We welcome the director of the Central Intelligence Agency and the director of the Defense Intelligence Agency. We thank both of you for joining us -- a long tradition this committee initiates its annual work under the authorization bill with a worldwide survey from our intelligence.

I've always viewed intelligence as a force multiplier. For a relatively small investment, America can obtain that knowledge which best enables the planners to structure the size of the forces, to equip the forces and to project in the outyears the research and development that is needed to meet the emerging threat.

This committee has established a subcommittee in recognition of the seriousness as a consequence of the spread of weapons of mass destruction, the ever increasing tempo of terrorism, the diversification of the sources, and the reasons for which that terrorism is brought to bear on our country.

So I am going to ask that my statement be placed in the record, because I am quite anxious to receive the testimony of our two witnesses.

Senator Levin?

SEN. CARL LEVIN (D-MI): Mr. Chairman, thank you. And I want to join you in welcoming both of our witnesses this morning. And their testimony on current and future worldwide threats sets the stage for the hearing tomorrow with Secretary Cohen and General Shelton, and the other hearings which you've scheduled, Mr. Chairman, for the committee that we are going to be holding in the coming weeks.

The advance testimony of our witnesses this morning provides a very sobering view of the future, particularly the threat of weapons of mass destruction and terrorism, and the potential of terrorist use of chemical, biological and radiological weapons. It is important for us to fully understand the most likely threats to our deployed military forces and to our homeland. It's important for us to understand whether it is likely, very likely, or what the degree of likelihood is that a rogue state or a terrorist group would attack the United States with a weapon of mass destruction smuggled across our borders. And compare that to the other potential threats that we face, for instance the missile threat.

It is important for us to hear from our witnesses on the situation in the Balkans, including Bosnia, Kosovo, Macedonia and Albania. Both our witnesses in their prepared testimony have indicated a real concern about the increasing ability, as Director Tenet says, of small actors to have a large impact on U.S. interests. And I very much share these concerns. Although I have long supported for instance our military involvement in Bosnia for a number of years, I have been urging the continued reduction of U.S. combat forces in Bosnia and their replacement by a combination of military and paramilitary forces, primarily from Europe. And we should hear from our witnesses, and will hear from our witnesses today relative to the situations that we face in Bosnia, in Kosovo, and other places in the Balkans and around the world.

But at least I want to add one comment here of my own, and that is that I applaud the European initiative in seeking to achieve and implement a peace settlement in Kosovo. And given the threats that we are going to hear about that we face around the world, and our commitments that we made around the world, it is important for the Europeans to take the lead more often in their own back yard. So we are going to be facing a number of decisions in the next few weeks relative to possible NATO airstrikes, to trying to address some of the threats that we are going to hear about this morning. But in the meantime I do want to express my own very strong support for the Europeans taking the lead in NATO in addressing some of those threats in the Balkan countries, and particularly in Kosovo.

And I look forward to the testimony of our witnesses on the broad range of threats, and agree with you, Mr. Chairman, that the intelligence that they help us to gather and to organize for the consideration of our policy makers is critically important to the development of useful and effective policies.

SEN. WARNER: Thank you very much, Senator Levin. I too join in recognizing that long last the NATO nations, and indeed I think strong leadership from the United States, are now recognizing the need to deal with the problems in Kosovo.

I have spoken out for many months on this subject, consistently indicating that in my judgment airstrikes alone would not secure that country -- secure it in such a way that it does not leak over into the situation in Bosnia. This country has an enormous investment, together with our allies, in what we have been able to achieve, although quite modest in my judgment -- what we have been able to achieve to bring about the cessation of hostilities and the economic restructuring and rebuilding of Bosnia. But the instability in Kosovo could bring that creeping progress to a halt, and indeed make it far more difficult, and put at risk our own troops in Bosnia. And it is for that reason that I have sort of spoken out in the Senate for the last four months indicating that a ground force element is essential in Kosovo in the region of Pristina, and that a segment of that force should consist of U.S. personnel, primarily in the intelligence and the communication, to lend support to the commander in chief of all NATO forces, an American general, General Clark. So that's my views on that, senator. I hope in due course that you can share those views.

Senator Thurmond, do you have a word to welcome our --

SEN. STROM THURMOND (R-SC): Thank you very much, Mr. Chairman. I ask unanimous consent that the opening statement by me will follow your statement for the record.

SEN. WARNER: I thank you very much. Senator Robb, do you --

SEN. THURMOND: And Senator?

SEN. WARNER: Yes?

SEN. THURMOND: I have some questions for the witnesses that could be answered for the record.

SEN. WARNER: They certainly can. We recognize you have to open the Senate at 10:00.

SEN. THURMOND: That's right, thank you.

SEN. WARNER: Senator Robb?

SEN. CHUCK ROBB (D-VA): Thank you, Mr. Chairman. And, as you do, we both have a funeral to attend later today. It's my hope to come back and particularly in the closed session to ask some questions. I hope that we might be able to submit questions for the record --

SEN. WARNER: That will be done.

SEN. ROBB: -- under the circumstances. I share your concern and views with respect the severity of this particular situation, and have been urging a more assertive role for a similar period of time, and I thank you for your both position and leadership on this, and I look forward to hearing from both Director Tenet and General Hughes.

SEN. WARNER: Thank you. The record will remain open for submission of questions for the balance of the 24-hour period after this hearing.

Senator Sessions?

SEN. JEFF SESSIONS (R-AL): Thank you, Mr. Chairman. I would just wait for my time to question and would move on to our guests. SEN. WARNER: The Senate has been under sort of an irregular schedule for some time, and that I think speaks for the absence of a number of our colleagues. We scheduled this hearing weeks ago. Recognizing the importance in order to keep the work of the Senate going forward, Senator Lott has urged committee chairmen to set these hearings and therefore we set this one not recognizing that on this day, normally a very active day in the Senate, a number of members are now returning to the city.

So with that we will proceed.

I think a brief opening statement by both of you relative to Kosovo would be a wise place to begin. So perhaps you could start with that.

MR. TENET: Thank you, Mr. Chairman, I will start with Kosovo, and then I will double back to the --

SEN. WARNER: And we'll need to have you draw that microphone up somewhat more.

 

STATEMENT OF

GEORGE J. TENET
Director, Central Intelligence Agency

 

MR. TENET: With regard to the Balkans, Mr. Chairman -- and thank you for having us. Both General Hughes and I believe this is a very important session. It's one of our rare opportunities to inform the committee and the American public in open about the threats the country faces, and we take this responsibility very seriously. So thank you on behalf of both of us for having us.

With regard to Kosovo, Mr. Chairman, I want to go through some things and a little bit of history and tell you where I think we are today. With regard to Kosovo and the Balkans, you are correct -- it is the most acute problem. The Kosovo Liberation Army will emerge from the winter better trained, better equipped and better led than last year. With neither Belgrade nor the Kosovar Albanians willing to compromise at this point, spring will bring harder fighting and heavier casualties unless the international community succeeds in imposing a political settlement. The fragility of any political solution is likely to generate pressure for the international community to deploy ground forces, to enforce implementation and to deter new fighting.

Kosovo, as you know, Mr. Chairman, a province of Serbia, has long been a flashpoint between the Serbian and Albanian communities in what is now the Federal Republic of Yugoslavia. For Serbs Kosovo is the birthplace of the Serbian nation and the location of many of the countries most famous and revered religious and historical sites. The source of tension is that over time Serb migration from the economically depressed province, combined with a high birth rate among the ethnic Albanian community, has resulted in the Serbs becoming a minority. They now account for less than 10 percent of the population of two million.

Despite these demographic pressures, tensions between the two communities were contained through the '70s and '80s. During this period Kosovo's Albanian majority enjoyed substantial autonomy and had representation in the main federal Yugoslav bodies. Kosovo also had its own constitution, provincial assembly, interior ministry, and wide administrative authority. This all changed in 1989 when Slobodan Milosevic, looking for an emotional and patriotic issue, issued to rally public support behind his bid for power, posed as the defender of Serb interests in Kosovo. He abrogated Kosovo's autonomy on the wildly exaggerated grounds that the shrinking Serb population was being discriminated against by the Albanian majority. In place of autonomy Milosevic imposed his version of apartheid, shutting down ethnic Albanian schools and local administrative bodies, and forcing ethnic Albanians out of government jobs and state-run businesses.

Ethnic Albanian leaders initially responded to this repression by organizing non-violent resistance in seeking to reach a compromise with Belgrade. These efforts, however, only resulted in more repression. By 1996, a loosely organized insurgency, the Kosovo Liberation Army had emerged dedicated to overthrowing Belgrade's rule by force. The KLA grew quickly, and was able last spring to mount low level attacks against Serb police forces and expand its presence throughout the province, even exercising effective control over some areas in central Kosovo.

Alarmed by the growing threat posed by the KLA, Belgrade launched a major counterinsurgency operation that lasted until late October. Serb security forces succeeded in pushing the KLA out of many areas, but they were unable to inflict a mortal wound. The KLA suffered relatively light casualties and its command structure remained largely intact. The Albanian civilian population was not so fortunate, bearing the brunt of the Serbs' scorched-earth campaign.

The agreements Belgrade signed last October stemmed the fighting only temporarily. The KLA used the cease-fire and the presence of international verifiers to reoccupy all the territory it lost last year, and it has kept up a continuous series of small scale attacks against Serb security forces. Belgrade for its part has failed to comply with many of the provisions of the October agreements, including those pertaining to troop withdrawals, maintaining considerably more police in Kosovo than permitted under the agreements reached with NATO. The large presence of the so-called special police, the most brutal of the Serb forces in Kosovo, has served as a lightning rod for KLA attacks.

Mr. Chairman, we believe that we are on the verge of a dramatic deterioration of the Kosovo crisis as the limitations of winter weather pass. The cease-fire negotiated last October is near collapse. The number of attacks by both sides is increasing as are the casualties. Both sides are now preparing for much heavier fighting in the spring. The KLA has used the cease-fire to improve its training and command and control, as well as to acquire more and better weapons. As a result, the KLA is a more formidable force than the Serbs faced last summer. We estimate that there are several thousand KLA regulars, augmented by thousands more irregulars or home guards. Moreover, funds pouring into the KLA coffers from the Albanian diaspora have increased sharply following the massacre at Racek.

We assess that if the fighting escalates in the spring as we expect it will be bloodier than last year's. Belgrade will seek to crush the KLA once and for all, while the insurgents will have the capability to inflict heavier casualties on Serb forces. Both sides will likely step up attacks on civilians. There is already evidence that KLA may be retaliating for the slaying of the Albanian civilians at the hands of Serb security forces by attacking Serb civilians. The recent attacks against Serb bars and restaurants in Pristina and Pec could be the beginning of a pattern of tit-for-tat retaliation that will grow more severe as fighting intensifies. Heavier fighting will also result in another humanitarian crisis, possibly greater in scale than last year's which created 250,000 refugees and internally displaced persons, along with hundreds of buildings destroyed and homes.

Mr. Chairman, that is the picture of Kosovo as I would paint it -- a little history, but it is important to understand how this has evolved.

SEN. WARNER: General?

STATEMENT OF

LIEUTENANT GENERAL PATRICK M. HUGHES,
Director, Defense Intelligence Agency

GEN.HUGHES: Sir, I'd like to associate myself with the director's comments. I think they are correct, and describe the situation there.

The bottom line is that if the warring parties are not in some way separated and controlled we all should expect increased conflict in the coming spring and summer months, and continued strife throughout the region of the Balkans that could indeed broaden out of the current crisis environment in Kosovo into the adjoining areas of Montenegro, more crisis and more conflict in Albania, and the potential for similar kind of events in Macedonia. So it's indeed a true crisis situation, one that needs attention. Thank you.

SEN. WARNER: I think we'll ask a question or two among our members on this before we go to the rest of the briefing. So I'll just take, say, three minutes and then each member likewise.

We have a number of U.S. citizens involved in Kosovo now. They're in the KDOM units, which I and other members of this committee have visited. They've been the monitors of the situation over there for some number of months. You have the OSCE group coming in. You have the NGOs. And there's a significant number of Americans in each of these units.

Two questions I have. I think we have an obligation to protect those people, particularly if we have to institute air strikes. As I said earlier, it's my judgment that only a ground force could hopefully provide a deterrence to further conflict between the KLA and other Albanian groups and the resident Serbian forces.

Also I feel that the instability in Kosovo could begin to destabilize, to the detriment of the accomplishments we've had thus far, in the Bosnia region and put our troops at greater risk. I'd appreciate your comments to both of those questions, Mr. Tenet. Or do you want to lead off, General?

GEN. HUGHES: Well, first, I think that you're correct that we have a general policy to protect human life and to protect certainly the life of American citizens. And in the Balkans, protecting life is quite often a function of some kind of security presence or force structure to assist in the preservation of civil control and to prevent acts of violence.

Whether or not a ground force should be put in place to do that in the context of --

SEN. WARNER: I can appreciate it's a political decision.

GEN. HUGHES: A political decision, that's right.

SEN. WARNER: It's not within your scope. But just from an analyst and a military person of great distinction, it seems to me --

GEN. HUGHES: From an analyst's -- yes, from an analyst's standpoint, sir, I would say that there needs to be some kind of a security force in Kosovo in order to stabilize the situation and protect human life.

MR. TENET: Mr. Chairman, I agree with General Hughes. I would only say it is a policy issue. I think a political settlement is an indispensable prerequisite before a ground force is put in. We have to have terms of an agreement so that the ground force understands what its mission is very, very clearly. We have two warring parties who still have an enormous amount of capability. But I think it is -- analytically, our judgment is it would be an indispensable component in trying to bring some solution here.

SEN. WARNER: Understood. Senator Levin.

SEN. LEVIN: When you say bring a solution, the first part of your sentence said, "after there's a solution or a partial solution." Is that correct?

MR. TENET: Yes, sir.

SEN. LEVIN: You made reference to the balance of forces there. Could you be a little more precise in terms of the balance of power between Serb forces and the KLA forces this spring? What do you expect would happen?

GEN. HUGHES: Well, the Serb forces, of course, are -- it depends on how you measure them, but the Serb forces resident in Kosovo are limited to a specific number and a specific quantity and type. Under the current agreements in force with regard to the presence of Serb (VJ?) -- that's the army or the military of Serbia -- the police forces are somewhat more robust.

Together, the combined Serb forces of army and police represent a much larger military capability with much more heavy weaponry than that possessed by the UCK or the other smaller groups of opposing forces who represent the Albanian Kosovars. And I believe that -- I can't characterize it in number, but let's just say that the Serbs have a much more significant military capability than the Albanian opponents do.

SEN. LEVIN: On a relative basis, would you say that relatively the Albanians are stronger this year than they were last year?

MR. TENET: Yes, Senator, we would.

SEN. LEVIN: They're in a relatively improved position militarily. Is that correct? MR. TENET: Yes.

SEN. LEVIN: You made reference to the massacre, where 38 Albanians were massacred last month. Ambassador Walker viewed the bodies of those who were slain and he blamed the Serbian security forces for the massacre. He said that some of the victims had been executed gangland style. Some had their eyes gouged out. There have been reports that Ambassador Walker may have intercepted radio communications that established that the Serbian forces were responsible for the massacre. Can you tell us anything about such radio intercepts? Do we have any independent evidence as to which particular unit might have been responsible?

MR. TENET: Senator, I'd be happy to talk about this in closed session. I'd rather not talk about it in open session.

SEN. LEVIN: All right. One last question for open session. This has to do with the question of public opinion inside of Serbia. Senator Reid (Reed?) and I were in Belgrade in January of 1997, and there was a large group of people demonstrating at that time against Milosevic and for a more democratic form of government. We have not seen much evidence of public demonstrations recently. Can you tell us, is there organized democratic opposition in Belgrade? And if not, how has Milosevic succeeded in stifling that opposition?

MR. TENET: Well, what he's done recently, as you know, Senator, is consolidate his control over the government. He dismissed the chief of the general staff. He dismissed the intelligence chief. He's put people around him who are more akin to his own views. Nevertheless, I don't see any galvanizing force outside of his government that has the capability to do something against him.

The other thing you need to understand is that Kosovo as an emotional issue for the Serb population is very, very high. Some polling that USIA has done indicates that 80 percent of the Serb population believes Kosovo should be held on to at all costs. He will play on those traditional nationalist sentiments in that regard unless he's faced with other consequences that he must judge in the context of a deteriorating economy. And while the people he's dismissed have not galvanized themselves into another force, he has to wonder about what that will all mean in the context of the Act Ord the threat he faces against NATO.

SEN. LEVIN: Does the holding on to Kosovo include denial of any autonomy to Kosovo? Is that --

MR. TENET: Independence is what the Serbs have opposed adamantly. I don't have any more precise handling on autonomy. But it's independence that they absolutely oppose. Now, therein lies the rub, because the UCK and the KLA, in essence, has held out for independence. So in between the autonomy and independence, we would hope some political solution could be fashioned to meet both objectives. SEN. WARNER: Thank you very much. Senator Sessions.

SEN. SESSIONS: Thank you, Mr. Chairman. I have been somewhat taken aback by the reports that I've read in newspapers that indicate we may be on the verge of committing one-third of 30,000 troops necessary to secure Kosovo. I feel like that's a matter of national commitment that the Congress has to be involved in, and a failure to do so would be a failure of our responsibility.

So I particularly was interested in your comments, Director Tenet, in your written remarks that throughout the region, political, economic and social progress is unsustainable without direct international involvement in virtually every aspect of policy formulation and resource allocation. The magnitude of the long-term implications of that statement concern me and I think are important to policymakers in the Congress.

Recent news articles talked about 40,000 to 50,000 troops. We've seen 9,000, 8,000 figure floated, 2,000 to 5,000 troops floated. Based on your intelligence assessment, is this kind of United States commitment necessary to achieve the goals that we would like to achieve in Kosovo?

MR. TENET: Well, Senator, first let me say you'll have the secretary of defense and the policymakers in front of you to sort of talk about their thinking. General Hughes and I are the wrong people to talk about what the size of an American contribution should be.

I would say to you that I think General Hughes and I would say that a ground force, a NATO ground force, is indispensable to a solution. How the United States participates, in what manner it participates, I'm sure that the administration will be talking to this committee and other members of Congress as time wears on. I'm sure they'll be doing that this week. They've already begun consulting, i believe.

SEN. SESSIONS: Well, it's a matter that I think we need to be talking with. Nobody's talked to me about it. They may have talked to some other members of Congress. It does seem that there is a real danger here. This is East, West, all kind of historical implications of importance. But it's also -- the Balkans are also known as the European back door, their backyard. Is it possible or would you comment on whether or not we would normally expect the Europeans, under these circumstances, to contribute more than the two-thirds NATO policies have normally contemplated?

MR. TENET: Senator, I don't want to be evasive, but I'm not involved in any of those discussions. I think the secretary will be more than willing and able to discuss that with you. I just have, you know, no affiliation with any of those discussions.

SEN. WARNER: Senator, if I might just interject. I've had the opportunity to consult with the secretary of defense and the secretary of state on a number of occasions in the past two weeks. It has been my hope this morning to include, as an opening in this hearing, representatives from the Department of State and Defense to address the policy questoins wihch are very important that you've asked. They respectfully requested that I defer that for a day or two.

But I assure you, this committee will explore these policy considerations with the appropriate witnesses within the next few days, in consultation with my colleague here from the -- you and I will talk about how we can structure those hearings. So we will have them. And I think the country, the United States, has shown leadership, has shown a recognition of the need for a ground element of U.S. forces within NATO. And again, it has to be in an environment where there's some measure of agreement for some type of cease-fire structure between all factions.

Senator Robb.

SEN. ROBB: Thank you, Mr. Chairman. I agree with that assessment. Let me ask a couple of quick questions that do go to the intelligence part of this equation. First of all, with respect to the differences between the UCK or KLA, as we prefer to refer to that organization here, and President Rugova and some of his forces, we have been concerned for some period of time that there was a pacifist element and anything but a pacifist element in terms of the breakdown between the two.

Are the differences, in your judgment -- and if we can't go into this in open session, I'll understand -- but are there differences that we can talk about in public between President Rugova and those that are loyal to him and the KLA and any of the leadership that we can identify?

GEN. HUGHES: We should provide that answer in closed session, sir.

SEN. ROBB: All right. How about with respect to the supplying of the KLA at this point? Is there anything on that matter that you can go into in open session?

GEN. HUGHES: No, sir.

SEN. ROBB: Okay. Let me ask you another question. How about the verifiers at OSCE? There have been various reports that this committee and others have received that the 2,000 number that was supposed to be achieved, I believe by the end of January, has not been achieved. We've talked a little bit about their vulnerability during this particular period. Could you describe, as best you can, the completeness of their deployment and the vulnerability that they have at this point in terms of any more assertive action by NATO or the United States?

GEN. HUGHES: Once again, sir, not wishing to appear or be evasive, but the OSCE, of course, is treated by us as a friendly organization. And in the context of the actions in Kosovo, we do not know, in an intelligence context, what it is they're doing or not doing. I think I can generally agree with you that they have not reached the 2,000-person limit they set for this period of time. They haven't yet achieved that presence in Kosovo. Beyond that, we'd like to defer any comments to closed session.

SEN. ROBB: Let me ask you one very general question, then, with respect to the ability of those who would currently oppose NATO or allied intervention to give -- and again, I'm not asking for specific figures, but some comparison between the situation that we encountered in Bosnia-Herzegovina when we made our initial determination to go in there. I'm thinking more in terms of a characterization of the types of everything from air defense to conventional military forces in training, an order of magnitude as to the difference that we would encounter if we were to pursue similar activity in Kosovo.

MR. TENET: Let me generally say that I think General Hughes and I would say that the situation in Kosovo is fraught with a bit more danger. In Bosnia we had a situation where all parties had exhausted themselves. That's not the situation you find yourself in today. So in terms of the environment that you're going to find yourself in, force protection issues are issues we're going to have to treat very, very carefully in that environment. It's in nobody's interest to have them exhaust themselves and see brutality and the kinds of killings that we think would only accelerate as time goes on with the kind of instability that it will perpetuate in the region.

But if we were going to compare apples to apples in a similar time period, you must be concerned about this environment, because people have a lot of arms, and there's a real threat out there and we'll have to be very careful -- which is why I come back to my original point, that a political settlement is an absolute -- or the preconditions of a political settlement is an absolute imperative to the introduction of forces on the ground.

SEN. ROBB: Understood, and I appreciate that point, and I'll -- General Hughes, did you want to comment on that?

LT. GEN. HUGHES: I'll just make one point. The geography alone of Kosovo, if you examine the map, tells you that you have a much different operating environment -- no access to the sea, as one example. And therefore conditions in Kosovo must be viewed differently from those that we encountered in Bosnia.

SEN. ROBB: I was hoping to elicit that general response, at least, so that we recognize that the situation on the ground that we confront is entirely different. My time is expired. I thank you, Mr. Chairman.

SEN. WARNER: Senator Lieberman.

SEN. LIEBERMAN: Thanks. Mr. Chairman. Thanks, Director Tenet and General Hughes. I was thinking as we were talking about this of the -- let me first thank Senator Warner for the statements he's been making on this difficult subject, which I think have been very much in the national interest. And the point that he's made that I think is important to stress is that we've made an investment, a substantial investment in arriving at peace and then keeping it in Bosnia. And in some sense, we ought to be involved as much as we are and maybe in the coming months in Kosovo to protect the investment that we've made in stability in the Balkans as a way of saying -- expressing what I believe is true, which is that stability in the Balkans is important to stability in Europe, is important to the security of the United States.

And for one, I feel strongly that if the efforts to bring the parties to (France ?) are successful and they can agree on Terms and it's in our national interests to be with our allies in NATO in the peacekeeping force -- although, I must say, I'm encouraged to hear that the talk is that the portion of American troops will be lower than it was at the outset in Bosnia. And if one of the conditions of that is for the Europeans to assume more responsibility, including command of those troops, I think we have to be prepared for that.

But I wanted to ask a different kind of question, which was -- if I can phrase it this way. History has put an awful lot of diplomatic/political kindling wood in the Balkans. But it takes somebody to light the match. And I think as we look at the recent history there, it's Mr. Milosevic who's lit the match. He did it in Bosnia and he did it here in Kosovo 10 years ago, when, under his leadership, the autonomy of the province was nullified. And what has followed is a systematic campaign which didn't come to real public attention until recent times, where the ethnic identity, the political rights, the civil rights of the Kosovar Albanians has been destroyed.

And my question is -- and in a way, I'm trying to ask you, Director Tenet, to go back and tell us a little more if you're able, a similar question to what Senator Levin raised. You know, leadership can be bad leadership and good leadership. I think Milosevic's leadership has been terrible for the Balkans and the region. And the question is, what is the hope of one, either new leadership -- different leadership -- in Belgrade; or two, of imposing as part of a peace settlement for Kosovo some demands for more political freedom within Belgrade? More freedom of the press, more freedom of -- more political freedom to try to create the conditions for a change in leadership there?

LT. GEN. HUGHES: Could you just state directly and in simple terms, sir, what it is you'd like to ask us? (Scattered laughter.)

SEN. LIEBERMAN: Is there some way we're going to get rid of Milosevic in the near future? (Laughter.) And if not, can we convince him -- because I think he's so much the source of the problem. Can we, as part of the negotiations going on now, convince him not only to begin to provide peace in Kosovo, but to offer more freedom to his own people in Belgrade?

LT. GEN. HUGHES: Senator, I don't speak for Mr. Tenet here, but I'll just say that in my case, while I might have personal and private opinions about that, it's inappropriate for me to express them here.

SEN. LIEBERMAN: Mr. Tenet.

MR. TENET: It works for me.

SEN. LIEBERMAN: That answer works for you too.

TENET: Yes, yes, it does. (Laughter.)

SEN. LIEBERMAN: (Laughs.) Oh, okay. do you want to -- this is my last question, Senator Sessions. How about just describing the state of political opposition to Milosevic? That's a more open question, I would think, within Belgrade.

LT. GEN. HUGHES: I think that we'd have to characterize the political opposition resident in Belgrade today as repressed, not obvious. There are really few manifestations of it. But I think we believe there is an undercurrent of perhaps not outright opposition, but some hope for change, some desire for greater political and general stability in the region by the people of Serbia. And I think that that could be translated into some opposition for some of the direction that the government has taken under Mr. Milosevic.

SEN. LIEBERMAN: Thanks very much. Thanks, Senator Sessions.

SEN. SESSIONS: Thank you. Senator Landrieu.

SEN. LANDRIEU: I have a statement for the record, but I have no comments or questions at this time. Thank you.

SEN. SESSIONS: Thank you. We'd be prepared to hear your opening statements.

MR. TENET: Thank you, Mr. Chairman. We've got a lot to say about --

SEN. SESSIONS: Excuse me, Mr. Secretary -- Director. Ms. Snowe just arrived. Would you like a minute before we start? Okay. Please go ahead.

MR. TENET: Thank you, Mr. Chairman. We'll try and get through a lot of things here as fast as we can. In my opening, I would say to you, Mr. Chairman, that U.S. citizens and interests are threatened in many arenas across a wide spectrum of issues. And no issue is more emblematic of these new challenges than the proliferation of weapons of mass destruction.

As you know, 1998 saw the nuclear tests in South Asia, continued concern about Iraq's weapons of mass destruction programs, accelerated missile development in Iran, North Korea, Pakistan and India, and the broader availability of BW- and CW- relevant technologies.

Particularly worrisome to the intelligence community is the security of Russian WMD materials, increased cooperation among rogue states, and more effective efforts by proliferants to conceal illicit activities. U.S. intelligence is increasing its emphasis and resources on many of these issues, but I must tell you that there is a continued and growing risk of surprise.

Looking at the supply side first, Russia and Chinese assistance to proliferant countries has merited particular attention for several years; this year, unfortunately, is no exception. I mentioned in my statement last year that Russia had just announced new controls on transfers of missile-related technology. There were some positive signs in Russia's performance early last year, but unfortunately, there has not been sustained improvement. Especially during the last six months, expertise and material from Russia has continued to assist the Iranian missile effort in areas ranging from training to testing to components. This assistance is continuing as we speak, and there is no doubt that it will play a crucial role in Iran's ability to develop more sophisticated and longer-range missiles.

Making matters worse, societal and economic stress in Russia seems likely to grow, raising even more concerns about the security of nuclear weapons and fissile material. Although we have not had recent reports of weapons-usable nuclear material missing in Russia, what we have noticed are reports of strikes, lax discipline and poor morale and criminal activity at nuclear facilities. For me, Mr. Chairman, these are alarm bells that warrant our closest attention and concern.

The China story is a mixed picture, Mr. Chairman. China's senior leaders are actively studying membership in the missile technology control regime and have pledged to prevent the export of materials or technology that could assist missile and nuclear programs in South Asia. Beijing has promulgated controls on dual- use nuclear technology and tightened chemical export controls.

We cannot yet assure you, however, that the new export control mechanisms will be effective. Both the Chinese government and Chinese firms have long-standing and deep relations with proliferant countries, and we are not convinced that China's companies fully share the commitments undertaken by senior Chinese leaders.

While all aspects of China's proliferation behavior bear continued watching, we see more signs of progress on nuclear matters than on missile assistance. Moreover, the restructuring of China's defense industrial bureaucracy, including entities charged with export oversight, holds the potential to create confusion and incentives that would impede the effectiveness of this system.

In short, Mr. Chairman, our guard remains up on this question.

There is little positive I can say, Mr. Chairman, about North Korea, the third major global proliferator whose incentive to engage in such behavior increases as its economy continues to decline. Missiles and WMD know-how are North Korean products for which there is a very real market. North Korea's sales of such products over the years have dramatically heightened the WMD threat in countries of key concern such as Iran and Pakistan. Meanwhile, countries such as India, Pakistan and Iran that traditionally have been seen as technology customers have now developed capabilities that they could export to others.

Looking at the demand side, Mr. Chairman, let's focus first on nuclear programs. Last spring dramatically made clear that both India and Pakistan are well-positioned to build significant nuclear arsenals. Meanwhile, Iran, too, seems to be pushing its program forward. With regard to North Korea, the agreed framework has frozen Pyongyang's ability to produce additional plutonium at Yongbyon, but we are deeply concerned that North Korea has a covert program. The key target for us to watch is the underground construction project at Kumchangni, which is large enough to house a plutonium production facility and perhaps a reprocessing plant as well.

The missile story is no more encouraging. Indeed, we expect a high level of launch activity in 1998 to continue in 1999. Last year's activity included the first launches of the North Korea Taipo Dong 1, the Pakistan Gori (ph), and the Iranian Shahab-3, the latter two based on North Korea's Nodong. With a range of 1300 kilometers, the Nodong, Shahab-3 and Gori (ph), significantly alter the military equations in their respective regions. Each is probably capable of delivering weapons of mass destruction.

In short, Mr. Chairman, theater-range missiles with increasing range pose an immediate and growing threat to U.S. interests, military forces and allies, and the threat is increasing. This threat is here and now.

More disturbing, Mr. Chairman, is that foreign missiles of increases range and military potential are under development. North Korea's three-stage Taepo Dong 1, launched last August, demonstrated technology that with resolution of some very important technical issues, would give North Korea the ability to deliver a very small payload to intercontinental ranges, including parts of the United States, although not very accurately. Pyongyang is also working on another missile, the Taepo Dong II. With two stages, the Taepo Dong II, which has not yet been flight- tested, would be able to deliver significantly larger payloads to mainland Alaska and the Hawaiian Islands and smaller payloads to other parts of the United States. In other words, the lighter the payload, the greater the range. With the third stage like the one demonstrated last August on the Taepo Dong I, this missile would be able to deliver large payloads to the rest of the United States.

The proliferation implications of these missiles are obviously significant. Foreign assistance is a fundamental factor behind the growth of the missile threat. For example, the foreign assistance helped Iran save years in its development of the Shahab-3 missile, which is based on the North Korean Nodong, and, as I noted earlier, includes substantial Russian assistance.

Moreover, Iran will continue to seek longer-range missiles and seek foreign assistance in their development. If Iran follows a development timeline similar to that demonstrated with the Shahab-3, which included significant foreign assistance, it would take Iran many years to develop a 9,000- to 10,000-kilometer range ICBM capable of reaching the United States. But Iran could significantly shorten the acquisition time and warning time by purchasing key components or entire systems for potential sellers as North Korea.

Iraqi capabilities to develop missiles also continues to be of concern. Iraq was ahead of Iran before the Gulf War. And if sanctions were lifted, we would have to assume that Iraq would seek longer-range missiles.

Against the backdrop of an increasing missile threat, Mr. Chairman, the proliferation of chemical and biological weapons takes on more alarming dimensions. At least 16 states, including those with missile programs mentioned earlier, currently have active CW programs and perhaps a dozen are pursuing offensive BW programs. And a number of those programs are run by countries with a history of sponsoring terrorism.

On terrorism, Mr. Chairman, I must be very frank with the committee in saying that Americans are increasingly the favored targets. U.S. citizens and facilities suffered more than 35 percent of the total number of international terrorist attacks in 1998. This is up from 30 percent in 1997, and 25 percent in 1996.

Looking out over the next year, Mr. Chairman, let me mention two very specific concerns. First, there is not th slightest doubt that Osama bin Laden, his worldwide allies, and his sympathizers are planning further attacks against us. Despite progress against his networks, bin Laden's organization has contacts virtually worldwide, including in the United States. And he has stated unequivocally that all Americans are targets.

Bin Laden's overreaching aim is to get the United States out of the Persian Gulf, but he will strike wherever in the world he thinks we are vulnerable. We are anticipating bombing attempts with conventional explosives, but his operatives are also capable of kidnappings and assassinations. We have noted recent activities similar to what occurred prior to the African embassy bombings, Mr. Chairman, and I must tell you that we are concerned that one or more of bin Laden's attacks could occur at any time.

SEN. WARNER: And on that point, Mr. Tenet, the administration recently announced a program for the threats here at home in the domestic USA. This committee will be looking into the recommendations which I hope will be forthcoming from the administration. I presume that you and your department worked on the formulation of that very important initiative by the administration?

MR. TENET: Yes, sir, we had input into it.

SEN. WARNER: And when you say strikes, those strikes could be at home as well as abroad?

MR. TENET: Yes, sir. One of my greatest concerns, Mr. Chairman, is the serious prospect that bin Laden or another terrorist might use chemical or biological weapons. Bin Laden's organization is just one of a dozen terrorist groups that have expressed an interest in or have sought chemical, biological, radiological or nuclear agents. Bin Laden for example has called on the acquisition of these weapons as, quote, "a religious duty," and noted that, quote, "how we use them is up to us."

Earlier I referred to state sponsorship of terrorism, so let me take this opportunity to say with respect to Iran that we have yet to see any significant reduction in Iran's support for terrorism. President Khatemi took office in August of 1997, but hard-liners such as the supreme leader continue to view terrorism as a legitimate tool of Iranian policy, and they still control the institutions that can implement it.

Mr. Chairman, my statement go in at length about counternarcotics and organized crime, which is important; the threat of the Y2K problem, which is also important; but I want to move on to some other areas, if that's --

SEN. WARNER: I think we should for a moment though talk about your assessment of the progress or the lack thereof that we are making in the narcotics.

MR. TENET: Well, sir, I --

SEN. WARNER: I think a very heavy commitment of U.S. resources and indeed U.S. military resources, general. Just give us sort of a summary on that.

MR. TENET: The threat remains significant despite many successes, particularly in the fight against cocaine, Mr. Chairman. The illicit narcotics trade adapts quickly to law enforcement pressures, new markets and shifting supply patterns. But three particular developments concern me.

First, there is good news and bad news on coca cultivation. In Peru, which has historically accounted for more than the Andean total, cultivation has declined by more than half over the past three years. Cultivation in Bolivia, historically the second largest coca producer, has also dropped substantially. The bad news, however, is that these declines are largely offset by significant increases in coca cultivation and production in Colombia, much of which is in high risk, insurgent-controlled territory, making Colombia's eradication efforts more difficult. To President Pastrana's credit, and he is waging a very serious fight in this, he is trying to engage the insurgents in talks intended partly to seek their help in eradication efforts -- the first time a Colombian president has taken such a bold and risky step.

Second, Mr. Chairman, drug shipments are increasing over land through Central America to Mexico and from there across the Southwest border into the United States.

Finally, Mr. Chairman, opium production, the source of all refined heroin, has ballooned in Afghanistan. This country now accounts for almost 40 percent of the potential worldwide opium production, and may be approaching Burma as the top heroin exporter in the world. It's a very difficult and moving picture, Mr. Chairman. Every time you make progress you lose yardage someplace else and there is no shortage of effort on our part or the law enforcement community part to break the hold of these cartels and their trafficking networks, but it's a tough problem.

With regard to the Y2K problem, Mr. Chairman, I think a few words are in order. In our judgment foreign countries trail --

SEN. WARNER: Particularly on the ability of nations now to technologically intercept our systems, whether it's a local bank or indeed the Department of Defense.

MR. TENET: It's a serious issue, Mr. Chairman, we should talk about in closed session more than in open session.

In our judgment, with regard to Y2K, foreign countries trail the United States in addressing Y2K problems by at least several months, and in many cases much longer. The lowest level of Y2K preparedness is evident in Eastern Europe, Russia, Latin America, the Middle East, Africa, and several Asian countries, including China. Y2K remediation is underfunded in most countries.

These uneven efforts account for several potential threats to our interests. Global linkages to telecommunications, financial systems, air transportation, manufacturing supply chain, oil supplies and trade mean that Y2K problems will not be isolated to individual countries and no country will be immune from failures in these sectors. There is a potential for civil unrest in some countries, particularly if critical service sectors are disrupted for extended periods.

Energy flows could be interrupted in some countries. Europe for example gets more than one third of its natural gas from Russia, and could be affected if Gazprom has Y2K problems. Some military activities, including those of our allies, depend on secure and uninterrupted flow of digital information, making overall readiness a potential casualty of Y2K.

Mr. Chairman, I want to talk a bit about Russia and China to you. Let me start with Russia. Last year I reported to you that my view that Russia's future direction, whether it develops as a stable democracy, reverts to autocratic and expansionist impulses of its past or degenerates in stability remained an open question. My concerns about Russia's direction are greater today than they were a year ago, largely because Russia's deteriorating economy elevates the uncertainty quotient in a number of very important areas.

Just one year ago Russia had its problems, but it had a basic sense of direction, and seemed to be moving forward, however fitfully. Now, however, Prime Minister Primakov is struggling with mammoth problems. To his credit, he has built a good relationship with the legislature and gained passage of some long overdue legislation. But the nation is heading into a political transition, facing difficult economic choices and possibly entering a period in which it debates its future political direction. This is playing out against continuing instances of lawlessness and a growing public sentiment for a stronger hand at the helm. This could be a dangerous path for a country with Russia's authoritarian history, even though Russia has now held successful elections and adopted a Constitution.

The sense of drift is accentuated by the focus most political leaders already have on the December 1999 Duma elections and the June 2000 presidential election. Very few are disposed to take bold steps or new initiatives that might risk additional public pain right now.

Meanwhile President Yeltsin's health problems limit his involvement in decision making and place on Prime Minister Primakov much of the responsibility for the day-to-day management of the country.

As the government ponders how to proceed, the economic indicators grow more worrisome. Russian consumers have been hit hard by inflation. Prices have shot up 90 percent since July. Imports of consumer goods have now fallen sharply. Unemployment has inched up to nearly 12 percent, and is spreading to the emerging middle class. And the economy will probably contract by 6 to 8 percent this year.

This changed political dynamic and economic slide highlights the foundation of my increased concern. Politically Russia is increasingly unpredictable, and the worsening economic situation affects all aspects of the Russian scene as the desperate search for revenue streams is exacerbating a number of very serious problems. For example, it has magnified the proliferation threat across the board as growing financial pressures raise incentives to transfer sensitive technologies, especially to Iran.

With regard to China, Mr. Chairman, my concerns bear some resemblance to those about Russia, but in China's case the trajectory is clearly different. China is a great power on the rise, diplomatically, militarily and economically. There is no doubt that China has the potential to affect our security posture in Asia, but the extent to which its ambitions and growing capabilities represent a challenge or threat to U.S. interests is still an open question.

The Chinese have signalled in summit meetings and elsewhere that they want constructive bilateral relations. But at the same time they remain fundamentally suspicious of U.S. intentions toward China, and like Russia seek to constrain any increase in U.S. global influence.

Meanwhile, China's military modernization program continues apace despite slowing economic growth. The Chinese program is assisted by sustained levels of defense spending and the availability of weapons and technologies from the former Soviet bloc. Its focus is on air, naval and strategic nuclear modernization.

China is increasing the size and survivability of its retaliatory nuclear force, even though it is unlikely to make the resource commitment needed to approach the force levels either of the United States or Russia.

China is also developing and acquiring air and naval systems intended to deter the United States from involvement in Taiwan, and to extend China's fighting capability beyond its coastline. Although China does not want a conflict over Taiwan, it refuses to renounce the use of force as an option and continues to place its best new military equipment opposite the island.

China's future is also uncertain because of its pressing domestic challenges. On the economic side, China's major concern this year will be sustaining economic growth, which officially reached almost 8 percent last year. China has not been immune from the global financial crisis, and much slower growth this year would threaten labor peace and increase pressure to devalue the currency, a step that would fuel a new round of financial turmoil in Asia.

These economic uncertainties have heightened China's fear of civil strife, and the recent arrests of several pro-democracy dissidents leave no doubt that China's leaders are determined to sustain the Communist Party's monopoly on political power.

Mr. Chairman, I go on about Iraq, which we could talk about, but I would like to talk about North Korea more specifically. As dangerous as Saddam is, Mr. Chairman, I can hardly overstate my concern about North Korea. In nearly all respects the situation there has become more volatile and unpredictable. The regime is still struggling with serious food shortages, last year's grain harvest having been more than one million tons short of the minimum grain needs. Very few heavy industrial plants are in operation. Living conditions for most North Koreans are miserable. Incredibly this misery coexists with a robust weapons of mass destruction program I mentioned a few minutes ago.

Fresh signs of social decay have increased our concern about stability in North Korea. Crime and indiscipline are commonplace, even in the military and security services. Citizens from all walks of life, including members of elite groups, are more apt to blame Kim Jong Il for systemic problems, including poor living conditions. All of this will encourage the North to rely still more heavily on risky brinkmanship in its dealing with the United States. Pyongyang has a history of precipitating crises that it thought it could control to increase U.S. engagement in bilateral issues. A key area where this will play out in the coming year is U.S. efforts to inspect the underground construction project at Kumchangni, which may be intended to house a nuclear facility.

The key point, Mr. Chairman, is that North Korea remains a serious military threat despite dire economic conditions. In addition to the WMD capabilities I mentioned earlier, Pyongyang continues to devote considerable resource to its mainline military which can still initiate full-scale war on the peninsula and inflict massive damage on South Korea and the 37,000 American troops deployed there.

Finally, Mr. Chairman, I want to talk about Iran for a few moments. Last year I described Iran as still a dangerous state in which some positive changes were taking places -- changes that could -- and stress "could" -- lead to a less confrontational stance with the United States.

Iran has had a tumultuous year, and my sense is that it is more likely to face serious unrest in 1999 than at any time since the revolution 20 years ago. The situation is very fluid, and the more moderate elements represented by Iran's President Khatemi are on the defense to a greater degree than ever before in their struggle with the country's conservatives. Some of President Khatemi's domestic reforms have come under intense attack by conservatives. And the current jump in political violence, including the recent murders of several dissidents, suggests that some conservative elements have decided to revert to force to impose their will.

Khatemi now has an opportunity to use the investigation into these murders, in which hard-line elements appear implicated, to put his opponents on the defensive. He needs to regain the momentum he demonstrated in his first few months to make concrete gains against conservatives. He could do so by using the investigation to push for change into the MOIS, his intelligence service, and combined with a large turn-out in nationwide elections later this month could reaffirm his popular mandate to push for reform.

But his efforts will play out against a background of severe economic stress in Iran, largely the result of the slump in global oil prices. This is making it harder for Khatemi to deliver on his reform promises, with high unemployment also contributing to the potential for civil unrest in the country.

Finally, Mr. Chairman, we need to bear one thing very soberly in mind: that reformists and conservatives agree on at least one thing, weapons of mass destruction are a necessary component and therefore get a high degree of priority. Thus, as I stated earlier, we need to be vigilant against the possibility of proliferation surprise.

I'll stop there, Mr. Chairman. There's more to say, but I have taken too much of your time.

SEN. WARNER: No, we've taken too little in many respects. We'll turn to you momentarily, general. But as I look back, Director Tenet, you and I have been associated now for almost a decade, beginning with our work on the Intelligence Committee when the demise of the Soviet Union -- and later I became the deputy of the joint chairmen on that committee. So we have shared a lot.

Just give me your overview of when we worked together 10 years ago in terms of the overall threats against the United States at the close of the Cold War in comparison to what you feel the magnitude of those threats are today.

MR. TENET: Well, in a sense, I think, Mr. Chairman, we see the past and the future colliding at the same time. The difference here is the enormous implications of the flow of technology to many more countries. While the homeland of the United States is not as threatened as it once was because of a massive Soviet arsenal, I would say to you that American interests are being pushed all over the world in a way that I think is quite unprecedented; small actors with access to technology, organized criminals, terrorists, narco-traffickers, and the fact that there are no more unsophisticated adversaries. Everybody has sophisticated communication. People know how to deceive and deny information. Alliances are very, very fluid.

In many ways, the cause for engagement and the cause for a robust intelligence capability, a robust diplomatic and military capability, have never been greater than they are today. And the world we're looking at, I think, will pose for our children challenges that we have not yet conceived, and technology will be at the root of it all.

And the proliferation of these weapons, I believe, will be the single greatest threat, because this proliferation intersects with terrorists. It intersects with organized crime in a way that nation- states will find it very difficult to combat. So I think that's the kind of world we're looking toward, a world that is far less predictable than we once thought, where our leadership is still required, where our resources are strapped and when we need to do more to protect American interests.

SEN. WARNER: I thank you. And if we're looking here 10 years from today, it'll even be more complex.

MR. TENET: I think it will, sir.

SEN. WARNER: General Hughes.

GEN. HUGHES: Mr. Chairman, members of the committee, I'm pleased to once again have the opportunity to provide my views on the global threats and challenges confronting our nation over the next two decades. My remarks today touch on more detailed testimony which I have provided for the record.

As we have witnessed during the past year, with the continuing proliferation of weapons of mass destruction, highlighted by the nuclear detonations in India and Pakistan, heightened tensions along the line of control in Kashmir, disorder in Indonesia, terrorist bombings of our embassies in Kenya and Tanzania, North Korean and Iranian progress on developing longer-range missiles, intense ethnic conflict, particularly in the Balkans and Central Africa, international and internal uncertainty and economic crisis in Russia, the devastating impact of Hurricane Mitch in Central America, narcotics trafficking and its corrosive effects on governance in Colombia and surrounding countries, Iraq's continued belligerence and growing concern about the direction North Korea is taking, all of that tells us that the international security environment remains volatile, complex and very difficult. I expect this general global turmoil to continue and perhaps worsen at least through the next decade, because the underlying causes -- political, economic, social, technological and demographic -- remain largely in place.

We should, therefore, anticipate a very dynamic environment in which threats, challenges and opportunities coexist, intertwine and evolve, seemingly at random. I am particularly concerned that the simultaneous occurrence of many lesser crises will result in a net effect that could defuse our focus, dissipate our power and resources, cause us to be reactive, and ultimately undermine our ability to shape the future.

Against this backdrop of change, I see several themes that will define the nature of the military threats and challenges we are likely to encounter. Over the next 10 years, no global military challenger on the scale of the former Soviet Union is likely to emerge. However, the U.S. will continue to be confronted with a host of lesser dangers, regional, transnational, asymmetric and asynchronous.

These include increased numbers of people in need, the continued existence of various rogue, renegade and outlaw individuals, subnational groups and states, terrorism, drug trafficking and other transnational crimes, the malevolent use of technology and attendant proliferation, the rise of alliances and coalitions with opposing interests, and numerous other critical uncertainties.

Collectively, these and other challenges represent a formidable barrier to the emergence of a stable, secure and prosperous international order and a substantial impediment to our strategic vision. They will continue to absorb a great deal of the U.S. military's time, energy and resources.

At the higher end of the spectrum, the United States will continue to face a strategic nuclear threat from Russia, China and perhaps other less dependable nations. Indeed, the proliferation of weapons-of-mass-destruction technologies and missiles constitutes the single greatest threat to U.S. vital national interests.

The number of Russian strategic nuclear warheads will continue to decline, but Moscow will retain a potent strategic arsenal and will increasingly rely on strategic forces to offset its diminished conventional military capability. China will modernize and expand its relatively small and dated strategic deterrent force, and the number of Chinese warheads capable of hitting the United States will increase.

Though less certain, I am very concerned that adversaries like North Korea and Iran will develop and field nuclear-armed missiles with intercontinental range. This more diverse and complex strategic nuclear threat affects post-Cold War thinking about nuclear deterrence, strike-and-response policy, force posture and strategic targeting.

The threat posed by regional weapons of mass destruction, already the greatest threat to deployed U.S. forces worldwide, will increase. Over the next 10 years, several states will likely join the nuclear club. Chemical and biological weapons will be widely proliferated. And the numbers of medium-range theater ballistic and cruise missiles will increase significantly, particularly in the Middle East. This dynamic has the potential to fundamentally alter theater force balances, the nature of regional conflict and U.S. contingency planning and execution.

We also can expect key regional powers, China and perhaps Russia at the high end, but also an unimpeded Iraq, Iran, India, Pakistan and North Korea, to field conventional military forces that are large and well-equipped, even by today's standards.

The degree to which these primarily Industrial Age forces can acquire and apply selected high-end capabilities, weapons of mass destruction, missiles, satellite reconnaissance, global positioning, precision strike, advanced radar and so forth, remain to be seen. But under certain conditions, hybrid militaries, combining the quantity, mass and fire power of 20th century force with selected 21st century technologies and concepts, will pose a significant threat to U.S. mission success, particularly in the period beyond 2010.

Finally, the emergence of a new multi-polar-threat paradigm and related changes in the nature of warfare itself underpin all of the foregoing trends and are having a profound impact on U.S. military missions, strategy, organization, planning, operations and force development. It is difficult to predict how these trends will play out over the next two decades. That uncertainty creates an extremely challenging planning environment for U.S. policymakers and force planners.

One of the most important challenges facing the U.S. intelligence community is to discern from the general global condition a more specific characterization of emerging threats. This characterization must be detailed and timely enough for our political and military leaders to prevent, deter or prepare for those threats before they become reality and to fight and win against our enemies if that becomes necessary.

We in the defense intelligence community remain committed to providing the best possible military intelligence support to our leaders and in support of the soldiers, sailors, airmen, Marines, Coast Guardsmen and civilian members of our military. One final thought. We live and work in an era where access to information is ubiquitous and where public media coverage of military operations is more pervasive and aggressive than ever before. These conditions have combined to challenge our traditional concepts of operational security and secrecy. In many instances, the provision of military information to the public domain is expected. In some cases, information is published without official approval or clearance.

This condition has both positive and negative effect. Much more information is now available to the public, but some information endangers military plans and intentions and puts military operations and personnel at risk. The overall result has been the compromise of intelligence and operational data obtained at great cost to the American taxpayer in the public domain, and coincidentally to our enemies and adversaries.

In some cases, we have lost the element of surprise. We have lost the initiative and we have endangered or lost sources of information that are important windows into what our opponents are doing. I do not have a clear solution to recommend but feel it is my duty as a military officer who is entrusted to secure such information to bring this to your attention as a matter of great concern.

Mr. Chairman, that concludes my statement. Thank you very much.

SEN. WARNER: Thank you very much, General. We'll proceed now to a round of questions of six minutes for each senator.

I want to return to the situation in Kosovo. Again, I think the administration, together with our allies, are doing the best they can to bring the parties together. There's to be a meeting somewhere in France of the principals of all sides. To what extent is that coming together? And most particularly, are we able to identify the leaders in the Albanian contingent to this meeting? Mr. Tenet?

MR. TENET: Mr. Chairman, my understanding is that Mr. Rugova, one of the Albanian leaders, has indicated a positive --

SEN. WARNER: Yes, I've met with him. I'm sure you have also.

MR. TENET: Mr. Milosevic has indicated he's still studying the issue. The UCK -- the KLA is thinking about what its position will be. I have nothing more definitive this morning. There may be some --

SEN. WARNER: Well, of course, you know Rugova represents the more moderate faction within the Albanian population. What about the more -- should we say the ones allied with the KLA?

MR. TENET: They have yet to take a position on whether they're going to show up for negotiations.

SEN. WARNER: Going to show up.

MR. TENET: Yes, sir.

SEN. WARNER: General, do you have anything further to add on that?

GEN. HUGHES: That's a correct answer.

SEN. WARNER: Much discussion of recent -- and this committee had a very good hearing the other day on Iraq, trying to get an appraisal of the factions outside of Iraq and their ability to be partners, so to speak, in the new goal of regime change. What comments can you give us about your own appraisal of the outside factions, their viability, their willingness to accept assistance, financial and otherwise, from the western world in a combined effort by many parties to work for a regime change?

MR. TENET: Well, Mr. Chairman, I don't think the director of Central Intelligence should talk about that in open session.

SEN. WARNER: All right.

MR. TENET: I'd be happy to give you my very candid and direct assessment of that in closed session.

SEN. WARNER: When we go into closed. Of recent, the administration -- and I commend the secretary of defense for his efforts -- has come to the recognition about the ballistic missile threat to the United States such that he is including in the president's budget submission, which has now come to the Congress, certain components which begin to clarify exactly the administration's position as it relates to this nation's initiative to try and devise a ballistic missile defense system, which, in sharp contrast to the concepts that we followed under the Reagan administration, is directed towards those few missiles that could be accidentally or intentionally released by terrorists or other groups.

What comments do you have on that and the ability of this country, hopefully, to renegotiate the treaty that is critical to allowing the full potential of American technology to be brought to bear on this, the ABM Treaty?

MR. TENET: Senator, I'm not competent to make judgments about what's being pursued. I think what General Hughes and I tried to do in our statements was be very careful about portraying what we believe to be a growing threat. We've said -- I said quite emphatically that the theater threat is here and now. I talked about North Korean developments, and we in our report to you in this spring, and with the help of the Rumsfeld Commission and new methodologies, I think we'll see a -- we're looking at this problem because we think we have to be very careful about it. But the flow of technology, foreign assistance, the application and transition from space-launched vehicles to ICBMs -- there are lots of developments out there that have forced us to rethink this threat. All we can say to you is that proliferation of this technology is a very serious issue for us. The policy choices you make, the technologies you buy, the implications of what you do with the ABM Treaty, are serious policy matters. General Hughes and I will try and keep the threat --

SEN. WARNER: Let me go back to your statement. You said that "certainly the theater threat is here." Now, we saw that during the Gulf War.

MR. TENET: Yes, sir.

SEN. WARNER: But the point is we now recognize the growing capabilities of North Korea. That brings in not a theater but an intercontinental threat.

MR. TENET: Yes, sir.

SEN. WARNER: So I think -- would your response be to both theater and intercontinental?

MR. TENET: Well, the theater threat is here and now with a diversity that is quite threatening. The ICBM threat, the North Korean developments, the interaction among rogue states, the very active actions that countries are seeking to acquire longer-range ballistic missiles tell us that this is a threat that will be increasingly more difficult to warn against in the conventional timelines that we once did. And that's the kind of message we want to leave you with.

SEN. WARNER: General Hughes, the president announced as a part of his counterterrorism initiative that he's considering the appointment of a single military commander as his anti-terrorism commander-in-chief. I don't have all the details, but initially I'm inclined to support a study of this concept and see whether or not we can have a meeting of the minds between the administration and Congress. Do you have any comments on that?

LT. GEN. HUGHES: No, I don't have any comments on that, sir.

SEN. WARNER: All right, thank you. Senator Levin.

SEN. LEVIN: Thank you, Mr. Chairman. First relative to Kosovo, I just want to add one further thought. There I think is some concern and some mixed feelings on the question of U.S. participation in a ground force in Kosovo, even if there is some kind of an interim peace agreement. I happen to be one who would favor our participation -- for instance, under the right circumstances following such a Dayton- like agreement in Kosovo. There are some who I thin would perhaps not support such participation.

But two things are clear to me. One is that the Europeans are finally leading, and we ought to be thankful that they are. And I think there's sometimes some ambivalence that is directed towards Europe in terms of their leadership -- and I'm not talking about ambivalence from you two -- but ambivalence that sometimes comes from this country about whether or not we want them to actually lead such a force if in fact one is put together by NATO.

And it seems to me if we want the Europeans finally to do more in their own area, which they should have been doing all along, we have got to be positive and supportive and grateful that they finally are taking a leadership role. I'm glad that that conference on Kosovo is being held in France, and not in the United States. The symbolism of that, that it's in Europe and not here, it seems to me is important symbolism. I am all for it.

I want the Europeans to lead. I'm glad they are. And if a NATO force is put together after some kind of an interim Dayton- like agreement is reached, I would hope that we would participate, but that we would not in any way suggest that we are reluctant to have that NATO leadership be European NATO leadership instead of us, in terms of the direct command of that force.

So, I just want to kind of add that one element to our thinking on it. That doesn't mean there's agreement on a lot of aspects of this policy, I don't think there are, in terms of even American participation in such a force, although I do support participation of the United States in a junior partner role in such a force, as a much smaller share than has previously been the case.

SEN. WARNER: Senator, you still would have the Supreme Allied Commander, General (Kopp ?).

SEN. LEVIN: Of course.

SEN. WARNER: And it would be another nation over the immediate force.

SEN. LEVIN: Of course. That's why I said "direct command." Now, on the threats that we face. You have given us a very eloquent statement of the growing nature of terrorist threats, particularly in possession of weapons of mass destruction. We are facing -- we already do face -- a theater missile threat and we are facing a growing threat, in terms of long-range missiles. We are seeing that, and there's much evidence of that, and you have identified some of that this morning.

It would be very helpful for us if you could assess the likelihood of these various threats being actually used against Americans and American interests, actually being implemented.

Now, you may or may not be able to do that right now for us. But it is very important that we get a flavor on a scale of one to 10: is it an "8" that a terrorist will poison a water system with a chemical in the United States, compared to a "2" that we're going to face a missile coming in from some rogue nation? Or is that the opposite?

Now, it's a difficult thing to do, but it's a very important thing for us to do. You've been extremely -- I think very impressive this morning, in your description of the growth of those terrorist threats, and that's where I happen to feel the greatest real threats lie. And although the long-distance missile threat is a growing one, in my judgment -- not as an expert -- in my judgment, the likelihood that we will face a terrorist threat with a weapon of mass destruction domestically is far greater than that we're going to get a missile coming from North Korea, although that is a growing possibility.

For the record, would you two give us your likelihood assessment relative to these threats? Give us the range of threats and the likelihoods that we would actually see one of those threats carried out and implemented.

The next question relates to testimony on page 24 of your prepared statement. And that is that in North Korea, we see evidence of crime and indiscipline in the military and security services. This is right in the middle of that page. And citizens from all walks of life in North Korea, including members of elite groups, are more apt to blame Kim Jong for the problems, including poor living conditions. And I think it's a very significant statement that I hope we don't overlook.

Like many of my colleagues, I've been to North Korea and I've seen the totalitarian nature of that regime, and the small opportunity anybody would have for any kind of dissent or complaint. I'd be interested as the source -- and not the source in your technical sense, but what do you base that statement on -- and you've now made it public -- that crime and indiscipline are commonplace in the military and security services in North Korea and that citizens, including members of elite groups, are more apt to blame their leader for the systemic problems?

LT. GEN. HUGHES: We do have a variety of information reports coming from sources, both classified and official sources and from travelers and from people who are resident in North Korea who are able to observe the ambient circumstances there, which do indicate to us this growing instance or circumstance where indiscipline is seen on the street. An example might be a soldier's out of uniform and in disarray acting in a way that was not seen before. Another example might be public marketplaces in which governmental control over the public commerce does not seem to be as ubiquitous and as pervasive as it once was. Other examples from intelligence reporting might indicate some kind of indiscipline problem or disruption in the normal course of a military unit's activities, indicating a problem of command-and- control inside the unit.

And finally, I think we have seen some indications throughout the country of distribution problems, especially with food and other resources which are in part needed by the public which are denied from the public by the government, or by the military or by some official concern. And that's another example of the kind of problem we see where people need things they can't get from the government and so they act out their frustrations. And we get reports about that.

SEN. LEVIN: Thank you. My time is up. I would just close with the request -- this is very briefly. That threat spectrum which we just discussed and the likelihood of those threats actually being faced here -- would you be able do you think to give us that within 30 days?

MR. TENET: Yes.

SEN. LEVIN: Thank you. Thank you.

SEN. WARNER: I think probably much of that would be in classified form, would it not be, Mr. Levin?

SEN. LEVIN: Well, I'd like it in both classified and unclassified form.

MR. TENET: Well, why don't we try and classify it first. We'll do our best -- we'll do our best in both forms.

SEN. LEVIN: No, I think it would be most valuable in unclassified form if you can give it to us in general terms in unclassified form. But whatever you can give us in unclassified will be appreciated.

SEN. WARNER: Thank you very much, Mr. Levin. Mr. Roberts, you have just joined us here. You haven't had an opportunity as yet, and you're the new chairman of the "Emerging Threats" subcommittee.

SEN. PAT ROBERTS (R-KS): Thank you, Mr. Chairman. That was a very appropriate segue. I can't think of a better stage-setter, if you will, for the work of the subcommittee and what we're going to tackle this year, and I can assure the distinguished Senator from Michigan that his question pretty well summarized -- or his request has pretty well summarized what we think the priority consideration is in regards to the subcommittee. This has been a very sobering look at the threat environment that we face in the United States. And I'm just going to read a couple of paragraphs here from my opening statement if I might, Mr. Chairman.

The gravity of those threats and the sheer number of possible scenarios that could strike at our vital national interests -- pardon me -- certainly demonstrates the importance of the understanding of the threats and to prioritize them. And that goes to the heart of Senator Levin's requests. And then looking at our capabilities against them.

So the challenge becomes one of understanding which threat poses the most serious danger to the nation, and then ensuring the various government agencies are working together to reduce the threat to a minimum. I would like to report to the full committee and the chairman that we have already met with Mr. Dick Clark of the National Security Council. And I found it most helpful to determine there are at least 13 federal agencies involved in this mission. And also General Boyd, the retired Air Force general who is in charge of the Boren-Rudman Commission, made up of 30 national leaders.

So we have enough task forces and commissions and subcommittees and committees and your expertise to take a good hard look at this. And I will report to the full committee. We expect to hold a hearing later as of this month, and a series of about six hearings to do this kind of a job. So, with your help, we'll be able to start the process of paring the list, if I could use that term.

Now both of you have listed many threats or potential threats. And my question is how would you prioritize those threats, based on our vital national interests? Now, this is the same thing that Senator Levin has asked, and I know you're going to provide the full committee this information. But let me just give you where I'm headed.

Now George, you in your statement listed a great number of threats, and I found it very interesting and the same thing is true in regards to General Hughes' testimony. If you start off -- I don't know whether you did this in regards to priority to vital national interests, but it's interesting to me that the threat of the weapons of mass destruction was obviously first and the threat in the Balkans was number 10 out of 10.

Now we have had a great deal of conversation this morning and interest in regards to Kosovo. And I know that in that part of the world in the Balkans that our total expenditures over a several- year period are -- what? Ten, 12, maybe 14, 15, billion dollars? Seven thousand troops to participate, and the 28,000 that may be involved. I don't know about our intelligence capability there, or the climate there in regards to force protection, but it seems to me that that particular issue is really dominating not only the intelligence community to a certain extent, but certainly the national news and certainly our commitment. And I'm a little concerned. I know that our peacekeeping responsibilities are very serious there, and the Dayton Accords, and what can happen in that area and the future of NATO -- all of these things are important. But you've sort of rated it, you know, 10 out of 10. Am I being a little bit -- what? -- unfair here, or would you care to comment?

MR. TENET: Yes. I think that when we put this together, we initially were going to have an opening session devoted to Kosovo, with policy witnesses. That's going to happen in another forum. So I must tell you that in putting this together until midnight last night, we were trying to figure out how to address it, not necessarily in the sequence.

But if I would characterize this for you from an intelligence perspective, it will be -- Bosnia and Kosovo will be at the top of our surge efforts, something we have an immediate responsibility to put at our highest priority. But when you look at Iran and terrorism and proliferation, these are enduring threats where we get no relief in our performance, things the country will face for the next 10 or 15 years. And where we surge in any two- or three- year cycle is going to change over the course of time.

So I do look at them somewhat differently. But the immediacy, whenever U.S. forces are put on the ground, it is my first priority, of necessity, to ensure that the force protection issues are paramount in their consideration, so no man or woman in uniform is jeopardized in the conduct of their mission because of bad intelligence. That will be our number one priority.

But when you asked me to do these priorities, I must tell you that I don't have a lot of relief. The nuance between ballistic missile, terrorism, narcotics, what the Iranians, the Indians and Pakistanis are capable of is minute in terms of threat to vital American interests.

These are areas that I have to perform against with an equal degree of sophistication, because you would expect no less.

So while in Washington, senator, we often get the cottage industry of the month, and everybody -- it's like the three-year-old soccer game -- everybody runs to the ball -- I don't have that luxury. I have to treat all of these things almost equally. And it's stressing in terms of people and investment and resources. And so the divergence -- whatever delta exists here is very small, because when that next terrorist event occurs, by God, the whole country will be up telling me it's the most important threat. And the next time North Koreans flight-test a ballistic missile, by God, it will be the most important thing you miss, Mr. Director, if you missed it. So I have to make -- I treat these very, very closely and equally in my priorities. And Kosovo will rise immediately, to get to your question -- and I didn't mean to slight it in testimony preparation, but you know how those things get at the eleventh hour sometimes.

SEN. ROBERTS: I'm glad I asked that question so you could get it off your chest. (Laughter.) I think --

MR. TENET: I did, sir. Thanks -- (laughter) --

SEN. ROBERTS: Sort of a sensitivity session here.

Well, obviously force protection is numero uno where we have our American men and women in uniform. And I am concerned, Mr. Chairman -- I think I'd echo the concern of Senator Sessions. I wasn't here, but I understand he said that you better have a settlement first before we send anybody in there to keep the alleged peace. But I think we're spoon-feeding the settlement, and it's a lot like when I tried to spoon-feed my kids. And we're also having a forced invitation. And I'm a little concerned about the intelligence climate with regards to force protection down the road. If we would -- if NATO would make the decision to go ahead and bomb, I'm not sure in the end result we don't get the law of unintended effects. And we can deal with that in regards to closed session.

Mr. Chairman, my time has expired, so I would like to come back with an additional question down the road.

SEN. WARNER: Senator Sessions.

SEN. SESSIONS: Thank you, Mr. Chairman. I'd like to ask a few brief questions with regard to narcotics. I was involved as a federal prosecutor in the Gulf Coast for a number of years. It strikes me that what I hear now about the potential to reduce the production of coca and other products is the same thing I was hearing in the early 1980s. There's always some positive report, but fundamentally the supply appears to be there always to meet the demand within the United States. Would you have any comment that our best way to reduce the drug use in the United States is to reduce demand in the United States? And isn't it basically a hopeless game to attempt to reduce our drug use by stopping nations from producing these products?

MR. TENET: Sir, I think of course the demand side is critical. General Hughes and I normally don't comment on that, but I will say to you that I don't think it's hopeless. I think that you -- we make progress against these organizations -- we not only go after their crops, we go after their infrastructure, their finances, how they transport things. And host nation support and will to do those things has made a difference in some places. Now, it seems like a losing battle, and on most days it is for the money involved and the sophistication of these organizations, and often the unevenness with which host governments attack the problem. But we have -- our law enforcement and intelligence communities I guess would say we can't get off the playing field, because the consequences of getting off that playing field, and not trying to make life as miserable as we can for drug traffickers is not a situation I think we'd want to be in. But this is tough business, and the corruption piece of it makes it a lot tougher. And you know that. And there is no easy fix here. And of course if the demand side went away we'd be a lot better off immediately.

SEN. SESSIONS: Well, I think you just said it correctly, there is no easy fix. If you drive the price up by getting a lot of nations to reduce supply, the price will be so attractive that others will get into it. It's just I'm not sure we're going to be able to solve our drug problem by blaming it on Colombia. I've been at it a long time, and I'd rather see our focus on open-air drug markets in United States cities and things of that nature.

General Hughes --

MR. TENET: Senator, I'd say that we wouldn't blame it on -- certainly I would say that the Pastrana government is trying to engage us every way they know how, and doing some courageous things. I don't blame it on any one government. This is a sophisticated, multi -- you know -- conglomerate business operation that doesn't have any regard for the sanctity of anybody's borders. But you know that.

SEN. SESSIONS: Well, I agree with that. And Colombian leaders have shown extraordinary courage, and many of them are in the grave today because of it, in trying to resist this. And none of us in this nation have had to face that kind of threat.

General Hughes, with regard to your concerns about public -- or nonconfidentiality and secrecy within the United States, how would you compare our problem with confidentiality and secrecy with that of other democracies? Are we more open, and does it jeopardize our intelligence community more than we ought to? And can we make some progress in providing our intelligence agencies more confidentiality and protection?

GEN. HUGHES: I don't think I'm qualified to make a comparison with other democracies, but I would like to comment on the problem or the issue. As I see it we have a set of laws and rules and regulations that are put in place to protect the idea that some information should be restricted from the public domain -- for good reason -- and that is not being honored as far as I can tell.

U.S. classified information is routinely appearing in the public media, and it's appearing in some cases ahead of or in advance of events, so that it has a very deleterious effect. I am concerned about that from the standpoint of not only operating forces and costs to them, but also to the -- I don't know, the confidence that we can have in our system of protecting real secrets in our open society.

SEN. SESSIONS: This would be in violation of existing law?

GEN. HUGHES: Yes. And somehow my view is we have to find the right balance. I think we may have had it at one time, but we seem now to have erred on the side of making so much information available that some of it has been damaging to our governmental collective effort.

MR. TENET: Senator, if I could just add to that, I think that our government is hemorrhaging in a way that I have never seen in my lifetime, and the implications for the nation's security are profound. And I would tell you that unless some discipline is restored in this system -- openness is something we believe in -- we are here today, we want to talk to the American people about what we believe. But it is not anybody's inalienable right to share secret information. And while people go after it, and people in the press are printing things, they are not the problem. The problem are the people who believe they derive some power from leaking classified information. And as a member of the executive branch I will say that the executive branch is probably responsible for 80 percent of what appears. People just have lost their sense of discipline, and at the end of the day we will lose our ability to serve you because of that lack of discipline.

SEN. SESSIONS: Is that the responsibility of the FBI normally to investigate those?

MR. TENET: Yes, sir, and the director of the FBI and I work very hard at this, and it will only take one time to catch somebody to send the right kind of message. But it is a very difficult problem for us. We live with it in the newspapers everyday, and it makes my job and Pat Hughes's job very difficult.

SEN. WARNER: A very profound statement, Mr. Director.

Senator Landrieu.

SEN. LANDRIEU: Thank you. Mr. Chairman, thank you for the presentations this morning, both of you, director and general. And just two questions. You outlined pretty clearly and convincingly about the new emerging and numerous threats that we face, quite different perhaps than the last 20 years, and talked about the reasons for that. My question would be how does our proposed budget for your operations either enable you or prohibit you from doing the kind of job that you feel like you need to do?

MR. TENET: Senator, I would say that we are making progress in that regard. We had a very large infusion of money last year from the Congress. It was very, very helpful to us. I would say as we come up and make our budget submissions this year that we have -- over the long term we have to sit down and have a major look at how much money the country is willing to spend on intelligence. There are glaring needs of the Defense Department and in the intelligence community and at the State Department -- all the tools that the president has available for national security. I believe we need to carefully look at whether we're spending enough. We can do what we have been asked to do, but the recapitalization requirements we have, the added investments we are trying to make and sustain in signals intelligence, in human intelligence, and greater analytical depth, will require a sustained commitment of resources to assure that I can deliver the intelligence that you think the country deserves over the course of time.

And this is a debate that often occurs in one-year chunks. That's one of my big problems. We talk about these things a year at a time, and I need to be able to talk about significant programs over four and five years to tell you that I can sustain a level of investment that I think we need. And I think we need to look at how we budget, and we need to think about what the long-term needs are.

General Hughes and I will tell you that we can deliver what we have been asked to do, but we are under more stress than we have ever been as an intelligence community. And we are operating in an environment of massive technological change that jeopardizes our ability to do our job. And our investment profile has to be looked at very, very carefully, and we do that -- we are beginning to do that more carefully. So I think we have got a lot of work to do here. I'm not sticking my hand out for money here today, but as we go forward in our budget deliberations I would ask this committee, who is enormously sensitive to our needs, to look at the defense and intelligence investments as synergistic as how we help the Defense Department do its job -- not as a either-or proposition. And I think too often we fall into that trap, Mr. Chairman. We take money away from the Defense Department, give it to the intelligence community and all the constituents get very upset. That's not the way we look at it. I view the Defense Department's health and welfare as primary to securing this country. But I think that we add an enormous amount of value to what the secretary and the chairmen try to do.

SEN. WARNER: Two words: force multiplier. MR. TENET: Yes, sir.

SEN. WARNER: Go ahead, senator.

SEN. LANDRIEU: My second question is, general, you mentioned I believe the situation in Central America, in Honduras with Hurricane Mitch. I've been down there to visit. There will be other trips going down, and many of us are taking the opportunity to go and see so that we can help.

You mentioned it -- do you have any indication that the democracy that is emerging there has been negatively affected to a point where we should be worried? And, if so, would you want to comment? Because I know the damage has been quite significant, and there's a tremendous amount of suffering going on there.

GEN. HUGHES: Right now I would say that we have not detected a political change in the region because of the natural disaster. But rather we do need to assist those countries in maintaining internal stability, in rebuilding their infrastructure, and ensuring the conditions there are as good as we can help to make them so that they can continue the emerging democracy and change in governance that you do see there.

I would say that so far out of that disaster my view is that the governments in that region have handled themselves very well, and that we should see great hope in their responsible response to the people of the region and to the conditions that they have to live through.

I do think we need to keep our eye on the region and continue to assist in any way that we can.

SEN. LANDRIEU: Thank you. Thank you, Mr. Chairman.

SEN. WARNER: If you'd like to take another minute or two --

SEN. LANDRIEU: I'm fine. Those are the only two I had.

SEN. WARNER: Well, senator, on behalf of this committee and indeed the Senate, I wish to commend you for your work and travels in connection with Hurricane Mitch. A great many members of the Armed Forces -- U.S. and other countries, primarily U.S. -- are involved in that humanitarian relief program. And it brings into sharper focus the fact that I think in considerable measure that the future will require more participation by members of the U.S. armed forces in these disasters, particularly when they occur in this hemisphere.

SEN. LANDRIEU: Mr. Chairman, I think this statistic is correct, but just to give those who may now know -- when Hurricane Andrew hit the United States it was a .04 percent impact on our GNP in terms of the amount of disaster that was rendered by that blow. For Honduras the estimate is 40 percent of their GNP, which just puts into perspective how huge this storm and this natural disaster was. Even in Louisiana we have seen storms, but this one was quite extraordinary. And it hit a country that was just sort of emerging and coming out, and it could really be a tremendous setback. So I appreciate the military's efforts to look at it in our long-range interests, and to work with you, Mr. Chairman. Perhaps there's some ways that we could think of -- you know, cost effective ways that we could help in these situations, because it is clearly in our interests for this region to continue this progress towards democracy in many, many ways, and it's right in our back door -- they're neighbors and friends -- and so everything we can do we should try.

SEN. WARNER: Well, one thing comes to mind, senator, and you'd be very helpful in this -- is whether or not we should institute some formal training in our various syllabus throughout, from boot camp up, as to whether or not we should focus on what a young service person from this country --

SEN. LANDRIEU: It's a good opportunity for training.

SEN. WARNER: Correct.

SEN. LANDRIEU: And I think the National Guards have been using it in that way. And perhaps there are other ways it could be of mutual benefit for both sides. So I look forward to working with you on that.

SEN. WARNER: Thank you, Senator. One more question, and then I'll -- why don't I turn to you, and then I'll follow up and wrap up.

SEN. SESSIONS: Thank you, Mr. Chairman. I just had one question to follow up, Mr. Tenet, on your remarks. You've listed a sobering range of threats, discreet, individual type threats to the United States. And what I hear you saying is that we need to strengthen our intelligence community in some ways more today, because of that broad range in unconnected threats, than maybe we were in the past. Did I hear you say that?

MR. TENET: Well, you'll always hear me be an unabashed advocate for doing just that, sir. I think that the range of places that we're asked to operate, the range of places where our interests are at stake, will demand a higher-quality intelligence than you've ever expected in your lifetime. And the country has to be prepared to understand that an investment is required to make sure the United States is ahead of the game. And we've begun that investment, but I would ask that we pay careful attention to how we sustain it over the course of time to ensure that we can deliver the information that you and the president need to make these judgments consistently.

There are others out there who will try to deny us this information, conceal it from us. And the kind of operational tempo that the military and the intelligence communities have undertaken in recent years have us often focused on the here and now when we have other longer-term requirements that we also have to pay attention to.

So operational focus is important, and what you're doing in your in box today is important. But the strategic threats that the country faces are equally important, and it's my job to balance that. This committee has always been very helpful and very good to us in that regard. And I hope that when we have our budget deliberations, we can talk about these issues at greater depth.

SEN. SESSIONS: Thank you.

SEN. WARNER: We will do that. Through the years I've taken a personal interest in this committee in our oversight responsibilities. And the allocation of the most significant part of the intelligence budget is under the purview of the Senate Armed Services Committee.

I want to wrap up. In looking through my notes, you covered an awful lot of material, Mr. Director. But I guess it was your little story about the three-year-old at the soccer game. We tend to forget about Iran and the fact that Iran is always in direct competition with Iraq. And to some extent the stability in the Gulf region is dependent on the coexistence of these two states and not allowing either to become preeminent.

We have -- that is, the world -- been, I think, discouraged by the ability of any moderate voices to survive for any particular time. There was a period here a year or so ago where there was some indication there was hope between the balance between moderate and the more hard-line voices. The moderates are rapidly disappearing. And then the weapons of mass destruction; they have been hell-bent on their own programs for many years. And I wonder if you'd sort of give us a wrap-up on Iran.

MR. TENET: Mr. Chairman, I think it would be, at any point in time, one side or the other may appear to be winning. I think it would not be correct to say that this has been decided in Iran. I think you have to remember that there was a very large plebiscite for Khatami that reflects an undercurrent of a desire for change.

Now, at any moment in time, one side or the other may be winning. I think the thing that concerns me is while we watch that, we also have to be very cognizant of the fact that there's been no change in Iranian-sponsored terrorism. And irrespective of whether the moderates --

SEN. WARNER: No change, in other words, at the same very high level --

MR. TENET: Yes, sir.

SEN. WARNER: -- (support?) financially and otherwise.

MR. TENET: And at the same time, we need to understand, as I said in my statement, that whether moderates or conservatives win, the power that derives from weapons of mass destruction has been something the Iranians have sought, going back to the time of the shah. Their national interest is served by this. There may not be much in the way of change. What we want and hope for is a government that will integrate itself into our relationships better and understand that the confluence of weapons of mass destruction and terrorist activities are things that are really inimical not just to the regional interest but to ours in terms of moderating behavior either towards those issues or the peace process.

These are very, very serious issues. So at any moment in time this may shift. I think this is a story that will evolve over the course of time and bears watching on our part. I don't think there's much we can do about it or should do about it. I think these are very serious internal issues. But there is something there in the plebiscite that elected Khatami that cannot be ignored.

SEN. WARNER: But then, again, to the weapons-of-mass-destruction program, the level of effort. Do you see any change?

MR. TENET: No, sir. I think this is very, very serious on the missile front, on all fronts. We can talk about it more in closed session, but no diminution in activity. With regard to those behavioral patterns that concern us the most, (they) have not fundamentally changed.

SEN. WARNER: General, do you have anything you wish to add?

GEN. HUGHES: No. I don't want to add anything to what Mr. Tenet has said, but I'd like to give you one view on Iran. For some years now, they have deliberately and consistently sought to acquire and perhaps even to develop on their own a military capability far in excess of what they need for defensive purposes. And some of the goals they have, some of the weapon systems they seek, clearly have offensive implications, especially in their region.

I think we have to view Iran not only from a defensive standpoint with regard to the protection of their own people and their own territory, but whether or not they can use the weapon systems and the capabilities they have now and are building to interact with their near neighbors and to become more active in the region in military terms.

And once again, I wish to characterize Iran as not an immediate problem but a long-term problem which has grown over time and continues to grow directly, in our view. And I'm not sure what to tell you about that except that we're alerting you to this growing potential threat from this country.

SEN. WARNER: Thank you very much. The committee will now recess for a period of 10 minutes and return to a closed session in the Intelligence Committee hearing room.