the Mid-East. And the importance of the Mid-East is driven by two facts.

First, if you add the Caspian Basin to the Persian Gulf, it sits on approximately three-quarters of the world's known oil reserves. And second, the states that control almost all of this oil are either governed today by psychopathic predators, or by vulnerable autocrats. Moreover, for historical reasons going back to the period after World War I and earlier, there's a great deal of resentment against the west including now particularly against us and Israel, and the whole region is a potpourri of religious extremism, economic stagnation, and large populations of unemployed youth. Some wealthy individual, such as Asima Ben Laten (ph) our free-lance sponsors of terrorism, and work on weapons of mass destruction with millions, and millions of dollars at their disposal.

Finally, Asia is quite likely, even with its current economic difficulties as it grows and urbanizes to increase substantially the world's demand for oil in the next century. A projection two years ago in Fortune Magazine, calculated that once China and India reach what is today South Korea's level of energy consumption per capita, which would be several decades because South Korea is still a very prosperous country, nonetheless, at that point those two countries alone would require almost 120 million barrels of oil daily, given their current consumption patterns.

The whole world today uses just over 70 million barrels a day. These huge types of jumps in oil consumption probably are not going to occur because something will intervene by way of alternatives and the like. But the point is the pressure will be there, and we will at least see an increase, and probably a substantial increase in the 10's to hundreds of billions of dollars that now flow to the Mideast, to hundreds of billions to trillions through the first half of the next century. And these funds because of the nature of that region are going to support governmental and private activity that in many cases are not in the United States interest, to put it mildly.

So, not as a matter of promoting autocracy in the United States, Mr. Chairman, at all, but as a matter of world stability, I can think of no single more important long-term strategic issue than finding some way to reduce the worlds' dependence on Mideast oil.

Thank you.

REP. SPENCE : Thank you both, gentlemen.

Both of you have mentioned various possibilities of threats in the future, emanating from different sources, and today especially, we're talking about maybe air strikes against Iraq, and whether that would do the job or not. And the real possibility of North Korea deciding to act, if we do get involved in Iraq or more to the point, probably Iran. Our current strategy is being labeled by two nearly simultaneous major regional continues at one time.

You think that's a good strategy to have, and could we do that right now on that strategy? Is our force big enough to do that?

MR. WOOSLEY: (Inaudible) -- in the neighborhood. In Turkey, Syria, Saudi Arabia, and more broadly in the Arab world. Who does all of that calculation? What about the character of the air strikes?

The air strikes when combined to an ever more tightening 'no-fly zone policy', does indeed constrain this military. This military is indeed harmed by these air strikes. If the target packages, which I have no knowledge of, today, include both attack on military targets and attack on suspected or known sites where biological or chemical activity is going on. And you couple that with a expanded no air strike policy, you are certainly creating more pressure, which has already been increased. I'm reducing his military capability. It is not the case, that his military capability is, especially air capability, is the same today as it was in '94 or in '91, or certainly before the Gulf War.

So, these attacks do have an effect. But you are also correct in saying they are not going to bring instant popularity for the United States in the long. The average Middle Eastern Arab person, they will bring respect. They will bring more respect than if we do nothing. Because if we do nothing, it's an even clearer signal to the very difficult and complex communities that no one is standing up when Saddam Hussein says I'm sorry, I'm keeping my weapons of biological warfare or my chemical weapons, or my SCUD missiles that can only create the worst kind of destruction in the neighborhood.

So, on balance, as difficult as this is, I think it is and there are no easy solutions here, it does say, yes he has calculated the cost of the benefits. There are some costs to an air campaign, but I think from the point of view of the Iraqi people. From the point of view of peace and stability from the point of view of the United States interest consideration of these air operations is more important than not. I hope that helped us to some degree, sir.

REP. SPENCE: I would just say very briefly, one of the key things about Saddam to realize is that before he was a dictator, he was a hit man. That's what he did for a living was kill people. And he has no interest in the Iraqi people. He wants to maintain himself in power and to increase his power as much as he can. If you think of dealing with a particularly ruthless Mafia don, and I don't mean some as benevolent as Brando played in the first Godfather. I mean a really ruthless Mafia don. Then I think that's essentially proper image.

I think the attacks; air attacks will have negative effect on our standing in the Arab world. Because of the sort of brotherly fellow feeling for Saddam in spite of his being the bad boy of the Arab family. And I think that is why it is important if we are going to use air strikes or military forces as a whole, to use it decisively.

Combined with the political program to delegitimize his regime combined with a long-term program of establishing a no fly zone over the whole country. Combined with attacks on the Republican Guard, then maybe there will be some utility in going after the sites of weapons of mass destruction. I think going after those sites alone, for a few days, or even a week or two, is not an effective program.

REP. SPENCE: Mr. Sisisky.

REP. NORMAN SISISKY (D-VA): Thank you Mr. Chairman, and welcome to both of you gentlemen. We've known each other for a good number of years and you've testified probably more than anybody in front of this committee. And we welcome you very warmly today.

We use the word, Jim, blunt.

MR. WOOLSEY: Blunt?

REP. SISISKY: Blunt, you know in talking to the Russians.

MR. WOOLSEY: Yeah.

REP. SISISKY: This is not my question, but I was just gonna make a comment about it. Cause I think it's important. I intended this past weekend, formally called the "Ricounnday Conference" call it now European security. For the last 34 years, before we went into Munich, into the sessions, we went to Bosnia. And we decided that we were gonna be very blunt. The first speaker was Mr. Cole, from Germany. He spoke for about an hour, and then we asked questions for about an hour and a half, and then he comes back. And the first question out of the box, was Senator John McKeon (sp), and if you know him you can't be more blunt than he is and I mean he was blunt.

Here we are in Bosnia, which is closer to Europe than it is to the United States, obviously. And here we are in Iraq, and we can't get any cooperation from our friends. Mr. Cole came right back and said you will get cooperation from Germany. Point I'm making is sometimes you have to be blunt. And you 're particularly right. John, you made the statement, of course obviously you're out of the ring now, that being able to fight two major regional wars.

I submit to you, even today, from the Pacific we talked about Korea. We don't have an aircraft carrier there. You know that? The aircraft carrier that's in Japan is now in the Persian Gulf. And that aircraft carrier that's in the Persian Gulf was supposed to be in a junkyard next month, to be cut up. Now I don't think I'd like to be the CINC sitting in South Korea, with the air bases there and not have any support from the outside. Even though they could do it in Japan.

The reason I bring it up, since the question was asked, can we fight two major conflicts? You gentlemen talked to a lot of military people, who will level with you. You're out of the administration now, and all the time people don't level with us in particularly in public. Judge Webster last year stated that in his talks with senior military people that they think we have enough now. In your conversations, do they say the same thing? Or do they have other concerns that you might wanna -- I'm not talking about mentioning names.

MR. DEUTCH: Well, I must say, Mr. Sisisky, I do talk to senior military leaders all the time. Those active duty and recently retired individuals who I was fortunate enough to work with during my three years with the Department of Defense. And I would say they are concerned about the up-tempo in our deployments around the world. Though, that's especially true for certain elements of the air force. It's certainly true for elements of the Marine Corps, and of the Navy.

But in general, compare to three years ago, I think any candid assessment of the threat, change to the threat, and any candid assessment of our improvement and readiness makes us better able to handle this most stressing two week of conflict scenario. So, I would guess that I actually get better reactions from the military than when we, when I first went to the Department of Defense. Not in 1961, but in 1993.

Is a short run, the concerns that I have are a little bit farther out and have to do with procurement account? And I believe that General Tonally (ph), who is our CINC in Korea, one of our most outstanding individuals that I had the pleasure of working with. Would have a similar judgement.

We could not enter into two regionally conflicts and maintain the deployments that we have for example in Bosnia. Obviously, that would have to, even for one regional conflict we'd have to pull back from all of those lesser conflict situations where we are peace-keeping operations where we're at, if we were to reach a conflict.

And finally, let me say, it is not a bright line. We do not have to, if you are stressed in the limiting case of the most difficult case we were actually involved in a two front war. You don't have to have equal campaign plans, yet to stop the enemy. But you're gonna have to have equal campaign plans for moving to victory. That does not have to happen on the same time scale as we saw the Second World War, when we were fighting both in the Pacific and in Europe.

So, the short run, I think military opinion, high-ranking military opinion, is relatively comfortable. And more comfortable than they were three years ago, because of the lower nature of the threat quite frankly.

MR. WOOSLEY: I can say briefly, although people are proud of their forces, and the residual forces that are left from earlier buildups in moral and the like. I hear a number of people saying the equivalent of we're eating our seed corn. The acquisition budget -- (inaudible) -- procurement is thin looking at our end of the future. And the way the calculations are done sometimes you're somewhat optimistic and so in reality it may be even thinner than the worried people are now saying. So, I think that one of the great heroes of World War II is the gentlemen whose portrait is right above Mr. Bateman, because he led this committee to support the two-ocean navy during the depression.

I think it was right after the battle of Midway, with repairs and sinkings we had one carrier left in the pacific operational enterprise. So, it got very thin. Now because of what he and Franklin Roosevelt did, they started coming off the waves awfully quickly and the war in the Pacific went the way it did. But, I think in this era, which in some ways today, has some similarities not to the 30's, but to 1920's in which we are the dominant nation in the world. We've just won a world war, a cold one instead of World War I, the stock market is booming. All of that people tend to get rather relaxed and full of themselves and self satisfied.

In circumstances like that it's very important for Carl Venison's to start whoever they are today, to start waking people up I think.

And I hope 50 years from now, that they'll be talking about you Mr. Spence, and Mr. Chairman, of being the hero of getting enough ships on the seas.

REP. SPENCE: Well, we try to give help. Mr. Sykes.

REP. SYKES: Thank you Mr. Chairman. Gentlemen, thank you for being with us today. You have both mentioned the difficulty in dealing with Saddam, in particularly in regard to weapons of mass destruction and I guess my question goes to both to your suggestions, this is more than a difficulty.

And one of the things that you haven't mentioned yet is the cooperation that Saddam has received from some of the region. Particularly from Sudan and from Libya. We've done some research and it appears that particularly in Sudan, the strategic cooperation, which exists between leaders in Sudan and Saddam, is quite extensive and it dates back to the beginning of the 90's. As a result of the activities that we all know about in '90 and '91.

In March for example of 1991, Tariq Aziz is apparently requested permission from Saddam's president to move Iraqi chemical weapons to Sudan in order to circumvent inspections by the United Nations. Iraq also transferred in the summer of '91, some nuclear material to Sudan.

With UN inspections continuing, Baghdad committed itself to bolstering the regime in Sudan, which had by, the fall of 1993, we believe, become a very strategic and important storage site for chemical and biological weapons. And by 1995, secret contacts between Iraq and Iran culminated in the visit to the Sudan by the social affairs minister and I can't pronounce his name and I won't try. In order to implement an agreement, the agreement that resulted from those contacts.

The embassy, the Iraqi embassy was increased significantly. That is, the personnel there was increased significantly and meanwhile teams of Iraqi intelligence, and military commando officers arrive in Sudan in the summer of '95 to assist the Sudanese armed forces while the Iraqi's continued to ship more munitions of undesirable nature to that country. And the Iraqi expeditionary units apparently had a very simple task, and that was to supervise and maintain the Iraqi strategic weapons and military equipment stored in Sudan and to keep it away from UN inspection teams.

And I can go on, it goes on up through '96 and '97 in a continuing pattern and I can also build the same kind of a case with regard to Libya. Now the question I guess I have is two-fold: A-do you agree with conclusions that I draw, that I'm able to draw from this information, that this is a major departure from what we generally have talked about here and believe to be true. And secondly, doesn't this make it highly unlikely that we'll have even short-term success from air strikes.

MR. WOOSLEY: Congressman, I'll just say a quick word about this because most of this is new to me. At the time I left being director in January of '95, our main understanding of Sudan's foreign ties and support as I recall, were with Iran. And there was considerable assistance to Sudanese facilities for supporting and training of terrorists and the like.

But what you say is not at all surprising and it would be logical, that Saddam would seek places outside Iraq to hide either various weapons of mass destruction or the where with all to produce them. So, although this is new to me, it has certainly the ring of plausibility. But I can't help you with whether or not it is in fact a case. Perhaps, Mr. Deutch, has been in D.C. more recently than I, perhaps he can.

MR. DEUTCH: Mr. Saxton I cannot add anything to Jim's answer on this. I would say that this is the kind of question which ex-DCI's are much less qualified to answer than current DCI's, and I would urge to ask George Tenant about it and I'm sure you'll get a full and accurate answer.

REP. SPENCE: Mr. Pickett.

REP. OWEN B. PICKETT (D-VA): Thank you, Mr. Chairman. I welcome my witnesses this morning.

Gentlemen, lots of times we hear that maybe two or more components to national security, we talk about threats to national security, perhaps, as military security and also, economic security. And you've already mentioned the dependency of the US upon Mideast oil, and I assumed that is intended to be an economic threat to our nation's security and how that's rated strong or weak is a matter of judgement.

But my question is, are there other economic threats to our security that you see? And secondly, is our nation doing enough to deal with its dependency upon the Mideast oil, and to try to defend against that threat, so it's two parts.

MR. WOOLSEY: Let me just say a quick word about that. Today, most of our imports and over half of our oil is now imported. It's not directly to come from the Mideast, but usually from the Western Hemisphere. But the United States has only two percent of the world's proven reserves, and the Mideast has close to three quarters, so it is the world's dependence over the long run on the Mideast rather than American dependence today for shipments that seems to me to be at issue.

I must say, I think because of the volatility of the region, because of the huge share of overseas payments which we must devote to imported oil, and for a range of other reasons, dependence on this very volatile part of the world, for the world as a whole, is a serious problem. About half of the US trade deficit is oil imports, and if Asia is banking problems and crisis either continue or worsen, the depreciation of a number of currencies in Asia is going to mean in the economic chaos they find themselves in, is going to mean that they're going to try to export themselves out of their economic difficulties. And when they look to do that, they look to the world's largest and most open market, namely, us.

So, one of the things that is going to happen here over the course of the next few years, I think, is there will be more and more products coming from Asia seeking to be purchased by American citizens. And that, in turn, means that we export more and more dollars, and essentially ask the world to hold them. Now, right now, the dollar looks rather sound to put it mildly, but there is a rival reserve currency, potentially coming about next year, the EMU, and certainly, the Europeans have the hope that it will become a rival to the dollar as a reserve currency in the world.

And every two or three years, a Japanese prime minister, or someone senior in the Japanese government, gets a bit nervous about the amount of dollars they are holding, and makes a speech, and the stock market goes down a bit. If you put all these things together, I would suggest that over the next number of years, it would be a far sounder policy for the United States, in view of the need to absorb added imports from Asia; in view of the position of the dollar today as the world's only reserve currency, but one that we ask more and more people to hold more and more of in order, essentially to loan us money. In view of al of those circumstances, it would be quite prudent for us to see what we could do to begin to replace imported oil with domestically produced transportation fuels of some sort.

So, I see that whole concentration of circumstances as a serious economic issue for us over the long run, and imported oil is an important part of it, but it isn't the only part.

MR. DEUTCH: But, Mr. Pickett, let me say that twenty years ago, another former director of Central Intelligence, Jim Schlesinger, was Secretary of Energy, and at that time, I was his under secretary, and we were very conscious twenty years ago, of the long-term, national security threat to this country from this compelling dependence and growing dependence on Middle Eastern oil, which Jim speaks so correctly and so eloquently about. I believe that in the short run, we're being lulled by the availability of oil around the world, and it's relatively low price.

And that in the long run, not only the United States, but more importantly, the world community and our closest allies are running a tremendous danger for the reasons that Jim said because of our dependence on oil, most of which finds it way back to the Middle East or in other very, very delicate areas like the Caspian Sea, which is an important, potential source of oil.

So, getting away from oil is a long-term, economic, strategic, national security matter, and I don't know how to draw a line here between the economic and national security interest. And people who say that natural gas can take all this up, I think, are very optimistic indeed. But to answer your question in a different direction, I do think that it is a very important question for this committee to dwell on and to think about the other long-term pressures, which are partially economic in character, whether it has to do with world food, or it has to do with the availability of water, whether it has to do with the issue of drugs, which mix economic and criminal activity together to understand the kinds of threats this country will face.

And I would point to the ethic rivalries which are going on around the world, to agriculture and feed, to water and drugs as the other important, sort of, subjects which will have a tremendous impact on the welfare of this country, whether you care to term that economic or national security is a fuzzy area, but they are important.

Thank you, very much, thank you, Mr. Chairman.

REP. SPENCE: Thank you, Mr. Pickett. Ms. Fowler.

REP. TILLIE FOWLER (R-FL): Thank you, Mr. Chairman, and welcome to both of you here today.

It has been a very interesting meeting, and I do have a couple of concerns that haven't been covered yet; several of mine have, but I would like to have you address a few areas. One is Egypt. You know at the beginning of this decade, the government of Egypt was really having acute problems with Islamic military movements, militant movements, and terrorism, and they got control for a while, but now there's been a renewal of some of these terrorist incidents, and I remain very concerned about the situation in Egypt, which has become one of our most important friends, really, in the region.

And could either of you comment on the situation there today? What you see for the future? And also, in looking at the long-term, what you think the possibility of reaction is going to be should we begin engaging in military action in Iraq?

My other concern is based, really, on internal things with the CIA, Dr. Deutch, back when you were director, you had inaugurated some new policies that were aimed at limiting the use of foreign nationals that had unsavory backgrounds as sources for intelligence, and these, I know, were driven by concerns we all share as to paying people who were involved in human right abuses or in other activities. But some have noted that people who go to garden parties aren't sometimes, the best resources for terrorist activities.

And since this has now been in place, could you comment on what you see, on how these policies, are they serving our interests, are we still getting the kind of access we need to a timely and useful intelligence, or do we need to change this, somewhat. And I would appreciate both of you commenting on that, too.

MR. DEUTCH: Ms. Fowler, let me take each of those in order. The first is, I think, you're bringing up Egypt as an extremely astute and important subject. I am, personally, quite concerned about Egypt, despite the fact that President Mubarak remains very firmly in control now, even in consideration of the increased terrorist activity. The social and economic conditions in Egypt are not good, and they are not improving. So that country, every year, seems to me, is somewhat under greater stress internally.

And that, it seems to me bodes very poorly for security of the region. So the situation in Egypt, given the level of economic stress on the population, and the social stresses there, is one which certainly deserves attention, and I am not sanguine about it at all. President Mubarak does take a leadership role in the Arabic world. The population of Egypt, I think, if you look at the, sort of, public commentary in newspapers, and the like, is very much pro-Arab, and is growing since the time of Saddat; growing against the peace process, and growing against the good relations with Israel. And, indeed, there is a tremendous amount of popular sympathy in the newspapers for Saddam Hussein in Egypt. I think he's at one of the places where Saddam would, so to speak, pick up popularity among the population if there were air strikes.

But Egypt is a country to be concerned about. And let me just take a moment, although, it's somewhat old for me to make some remarks about the CIA. I think the way that you posed what was our effort at the time, certainly, my effort at the time, is not exactly accurate. Obviously, if you are dealing with human intelligence and obtaining information from agents, you are not dealing with Thomas Jefferson type people, or even people from Massachusetts, I might say.

So, it's no question about the fact that that was -- that you have to deal with that. My concern was to putting into clear rules about making a judgement about when some arrangement was underway in order to protect the young case officer in the field from having questions raised about their decision to make an arrangement with a source.

Unfortunately, like so many things that I've tried to do in government service that didn't work quite as it would in a perfect ballet, and certainly, outside of the agency, and, perhaps, even in the agency, that effort to ask for more scrupulous reporting about the way arrangements were made with prospective agents, was looked at as a way to trying to stifle dealing with bad people, rather than, what our intent was, certain my intent and the intent of my staff, including my deputy, which was to insure that the case officer was protected.

When that judgement was made by fact that it was reported and looked at, and there are, of course, certain legal rules that you cannot make an arrangement with somebody who's known to have committed a crime against an American without the director taking some action on it.

So, I believe we should have made a tremendous effort to communicate this, and I am absolutely sure that the current, great director of Central Intelligence, George Tenet, is making progress on this to repair any imperfections that may have occurred while I was director, but it's a very good question -- very important.

Our human intelligence collection is more important today than it has been in the past. I know Jim Woolsey, and other prior directors, worked very hard to strengthen the human intelligence capability, and I'm quite confident the current director, George Tenet is going to do an excellent and is doing an excellent job on keeping our capability for collecting human intelligence more important today, than ever before in the best possible shape for the country.

REP. FOWLER: Thank you.

MR. WOOLSEY: Congresswoman, let me say, first about Egypt, the renewal of terror I think was a most unhappy but not a surprise to most people who have followed Egypt over the years. The terrorist organizations throughout the Mid East in many ways had their Genesis in Egyptian groups of the 1940's, and slightly later, and it is a continual running sore in Egypt. It is made worse, and indeed is fed, by corruption and economic stagnation. Egypt has some positive aspects to its economy but it is generally not a prosperous place, and it has not seen the growth of the middle class and so forth that one would want.

I think Egypt continues to be in a troubled condition but I would not say a crisis. But I think you're exactly right to focus on it as in many ways, if not the most important, one of the two or three most important nations of the Middle East for all sorts of reasons and we need to work very hard to try to keep our relations with the Egyptian government such that we can have some leverage on them to battle corruption and especially which feeds the anger of the state is one part of what's going on.

With respect to the CIA guidelines, I don't want to comment about the guidelines themselves, but let me say what I think the relevant parameters are. First of all, if one is going to conduct covert action, under a finding submitted to the President, a CIA case officer overseas needs to be particularly careful whom he recruits and uses for that action. To use only one example, you don't want to overthrow a government of thugs with a worse group of thugs.

You may well not want to smuggle weapons to someone using murderers because the murderers may take them and kill people with them, and so on. There are legitimate ethical tests, in a sense, to people whom the United States uses as its agent, in the traditional legal sense of the word, taking action for the United States. An agent that a case officer recruits to conduct a covert action.

Now when we recruit spies inside governments, there are a reasonably large number of people, and this was certainly true in the old Soviet Union and it's true around the world today, for whom the United States is a beacon of democracy and idealism. And there are a number of people who work for the United States as spies, foreign individuals, who do it out of a sense of idealism. Colonel Penkovsky (sp) recently in a book called "The Spy Who Saved The World," for his role in the Cuban missile crisis, is one example. A wonderful man, Colonel Kuklenski (sp), a Pole who spied for the United States for 10 years and gave us the Warsaw Pact war plans year after year, who lives here in the United States now.

Many of these people, I don't know that I'd say a majority, but a fair number of people who were trapped in governments that they hated, whether it's North Korean or Soviet or whatever, saw the United States, and see it still, as a beacon of freedom in the world, work for the United States out of a sense of idealism. Some of these people will take money sometimes, many of them don't even take money.

But when one is trying to penetrate with espionage a terrorist group, let's say, if one doesn't know enough about what Hezbollah is doing, the problem isn't that we have too many people with bad human rights backgrounds as spies, it's that we don't have enough, because there's nobody in Hezbollah unless he wants to be a human rights violator.

By the same token, let's say the Attorney General cannot successfully penetrate and prosecute the Mafia if the US Attorneys and the FBI are told, don't make deals with crooks, because that's the way you penetrate the Mafia. That's the way you get convictions.

Your or my next door neighbor today may be Sammy "the Bull" Gravano living under an assumed name. He was a hitman for John Gotti, confessed to 19 murders, probably committed more. Walked, as a result of his testimony against Gotti, and I think the Justice Department made the right decision. They got John Gotti convicted. And they did it by doing a favor for a murderer of 19 people. Now a big favor, giving him his freedom.

So whether one is dealing with law enforcement or with espionage there are circumstances, particularly when operating against criminal groups and terrorist groups and the like, in which one absolutely must use informants, who are not only a little bit unsavory, but absolutely awful people.

We do have rules. The terrorist statutes mean that if someone has been involved in an action, a crime, particularly a murder against an American citizen that needs to be reported to the Justice Department, there are important steps like that. But I think it's important to sort of parse out the circumstances and what one is using an informant or a spy for. And I think your question was a very good one.

REP. FOWLER: Thank you. Thank you, Mr. Chairman.

REP. SPENCE: Mr. Snyder.

REP. VICTOR F. SNYDER (D-AR): Thank you, Mr. Chairman. I wanted to ask a couple of questions if I could about the Cooperative Threat Reduction Program.

Doctor Deutch you made a comment in your statement that you considered the funding to be of continuing importance. Mr. Thornberry was active in the last year to keep those funds from having some provisions put on them. He and Mr. Spratt and some others and it was a very close vote in the House. I think some folks see that it might be mistakenly as foreign aid, that somehow it's something that you can hold hostage to bad behaviors on the part of governments and specifically this particular amendment was trying to link those monies to some Russian help to Iran.

I think that the question, it's ironic I ran into a scientist the other day who's a former scientist who's now in the diplomatic corps from a newly independent country and he was very, we were talking about this issue and I think he's bored being a diplomat, that a lot of his colleagues who formerly worked in Russia are now working in Iran because they couldn't find a place to work. And do you have any comment that you, Dr. Deutch, about the Cooperative Threat Reduction Program and its possible linkage and holding those funds hostage in the future?

MR. DEUTCH: Well, I do have comments about it. If you are looking for a nuclear weapon today in the world, or today or strategic nuclear material, the single place you're most likely to find it is through a leaky Russian laboratory or in some part of the weapons complex. So the efforts to reduce the number of Russian nuclear weapons to dismantle them, to have the strategic nuclear materials stored under safer conditions, to improve materials accountability throughout the whole Russian complex is absolutely in the United States' national security interest.

And I regard it as being appropriate, and can say this now, as a former government official, it is appropriate to put in the defense budget and I think it should be run largely by the Defense Department and also by the Department of Energy. I do not think it's foreign assistance. I think it goes to the core of what my former boss, Phil Perry called preventive defense. It is very much in our interest. It should be bipartisan and the more people care about defense, the more they should be voting for this program. And I think the arguments that you can solve, or should wait until all problems in Russia are solved, before you do it are very shortsighted indeed. I don't say the Russians aren't doing things with the Iranians that they shouldn't be -- that they are doing bad things with the Iranians.

But it is in our interests to reduce the missile sites, to help them destroy their long-range missiles, to buy highly enriched Uranium from them, to improve materials accountability at their very leaky weapons complex. I noticed the other day incidentally that at the Smolensk nuclear power station there was a strike of workers, at a nuclear power station.

Now fortunately that's not a nuclear stockpile. At the nuclear power station there was strike of workers. They have not been paid in nine months. That situation has to be remedied for our own national security interest. So I believe that both sides of this aisle ought to strongly support this program. It is very modest indeed and it should be, as best as possible, it should be run by the Department of Defense. It is not a foreign aid program. I hope, I mean, I'm trying to be as clear as I can.

REP. SNYDER: Yeah. I appreciate it. Mr. Woolsey in your statement I don't see a specific reference to the Cooperative Threat Reduction Program but you do mention this problem of scientists looking for work. Do you have any comments on the program?

MR. WOOLSEY: No. I think it is important to support the program and I think it's important for us to be clear and blunt with the Russians when these firms undertake actions abroad in Iran or Iraq or anyplace else. But it does seem to me that Nunn-Lugar and those types of programs ought to have bipartisan support and that they're extremely useful.

REP. SNYDER: Yeah. I also want to ask you, Mr. Woolsey, you in your statement talked about the need for negotiated agreements with Russia to reduce in your phrase the likelihood of tragedy or accident. Would you amplify on that a little bit, specifically what areas?

MR. WOOLSEY: Well, I think that there are no imaginable circumstances in which we should remove warheads from our ballistic missile submarines or otherwise hinder their ability to patrol at sea as a deterrent to nuclear war.

But I would say that given this delicate situation with Russian command and control, gaps in their early warning, uncertainty about the pay for the strategic rocket forces, the elements that I mention, I think there could be some utility in discussions with the Russians about changing the structure of alert status for land-based missiles.

Now the Russians might not want to bite on that because they are having trouble keeping their ballistic missile boats at sea for reasons of maintenance and cost and the like.

But nonetheless, although the chances of an inadvertent Russian nuclear launch in response to a Norwegian sounding rocket or anything else, are very small, the consequences would be so devastating that I think we should at least begin to explore with Russia how we might in some type of exchange of information of agreed inspections in some fashion see if we can persuade them through some actions that we would also be willing to take to put more barriers between the decision in a hectic circumstance to launch a nuclear weapon and the actual occurrence on the Russian side.

I also think that a national ballistic missile defense for the United States, at least one that is capable of dealing with a relatively small number of weapons launched in an inadvertent or accidental or unauthorized launch is an important priority. I think those two things go hand in glove.

REP. SNYDER: Thank you gentlemen. Thank you, Mr. Chairman.

REP. SPENCE: Thank you.

Mr. Thornberry.

REP. WILLIAM M. THORNBERRY (R-TX): Thank you Mr. Chairman, and let me express my appreciation to both of you for the statements that you have made. Like, I think, all of us it is important for this committee to have a perspective of the shape of the forest, not just the tree that's the biggest one in front of us and sometimes that's difficult to do. You all have both helped us to do that today, and let me also say I appreciate the comments that you've made on the Cooperative Threat Reduction Effort because it is kind of amazing to me that it is as controversial as it is. Regardless of what other things the Russians are going on it seems to me it's in our best interest.

Let me just throw out two things that I would appreciate you all's comments on regarding the current situation in Iraq. Number one is the relationship between Iraq and Iran. Now, how does that influence things, how is that going to change over time? Number two, what are the chances that if we launch air strikes next week or the week thereafter that Saddam Hussein would actually attempt to use some of the chemical or biological weapons he has available on a SCUD or something else? What are the dangers that our forces or our allies in the region may face with those kinds of weapons if we go ahead with an attack as we're talking about?

MR. DEUTCH: The relationship between Iran and Iraq is a strange one. It is hostile and has been so, off and on, for many, many years, going back in the ancient times. Today, I think Iran's posture is that it does not want to look as if it is standing aside from the Arab nations of the Mideast in any way of encouraging the United States to take action against Iraq, but this is almost an ideal situation for Iran, because its two principle enemies, Iraq and the United States, are at odds with one another.

I think that Iran will probably, for the foreseeable future, try to do tactically, in the short run, anything it can to weaken either Iraq or the United States, and if possible, both. And therefore, you may see some odd tactical moves, such as Iranian assistance or cooperation with the Iraqi's under some circumstances. Or standing off from them, if they feel that the Iraqi's are gaining an upper hand.

I think if we launch strikes, Saddam would be very ill-advised to use a SCUD or aircraft-delivered weapons of mass destruction anywhere in the Mideast.

I am afraid that I think that his cleverest move would be terrorism. Now, the Iraqi terror network was rolled up very effectively by the US government, principally by the CIA, in 1990-91, and we were very worried at the time about Iraqi terrorism.

I was the beneficiary of this rolling up, to some extent, because I was an Ambassador negotiating an arms control treaty based in Vienna during that Gulf War, and there was a great deal of security and we found out later how effective it had been, and a good part of what had happened had been that the United States went out to governments all over the world and said, "we are dead serious, we want anybody who remotely might be an Iraqi terrorist taken care of and jailed, get kicked out of the country or something" and many, many countries cooperated.

But, that doesn't mean that Iraqi intelligence is dead forever and it doesn't mean that it can not, through intermediaries or otherwise, sponsor terrorism. It's easier for it to do so in the Mideast, it does not have the worldwide reach, at least I don't believe yet that Iranian terror of operating through Hezbollah and others does. But, it's not dead and I'm afraid that the cleverest move by Saddam in the event of a war would probably be terrorist actions against either US forces in the region, or even against someplace here in the United States, and to do it with a hidden hand, making it look as if it were Iranians or Sudanese or someone. MR. : May I just make a remark about Iranian-Iraqi relations. I think they have historically been lousy, and there's every indication to believe that they will be lousy for a long time to come. We do have the recent example of Iranian help to the Iraqi Shi'ites minority population south, in 1992. We have even more recent example of a significant Iraqi assistance to the PEK Kurdish groups in the north, at the same time that there was activity between Saddam Hussein and the other Kurdish factions.

So, there is plenty of evidence that Iran is not going to be tremendously friendly towards Iraq, and indeed, that's one reason why I think it bodes to our interest to try in Iraq with Iran, in the near term, provided they give up their considerable sponsorship of terrorism around the world. With respect to the use of chemical biological agents, I think that can not be ruled out, it's something that would have to planned for, both with our forces in the region, planned for with our allies, which are even more vulnerable than we are, and plan for it at a greater distance.

But, I do take some note of the fact that in the Gulf War, the statements made at that time by Secretary Cheney, by the President, and by others, made it clear to Saddam Hussein, that if there was any use of weapons of mass destruction, that he would be toast and there would be no end to what the United States would be willing to do to overthrow him. So, I think that he's enough of a rational person, enough of a calculating person, I should say, if not a rational person, to understand that if he were to use these, that the vengeance would be complete and swift and thorough.

REP. SPENCE: Mr. Taylor.

REP. GENE TAYLOR (D-MS): Thank you gentlemen, for sticking around as long as you have, and welcome back, Mr. Deutch.

MR. DEUTCH: Thank you, sir.

REP. TAYLOR: (Welcome C17 this morning?), he was flying over Charleston the other day, and you were right on that one.

MR. DEUTCH: Thank you.

REP. TAYLOR: Congratulations.

Two things I'd like you to respond to, Mr. Woolsey. I did read your remarks about the thought of targeting Hussein himself. But we are the rule of law, that's what this country's all about. And I realize that there is an executive order that bars foreign assassinations. But if Congress were to take the step of a vote of both houses, telling Saddam Hussein that he will be personally liable for the violation of the UN sanctions, and that he personally accept the consequences, and we are given he power in Article and section of the Constitution to go to war. What would be the reaction of putting him on the spot under such legitimate circumstances? That would be my first question to both of you.

The second one is, I'm curious, what your thoughts are on should the US mission in Bosnia, shift from the present peacekeeping, to the possible rounding of -- (inaudible). And what he should be able, number two, if you think we should do it, what do you think the reaction would be there?

MR. WOOLSEY: Let me take the first one, if I could, Congressman Taylor. Certainly if Congress acted by law to essentially repeal the executive order 12333, and had it be legal for the Executive Branch to conduct assassinations, in the same way that it was not illegal, back in the '50s and '60s, during the time when the CIA so ineffectively tried to assassinate Castro, for example. But if Congress acted to essentially repeal the executive order, then my objection on the grounds of illegality, of course, would be gone.

I still think, in terms of actually trying to find Saddam, and this is something even Mr. Stephanopoulos admits in his article in Newsweek, it would be almost impossible and double the changes where he stays, and so forth. So, an actual assassination attempt, I think, would not succeed.

And I think on policy grounds, this is something that the United States really ought to do only in the event of something as serious as World War II. If you take the hypothetical, should the OSS, if it had known about it, been willing to cooperate with Councilman Staltzenberg (sp) and the other plotters to assassinate Hitler in 1944. I would say yes, that was a war to the death between a totalitarian power that had conquered Europe, and the United States and its allies. And that to me is a different circumstance than we have today.

But, and I would also add that under the Justice Department's interpretation of 12333, and the aftermath of the Libyan raid that was the raid on Tripoli that was launched in the Reagan administration, it is not illegal, as I understand it, to bomb a number of command and control centers, and if one happens to kill senior people in the government, including the national leader, that does not come under the prohibition against assassination in 12333.

But, I think if one is talking not a military raid, but a classic case of using assassins, in the sense that Mr. Stephanopoulos argued for, an inside job --

(Off mike.)

I don't think that should be done, except in --

REP. TAYLOR: I don't particularly, not to use the word assassination, because I think if you put someone on notice ahead of time, that these are the rules. You're going to abide by the rules of any state of war -- (inaudible) -- between you, the person who has spoken to you, and those who seek to enforce it. I see that a whole lot differently in an --

MR. WOOLSEY: Well --

REP. TAYLOR: -- assassination attempt that is done covertly.

MR. WOOLSEY: Well, to be success, assassinations tend to need to be covert. And putting him on notice, in a sense, makes it clear what the US government policy is, and but to my mind, the effect that has, is that it repeals the executive order and makes it legal to --

REP. TAYLOR: (Inaudible) -- the rules are, that's an executive order, number one. Number two, as you both pointed out very clearly, that you're talking about someone who is a thug.

MR. WOOLSEY: Worse.

REP. TAYLOR: Fine. Who doesn't care if his people are hurt. I do think he cares about himself.

MR. WOOLSEY: Yes.

REP. TAYLOR: And I think we've been targeting the wrong people.

MR. WOOLSEY: Well, I have no objection, and certainly the Justice Department's interpretation of the executive order has removed any doubt that it is quite legal, under American law today, in a military action, to try to bomb facilities where he might be located. In World War II, we were able to kill Admiral Yamamoto in an action of exactly that sort.

We broke the Japanese codes, we knew what airplane he was on, we sent some P-38's up and shot it down. But that was a military action in wartime against a hostile aircraft. A military action against the Iraqi capital in which facilities were bombed, were Saddam might be present is legal today, as I understand it, under the executive order as interpreted by the Justice Department.

MR. DEUTCH: Mr. Taylor, let me make two remarks. First of all, I think you're distinction is a completely appropriate one, indeed, I think it has a certain lure to say to Saddam Hussein declare publicly the matter of US policy that he will personally be held accountable if this situation continues, or worse, if he takes certain hostile actions.

I believe is completely appropriate, and I think it is absolutely right to say that he will be held personally accountable in the overt ways that are used by both our military forces and our law enforcement agencies. So, I think that has a certain recommendation to recommends itself, in my mind. What I think is not to be done here, it is bad for US policy, and I will join Jim Woolsey in worrying about it, is to say that we have a policy in this country of using the CIA to covertly, and that, I know you're not going to address in your comments, I believe the current executive order is proper in this regard, and should not be, just to make it clear, changed for the sake of Saddam Hussein.

Let me say a word about your second question, which was about Bosnia. I might here have a slightly more, I think the right word is conservative view. I think that Mr. Sisisky struck a responsive cord with me, while we're there, maintaining having had a long record now in Bosnia, maintaining the peace and trying to bring that country together, a war our European allies. It is really in their neighborhood, not in ours.

So, my criteria for Bosnia, and I think you should always start, was how do you get out? It's always the question in military force deployment, how do you get out? I take a very conservative view, you stop the killing, you try to put in some stable government which will manage the area, and then you get out. And the notion that we are going to be committed there as a country, to go through all of the terribly complicated and demanding and I hope, success, eventually, building of democratic institutions, including the rule of law, is really something more than I think US military forces should be doing there.

So, my view with Bosnia is, we've done a tremendous job, our military forces there are absolutely extraordinary what's been accomplished with almost no loss of US lives, it's cost the US taxpayers a great deal of money, the issue is when you get out. And from that point of view, in order to get an answer, to get out, it means that you have to have a narrower mission, rather than a broader mission. And I hope Europeans and the people in the area can work together to make it happen, but I'm concerned that I don't see clearly when we're getting out, and when the Europeans are going to step up to take up the slack.

REP. SPENCE: Mr. David Hostettler.

REP. JOHN HOSTETTLER (R-IN): Thank you Mr. Chairman, and as Mr. Taylor said, I want to thank you gentlemen for spending such a long time with us this morning. Mr. Woolsey, your opening statement, you have an interesting perspective on the developments in the Persian Gulf, with regard to the Saudi's allowing us to launch attacks from bases in that area. I think it's very plausible reasoning as well, because they feel that we don't have the resolve or the capability to get rid of that angry viper as you say, and they'll have to put up with him for the time being, until that time comes.

So, this brings me to a point that's been made several times in this committee with several witnesses, and that is the idea of fighting in coalition forces. I think it's not coincidental that during that time that decision that was made that we couldn't make air strikes from Saudi bases that we decided to take an aircraft carrier, as Mr. Sisisky points out that was going to the scrap yard and decide to put it in the hottest military region on the face of the earth and have it possibly and probable go to time conflict.

So, is it something that you and you both can answer this, but, is this dependence on coalition -- building coalition forces and to the extent that we may have as one of you put, the most telegraph first punch in the history of war, that we have to build these coalitions gruelingly so and have to go on television to make our case from time to time so that we do use that opportunity to make that surprise attack.

Are we capable of going alone, should we go at it alone, and isn't this one more example of the fact that we can not always depend on coalition forces for vital national interest.

MR. WOOLSEY: I think part of the problem, Congressman Hostettler, is that we let the coalition, more less deteriorate over time after 1991. I think it was Mark Twain that once said that the United States has never lost a war nor won a peace conference. And that's not entirely true, we now have lost one war and we've won some peace conferences, but the jibe adds something to it.

We won the Gulf War, and then by not protecting a Shi'a in the south, by not establishing a no fly zone over the whole country right away and then by being, I think as I said, rather lax with respect to our retaliation against Saddam for some terrible provocations, including an attempt to assassinate the former President of the United States. Over the course of the last five, six years, (expanding ?) two administrations, I think we have let the coalition more or less deteriorate and that we really need it, we have had to go to some substantial links to try to rebuild it and we've only rebuilt it in part.

It strikes me as a former undersecretary of the Navy, I must say, that I don't think we've lost an aircraft carrier since Battle of Midway and we've lost an awful lot of maces on land to changes in government and the winds of various governments.

So, we're very, very lucky that people in the past at a foresight to have a carry flee, otherwise we would be in very bad shape in the Gulf today. And to a limited extent in some circumstance, at least as far as military power itself is concerned, carriers can replace coalition bases. We'd be in much better shape if we could operate the larger Air Force aircraft out of the Saudi bases, but the carriers provide a lot.

But, carriers can't provide political support. They can't do what we would have been able to have done with a coalition that had been held together over the years, since 1991 because we were being really tough with Saddam. And so we put ourselves over the course of the last six, seven years, I think into a very, very difficult situation, and we're climbing back uphill now to try to put the coalition together and have the wherewithal to execute really effective military strives.

But have we, those decisions have already been made. And whether we made those decisions based on what we wanted to do as far as a political outcome in that region, or in effect, to affect a military end, we made those decisions --

REP. HOSTETTLER: -- yea.

MR. WOOLSEY: -- and we have to live with those. And as you say, it expands two administrations, so we're not necessarily facing partisan fault, but we made those decisions and now we have to live with them.

REP. HOSTETTLER (?): Isn't it in fact the part, the role of the military and our commitment to national defense to make sure, that whenever, if we do make those -- (inaudible) -- in diplomatic policy, that we have military capability to back up a vital national interest?

MR. WOOLSEY (?): Yes. I think that's absolutely right.

REP. HOSTETTLER: Thank you very much.

Thank you Mr. Chairman.

REP. SPENCE: Mr. Abercrombie.

REP. SKELTON: Would the gentleman yield just a moment?

REP. NEIL ABERCROMBIE (D-HI): Certainly.

REP. SKELTON: I hate to correct the witness, but I think in the Battle of Philippine Sea (ph) --

MR. : Gulping Sea (ph), were they jeep carriers or full carrier?

REP. SKELTON: They were aircraft carriers, airplanes landed on them and they took off.

MR. : I accept the correction Mr. Skelton, but I do believe that they were probably jeep carriers, which aren't really full aircraft carriers, but it's nonetheless it's a sound point.

(Laughter.)

MR. : Thank you.

REP. ABERCROMBIE: Thank you very much.

Dr. Deutch, Aloha to you, pleasure to see you again.

Mr. Woolsey, Aloha.

Dr. Deutch, and Mr. Chairman, I apologize, I had to leave for a brief time, and I hope I'm not repeating a question. Please let me know if I am.

Dr. Deutch, on page two of your testimony, it says that it is unclear whether the long run of the direction of the US, China's relations will evolve toward strategic competition. That's an interesting phrase, we might explore.

Our relationships such as we have with a democracy, accordingly paramount importance for the US to maintain strong presents in the Pacific region, a strong alliance relationship's most particularly with Japan. Dr. Deutch and Mr. Woolsey, if you care to answer as well, I have done, and I'm sure the chairman would agree, among the strongest opponents on this committee and I believe in the Congress against what's commonly called Transfer of Technology. In the light of the statement that you made, Dr. Deutch, do you have something that you could share with us in open session here in terms of a view, an opinion of perspective with respect to the transfer of technology and how that might imperil the national security interest of this nation.

MR. DEUTCH: At this late hour, you are raising a huge question. So, let me try --

REP. ABERCROMBIE: That's my job, that's what the chairman told me.

(Laughter.)

REP. ABERCROMBIE: I'm a big question guy.

MR. DEUTCH: Let me try and respond, maybe --

REP. ABERCROMBIE: Before you do, Dr. Deutch.

Obviously I don't expect you to identify --

Mr. Chairman, perhaps if either gentleman would care to expand beyond brief remarks now, I think it would be very valuable to the committee.

MR. DEUTCH: First of all let me say that there are three categories of technology I assume they're referring too.

One is military technology, the second in commercial technology and the third is the most difficult category dual use technology, which is becoming more and more prevalent especially information technology.

And I also want to restrict my remarks to China, although --

REP. ABERCROMBIE: Yes.

MR. DEUTCH: -- let me make it more broader. With respect to commercial technology, I believe that there's no reason to have anything but the greatest happiness with this taking place, for several reasons. One is it's been extremely good for US business and secondly when we, not to do it, certainly are other nations would be doing it and the commercial advantage of doing trade with China for example in aircraft, telephones, and the like, would go to someone else.

I think it is not possible to stop the flow of commercial technology as it becomes part of the open trading system between countries and I would not suggest doing so with respect to China. Secondly, military technology. Here, I would first of all note that China is becoming the best customer of Russia for its technology. And I would say that I would by much more circumspect about transferring military technology to the Chinese, especially those which have allowed them to have better command control or communications among their forces, I would just rule that -- rule that out.

Dual use technology, remains a very thorny problem and of course I guess the case that is most in front of us recently was the issue helping the Chinese with nuclear power reactors, nuclear power reactors at the time Jiang Zemin visit here to Washington. In light of the fact that the Chinese have over a period of many, many years given assistance in nuclear technology to the Pakistan's program.

My own view on that is that each one of those cases must be the dual use cases, must be looked at separately. I would've supported the use of US technology for nuclear power -- commercial nuclear power in China. But, many of the dual use technologies that might be traded to China, in my mind, over the long run of considerable concern.

That is a very short hand answer --

REP. ABERCROMBIE: Thank you.

MR. DEUTCH: -- I hope I'm getting to the issues that are --

REP. ABERCROMBIE: Yes, you are.

Thank you very much.

Mr. Woolsey.

MR. WOOLSEY: I give an even shorter one.

I think we have moved to quickly and to fully to remove the constraints on export particularly some sensitive types of the dual use technology and I think that whole issue deserves another look.

I think we've dismantled the Cold War era machinery on this and moved away from it so sharply and so decisively that we have allowed the export of some things, like supercomputers in the like that we should not have. And, I think the issue ought to be reexamined by the Congress and the administration.

MR. DEUTCH: Mr. Chairman, if I could just make a remark here, I would like to associate myself with that. Despite efforts to put together something after COCOM (ph) the Cold War sort of east, west controls this so called (vosanar ?), vosanar process. I don't think we've effectively either with respect to other countries or with the US government itself, adequate attention to dual use technology exports to these countries of concern. REP. ABERCROMBIE: Thank you.

Mr. Chairman I probably should have practiced my question with another brief observation. But, the broad of my concern gentleman, comes from the fact that much of the business being done in the -- in the Peoples Republic of China, is done be the Peoples Liberation Army through front -- maybe front sounds good -- but I mean through corporations in which they in effect control.

So, my concern is that we may be in fact financing activities of the Peoples Liberation Army that may not be in the interest of the United States.

MR. DEUTCH: That's certainly going on.

REP. ABERCROMBIE: Thank you, Mr. Chairman.

REP. SPENCE: Mr. Bartlett. Yes, Mr. Bartlett.

REP. ROSCOE BARTLETT (R-MD): Thank you very much. I want to thank you both for you testimony and for your endurance.

Both of you mentioned the problem of our dependence on foreign oil. The fact that we have two percent, as you indicated, of the known reserves of oil and we now use about 25 percent of the worlds energy. I would think, would demand a national energy policy. You were both correct, I think, in implying both implicitly and sometimes explicitly that it's pretty silly not to have a national energy policy. And as far as I know, we have none.

Mr. Woolsey, you mentioned the Russian control instability and the risk that we run of an inadvertent errant attack from that. Our president has on, at least 24 occasions, that we documented, told the American people that they can sleep well tonight because not one of their children are targeted by a Russian intercontinental ballistic missile.

Now, he knows that that can not be verified. He knows that even if it's true, it's irrelevant because the Russians have bragged that they can retarget their missiles in ten seconds and we know that they can do it within about 30 seconds. Why would he continue to tell the American people this?

MR. WOOLSEY: Well, I wish you would not continue to make that statement, Mr. Bartlett, because although, it may be technically true as you suggest, I believe, it is misleading.

The only circumstance in which the fact that the Russian ICBN let's say are not targeted on American targets if the Russians have in fact done what they say they've done. The only circumstance in which that really would be important would be a theoretical launch because some wires got crossed or something like that which is far and away the least likely situation for any kind of inadvertent launch to occur.

I think you're quite correct in saying that in well under a minute these missiles from everything I've known about them over the years could be retargeted. And so any of the interesting and troubling scenarios such as a Russian response to a Norwegian sounding rocket and so forth, as I was talking about earlier, would be a circumstance in which the missiles would be quickly and readily retargeted.

It's almost like saying, if I could use only a slight sense of hyperbole, if I had a revolver here in my pocket and I took it out and pointed it at the ceiling is saying I'm not targeting any member of the committee. It's true I wouldn't be, I guess, I'm pointing it at the ceiling but if I lowered it I would be. It'd just take a few seconds. That's the only sense in which the president's statement is accurate and --

REP. ABERCROMBIE: Mr. Chairman --

MR. WOOLSEY: -- when I studied philosophy years ago, there's a phrase that something can be true but trivially true. I think what the president has said on this is true but it's trivially true and I think it's misleading.

REP. ABERCROMBIE: Mr. Chairman, may I note for the record that Mr. Woolsey was pointing at Mr. Bartlett.

(Laughter.)

REP. BARTLETT: I have one other question. Both of you mentioned the potential threat of damage from terrorist weapons of mass destruction and Dr. Deutch mentioned a damage to our infrastructure. Mr. Woolsey mentioned the potential use of the launch of a SCUD missile from a tramp steamer. After you launch the missile, you could kick the launcher overboard and we wouldn't even know who did it and to whom to retaliate.

Let me suggest that perhaps the ultimate terrorist weapon of mass destruction would be a nuclear weapon that was not detonated on a city or on a military target but was detonated high in the atmosphere. A single weapon detonated over Nebraska for instance, the EMP from that weapon could shut down our total domestic infrastructure, no more power, no more communications, no more transportation. Would you comment on the potential for this type of nuclear EMP production?

MR. WOOLSEY: The effects of Electromagnetic Pulse and our efforts to design systems and communications systems and the like that would not be susceptible to them is worth many books, not just an answer or even a chapter or two. In order to get a nuclear weapon over the United States, one would have to have an intercontinental ballistic missile, or perhaps a launch of a shorter-range missile from some type of platform of the sort you described.

There's an even more troubling notion, Congressman Bartlett, which is that a missile carrying a nuclear warhead launched straight up from a rogue state and detonated at a particular altitude could well take out a very, very large number of important satellites. Indeed, that might be the most effective use of a single nuclear weapon that a North Korean or an Iraqi government some day might have.

So whether one is talking about effects in space or EMP effects in the area, yes, there are some very important and troubling concerns that could derive from that type of the use of a nuclear weapon, quite apart from it being detonated ground burst or at a burst to maximize overpressure in such a way as to destroy troops and people on the ground.

REP. BARTLETT: Thank you. This satellite effect you mentioned would be primarily due to pumping up the Van Allen belts, and it would destroy, I understand, $ 50 billion worth of satellite, and it would do no good, even if you could, to launch a new one because the Van Allen belts are still pumped up. We have only two satellites, which are immune to this, and that's the two MILSTAR satellites. All others are enormously vulnerable is my understanding.

MR. WOOLSEY: Depends on the altitude. As I understand it, low earth orbit satellites would be particularly vulnerable to this kind of attack.

REP. BARTLETT: Thank you very much.

REP. SPENCE: We'd better break right here. We have a vote, and we'll come back and get from Mr. McHugh. One thing you can ask him about those ICBMs in China, when the President said that they're going to target it on us.

REP. MCHUGH: Mr. Chairman, could I just --

REP. SPENCE: Why don't we go ahead and we'll --

REP. MCHUGH: Mr. Chairman, I don't want to cause an inconvenience to the witnesses to have them remain solely for my questioning. Let me present two questions that they can answer in writing, if they would and then we can break, I think, with mutual convenience.

Dr. Deutch, if you were the secretary of Defense, what would be your first policy initiative?

And, Mr. Woolsey, you indicate on page 6 of your testimony that in your judgment "it will do little good," referring to the Persian Gulf crisis, "little good to try to use air strikes alone." Are you advocating the use of ground forces?

MR. WOOLSEY: If I can answer that quickly, no. My comment was meant to deal with little good to use them alone against storage of weapons of mass destruction. Air strikes that break the power of the Republican Guard, together with such steps as establishing a no fly zone over the whole country and recognizing a government in exile, I think would be -- that's what I'm talking about; not using ground forces against Iraq.

REP. MCHUGH: Thank you, Mr. Chairman.

REP. SPENCE: Thank you. And again we're going to try to make that vote and adjourn that meeting. Thank you very much, both of you, and you do a good service to your country.