Senate Intelligence Committee Hearing: National Security Threats to the United States

February 16, 2005

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SEN. ROBERTS(R-KS): (Sounds gavel.) The committee will come to order. Today the Senate Committee on Intelligence meets in open session to conduct its annual worldwide threat hearing. I would like to inform members that traditionally we have a closed hearing in the afternoon, but Secretary of State Rice is coming to the Senate to brief all members this afternoon. We will follow up with individuals at our weekly intelligence hearings, and then obviously a hearing or a briefing at any member's request. So we will see all of these people back again in a classified session at another time.

The committee traditionally begins its annual oversight of the U.S. intelligence community with an open hearing so that the public will have the benefit of the intelligence community's best assessment of the current and projected national security threats to the United States. Our witnesses today are: Mr. Porter Goss, the director of central intelligence -- welcome back, Mr. Director.

MR. GOSS: Thank you, Mr. Chairman.

SEN. ROBERTS: Mr. Robert Mueller, the director of the Federal Bureau of Investigation. Admiral James Loy, the deputy secretary of the Department of Homeland Security. Vice Admiral Lowell Jacoby, the director of the Defense Intelligence Agency. And Ms. Carol Rodley, the principal deputy assistant secretary of State for intelligence and research. The acronym for that by the way is INR.

The committee thanks all of our distinguished witnesses for being here today. We thank you for your commitment, for your perseverance on your job, and for helping to keep America safe.

Before we begin the testimony, I would like to take this opportunity to discuss an issue that has concern and frustrated me since I joined this committee over eight years ago, and all members of this committee from time to time. While we meet today in open session, the members of this committee and our witnesses will be limited in what they can say, because the vast majority of the information with which this committee and our witnesses deal is classified. The issues which we cover are not necessarily secret, but the details that surround them generally are. Our goal today is to have as an open discussion as possible, recognizing that there are simply some things that we cannot and must not discuss publicly. The dynamics surrounding what we can and cannot say represents one of the most frustrating aspects of membership on this committee, especially when secret intelligence activities find their way into public discourse.

How do we as a committee assure the American people that we are even aware of something when we cannot discuss it publicly? How without confirming or denying a particular story do we explain that concerns are misplaced, on point or off point? Where do we draw the line between the public's right to know and our nation's security interest in keeping something secret? These remain very difficult questions.

In 1976, the U.S. Senate established this committee to conduct vigorous oversight of the intelligence activities of the United States government. And that is exactly what we do day in and day out, with I might add what the vice chairman and I consider to be an outstanding and most capable staff. Unfortunately, but necessarily, the members of this committee are rarely at liberty to respond to public stories or to inquiries. This does not mean, however, that we are not aware of or deeply involved in the issue that is being discussed.

Much of the Senate or this committee's work gets done behind closed doors with little fanfare. And open public discussion about all of the issues on which our committee works is just not possible. If we were to discuss some of the ingenious ways this nation does collect intelligence and protects our citizens, our adversaries would and could develop simple countermeasures that would eliminate these advantages which were developed at great cost or high risk. This secrecy does protect lives and helps us to keep safe.

The vice chairman and I will however continue to work together to keep the American people as informed as possible. And, when we can, we will do our best to clarify any misconceptions that may exist. With that in mind, I will now briefly discuss some of our plans for this committee's oversight in the coming months.

First, we look forward to the naming of a director of national intelligence. As soon as the president nominates this individual, we will schedule a confirmation hearing as soon as practicable.

Second, we will monitor closely the implementation of the intelligence reform bill. We will focus a great deal of attention on how this committee can support the new DNI in the exercise of his or her authorities. And because no legislation is perfect, we will also look at whether any legislative fixes are necessary.

Third, in the area of oversight we will focus on the intelligence community's collection and analytical capabilities, especially in regard to our capabilities. Do we have the adequate collection? Do we have the adequate analysis? Do we have the information access to make a consensus threat analysis that is both credible and helpful to the policymakers and the Congress?

This committee learned from our Iraq WMD inquiry that we cannot and should not always take the intelligence community's assessments at face value. The vice chairman and I have therefore decided the way the Senate Intelligence Committee does our work. We haven't launched anything. We haven't really begun an investigation or an inquiry; nor have we ruled them out. We have simply adjusted our approach based on the lessons we learned while reviewing the assessment by the community on Iraq's WMD programs.

Applying the methodologies that we used in that review, we will now look deeper into the intelligence community's work on the very critical threats that face our nation. Instead of examining these issues after the fact, as we did on the Iraq WMD question and many other matters in the past, we are going to be more proactive to try to identify our strengths and our weaknesses ahead of time. We have already begun to examine our intelligence capabilities with respect to nuclear terrorism and also the country of Iran.

In closing, I want to say something about the limitations of intelligence. Even the best intelligence will not be absolutely precise and tell us what to do. However, intelligence is a necessary and crucial tool used by policymakers to make very difficult decisions that does -- or that do directly affect those who defend our freedoms and our national security.

With that said, I look forward to the testimony of our witnesses, and also the questions by our members. I now turn to the distinguished vice chairman for any comment he may wish to take. Senator Rockefeller.


A Senator from West Virginia and
Vice Chairman, Senate Select Intelligence Committee

SEN. JAY ROCKEFELLER (D-WV): Thank you, Mr. Chairman. It's customary at the beginning of our hearings to welcome everybody, and I certainly do so, and very much look forward to your testimony. I have to say though I think there is a significant absence or an empty spot at the table, at the witness table, and I want to talk about that. There should be another chair before us, and the little sign in front of it should read "director of national intelligence," DNI. Last summer the Congress made reforming the intelligence community a top legislative priority. We worked through our August recess. We came back in a lame-duck session after the election and we eventually passed landmark legislation fundamentally reforming the intelligence community for the first time in 50 years. The Congress made this extraordinary effort because of a belief that our nation was at risk and we take that seriously.

More specifically, the Congress, eventually joined by the president, understood that without one individual in charge of the 15- agency intelligence community, America's war on terrorism would continue to be hampered by bureaucratic infighting and by budgetary tugs of war. That in turn inhibits the sharing of information, or as we like to say the access to information, and limit our ability to bring all of our resources to bear on what is a fairly ghastly threat on a worldwide basis.

When the president signed the intelligence reform bill in December, I really expected that when this hearing came that the new director of national intelligence would be here to talk about threats. It took three months for the Senate and the House to pass separate intelligence bills -- it's not really very much time -- and then resolve a multitude of differences in conference, all kinds of back and forth, in a way in which it was agreeable to the administration.

Two months have now passed since the bill signing ceremony, and the position of the director of national intelligence remains vacant, not even a person nominated. To me this is unacceptable. It's unacceptable because the administration has not shown the same urgency in dealing a DNI with that question that the Congress took trouble to create. Some agree, some don't agree with the decision, but it was not a particularly close vote in either here or the House.

With absolutely no respect -- in fact, a great deal of respect to Director Goss or any of our other witnesses, it is unacceptable that we cannot hear form and question the one person under the new law that is supposed to be responsible for the overall management of how the intelligence community is responding to the national security threats that we will be discussing this morning.

There are other troubling consequences to the administration's lack of action. In recent weeks, I visited most of the principal agencies that comprise our intelligence community. The message I heard over and over -- through words or body language -- was that the senior leadership at these agencies was that acting on how best to carry out some key provisions on the intelligence reform bill was being held up, pending the arrival of the new director of national intelligence. The delay in appointing a DNI has kept implementation of the reform bill therefore in my judgment in idle.

So what are the practical consequences of this delay in the context of today's threat hearing? I'll highlight three. The first and most obvious is the delaying -- that delaying the appointment of the DNI places that individual at a growing disadvantage in establishing his or her team, the new directorate, and selecting his or her supporting team of deputies within the six months proscribed by law, two months already having gone by, or more, proscribed by law, as to have it done.

The second consequence of delay pertains to the intelligence community's counterterrorism program. In addition to establishing the position of DNI, the intelligence reform bill mandated the creation of the National Counterterrorism Center, or NCTC. Initially created by executive order, the NCTC is chartered to be the primary organization in the U.S. government responsible for analyzing and integrating all intelligence pertaining to terrorism and counterterrorism. As is the case with the DNI, the head of the NCTC is a Senate-confirmed position, and the administration has yet to nominate a person to carry out those crucial -- one could say one has to do the DNI before the NCTC, but let's get going.

One of the primary missions of the NCTC -- and I'm reading the law now -- is to "conduct strategic operational planning for counterterrorism activities, integrating all instruments of national power, including diplomatic, financial, military intelligence activities, as well as homeland security and law enforcement activities, and to assign roles and responsibilities as part of its strategic operational planning. My understanding is that the operational planning mission at NCTC is not being undertaken pending confirmation of the new DNI. We can discuss that.

So when we talk about going after terrorists, after their organizations where they plot and where they train and where they keep their money, the question is who's carrying out this strategic operational planning mission on this day. In the wake of our war against the al Qaeda terrorist network and its operational bases in Afghanistan and Pakistan, the fundamentalist Islamic terrorist threat has splintered and decentralized its operations. We need a person in charge. We need an organization in place that can coordinate counterterrorist operations across agencies against this multiplying terrorist threat.

The third immediate consequence of not having a DNI in place is the area of proliferation of weapons of mass destruction. The proliferation activity of North Korea and Iran, along with the damage done by Pakistani scientist A.Q. Khan, has reduced any confidence that the nuclear genie is contained. The combination of these two threats, a decentralized but determined terrorist threat and growing proliferation activity, present the intelligence community with a sobering challenge now and for the foreseeable future. The Congress recognized the importance of this challenge in crafting the intelligence reform bill, by authorizing the establishment of the National Counter-Proliferation Center. The new intelligence center would generally follow the blueprint of the National Counterterrorism Center, again I am told and troubled by the fact that the decision on whether or not to establish the National Counter-Proliferation Center, and if so in what form, is being held up pending the DNI's appointment. The proliferation activities of North Korea are a threat to our security and the security of our allies today, as well as down the road, and the same of course is true with Iran, and we discover others as we go along. Iran is a nuclear aspirant and supporter of terrorism, is also center stage and very much needs to be pursued in this manner.

The policymakers, and most importantly the president, but also the Congress, need the best intelligence possible on North Korea, Iran, and other hot spots around the world -- Africa being one in which I may ask a question about. The faulty intelligence used by the administration to invade Iraq has harmed our credibility with our allies, and has given Islamic jihadists a powerful recruiting tool around the world that is not to anybody's advantage. We must learn from these mistakes, as the chairman has indicated, and get better in how we produce timely, objective and accurate intelligence for U.S. policymakers.

The chairman and I have directed that the Intelligence Committee undertake review of how intelligence on Iran is collected, analyzed and produced. The review will be similar to what we did before with weapons of mass destruction in Iraq, but it's going to be very proactive. The same sort of rigorous oversight ought to apply to North Korea also, and there's some other countries that come to mind.

I'm hopeful that the committee can also focus the efforts of its very talented staff on the growing controversy surrounding the collection of intelligence through the interrogation and rendition of detainees. We need to probe the fundamental legal, jurisdictional and operational questions, both retrospectively and prospectively in my mind, at the heart of how the intelligence community collects such intelligence. It's undeniable that the intelligence community has made enormous strides in the past three years and some reform has occurred. The tireless efforts of hard-working men and women at the CIA, FBI and other intelligence agencies like the work of those in uniform, have been a linchpin in the effort to protect every American against the murderous intentions of terrorists. But there is an acknowledgement among the people I have spoken with that we can do better and that we must get better. The intelligence reform bill addressed that issue of authorities, resources and organization. But the promise of reform will not be realized without strong leadership and management acumen, the sort of skills the DNI must bring to the table.

Challenges abound, as the chairman knows, for the current and future leadership of the intelligence community. There's a lot of work to be done on how we collect intelligence, particularly in the arena of human intelligence, analytical work force problems, language problems. Our intelligence community needs to establish a global presence that is not only capable but light, for our adversaries are increasingly mobile and use much more sophisticated technology as they do their work.

I know we're limited as to what we can discuss in an open hearing, but I hope to the extent possible that our witnesses will address some of the questions that I have raised. I thank the witnesses, and I thank you, Mr. Chairman.

SEN. ROBERTS: Before I recognize Director Goss, I would like to speak to the vice chairman's comments in regards to the appointment of a DNI. I think this is what we used to hear on Perry Mason was extenuating circumstances. The intelligence reform bill was passed on December 17. The bill says that a DNI will be appointed no later than six months -- that is, June 17th. I think -- or at least it is my opinion -- that the administration is also awaiting the report of the independent WMD commission, part of whose job or task is to take a look at the intelligence reform bill and make some recommendations. In addition, while I share the vice chairman's frustration that we wish we had here the director of central intelligence and that he or she was well down the road to implementing the reform bill, it is I think crucially important, not only in terms of timing, but to get the right person, and that person should have managerial experience, obviously expertise in intelligence, obviously expertise and experience perhaps in the military. As the vice chairman has pointed out, we have certainly people in the Washington area, or for that matter within the United States that certainly fit that description. So I hope that the administration will move in an expeditious fashion, but in a fashion that gets the right person for the job.

Director Goss, you may proceed, sir.



Director, Central Intelligence Agency

MR. GOSS: Thank you very much, Mr. Chairman. Good morning, Mr. Vice Chairman and members of the committee, and thank you for the hospitable welcome here. The challenges that you've mentioned in your opening remarks that place the United States of America and our citizens and our interests literally do span the globe. My intention today is to tell you what I believe are those challenges in terms of their most threatening, and identify briefly where we think our service as intelligence professionals is needed most on behalf of United States taxpayers.

We need to make some tough decisions about which haystacks deserve to be scrutinized for the needles that can hurt us most. We know in this information age that there are literally endless haystacks everywhere. There's an awful lot of material out there.

I do want to make several things clear. Our officers are taking risks, and I will be asking them to take more risks -- justifiable risks, because I would be much happier here explaining why we did something than why we did nothing. I'm asking for more competitive analysis, more co-location of analysts and collectors -- in fact, that's under way -- and deeper collaboration with agencies throughout the intelligence community. Above all, our analysts must be objective. Our credibility rests there, as you pointed out well in this committee's report to the community issued on the WMD.

We do not make policy. We do not wage war. I am emphatic about that. I testified to that during my confirmation, and it is still true and it will always be. We do collect and analyze information.

With respect to the CIA, I want to tell you that my first few months as director have served only to confirm what I and I think members of Congress have known about the CIA for years: it is a special place. It's an organization of dedicated, patriotic people who are doing their best. In addition to take a thorough, hard look at our own capabilities, we're working to define CIA's place in the restructured intelligence community, a community that will be led by a new DNI, as we've heard, to make the maximum possible contribution to American security at home and abroad that uniquely the CIA can make. The CIA is and will remain the flagship agency in my view, and each of the other 14 elements in the community will continue to make their unique contributions as well. I say that as the DCI, not as the director of Central Intelligence Agency.

I turn to threats. I will not attempt obviously to cover everything that could go wrong in the year ahead. We must and do concentrate our efforts, experience and expertise on the challenges that are most pressing. And they are of course defeating terrorism, protecting the homeland, stopping proliferation of weapons of mass destruction and drugs; fostering stability, freedom and peace in the most troubled regions of the world.

My comments today will focus on these duties. I know well from my 30 years in public service that you and your colleagues have an important responsibility with these open sessions to get information to the American people, as the chairman has stated. I also know too well, as the chairman has stated, that as we are broadcasting to America enemies are also tuning in. In open session I feel that I will and must be very prudent in my remarks as DCI.

Mr. Chairman, on the subject of terrorism, defeating terrorism must remain one of our intelligence community's core objectives, and it will, as widely dispersed terrorist networks will present one of the most serious challenges to the U.S. national security interests at home and abroad in the coming year. That's not startling news, but it's important.

In the past year, aggressive measures by our intelligence, law enforcement, defense and homeland security communities, along with our key international partners, have in fact dealt serious blows to al Qaeda and other terrorists and individuals.

Despite these successes, however, the terrorist threats to the U.S. and the homeland and abroad endures. I'd make four points.

Al Qaeda is intent on finding ways to circumvent security enhancements to strike Americans in the homeland, one.

Two, it may be only a matter of time before al Qaeda or another group attempts to use chemical, biological, radiological, or nuclear weapons. We must focus on that.

Third, al Qaeda is only one facet of the threat from a broader Sunni jihadist movement.

And, fourth, the Iraq conflict, while not a cause of extremism, has become a cause for extremists.

We know from experience that al Qaeda is a patient, persistent, imaginative, adaptive and dangerous opponent. But it is vulnerable -- (audio break) -- . We and other allies have hit it hard. Jihadist religious leaders preach millennial aberrational visions of a fight for Islam's survival. Sometimes they argue that the struggle justifies the indiscriminate killing of civilians, even with chemical, biological, radiological and nuclear weapons. Unfortunately, they have a small -- (audio break) --

Our pursuit of al Qaeda and its most senior leaders, including bin Laden and his deputy Ayman al-Zawahiri, is intense. However, their capture alone would not be enough to eliminate the terrorist threat to the U.S. homeland or interests overseas. Often influenced by al Qaeda's ideology, members of a broader movement have an ability to plan and conduct operations. We saw this last March in the railway attacks in Madrid conduct by local Sunni extremists. Other regional groups connected to al Qaeda or acting on their own also continue to pose a significant threat.

In Pakistan,terrorist elements remain committed to attacking U.S. targets. In Saudi Arabia, remnants of the Saudi al Qaeda network continue to attack U.S. interests in the region.

In Central Asia, the Islamic Jihad Group, a splinter group of the Islamic movement of Uzbekistan, has come a more virulent threat to U.S. interests and local governments there. Last spring the group used female operatives in a series of bombings in Uzbekistan, as you know.

In Southeast Asia, the Jemaah Islamiyah continues to pose a threat to U.S. and Western interests in Indonesia and the Philippines, where JI, the Abu Sayyaf Group and possibly -- (audio break) -- group as well.

In Europe, Islamic extremists continue to plan and cause attacks against U.S. and local interests, some that may cause significant casualties.

In 2004 British authorities dismantled an al Qaeda cell -- much reported. And in another incident, extremists brutally killed a prominent Dutch citizen -- not as widely reported.

Islamic extremists are exploiting the Iraqi conflict to recruit new anti-U.S. jihadists. These jihadists who survive will leave Iraq experienced in and focused on acts of urban terrorism. They represent a potential pool of contacts to build transnational terrorist cells, groups and networks in Saudi Arabia, Jordan and other countries.

Zarqawi has sought to bring about the final victory of Islam over the West, in his version of it. And he hopes to establish a safe haven in Iraq from which his group could operate against the, quote, "infidel" Western nations, the "apostate" Muslim governments.

Other terrorist groups spanning the globe also pose persistent and serious threats to US and Western interests.

Hezbollah's main focus remains Israel, but it could conduct lethal attacks against U.S. interests quickly upon a decision to do so. It has that capability, we estimate.

Palestinian terrorist organizations have apparently refrained from directly targeting U.S. or Western interests in their opposition to mideast peace initiatives, but pose an ongoing risk to U.S. citizens that could be killed or wounded in attacks intended to strike Israeli interests.

Extremist groups in Latin America are still a concern, with the FARC -- the Revolutionary Armed Forces of Colombia -- possessing capability and clear intent to threaten U.S. interests in that region.

The Horn of Africa, the Sahel, the Mahgreb, the Levant, and the Gulf States are all areas where "pop up" terrorist activity can be expected and needs to be monitored and dealt with.

Afghanistan, Mr. Chairman, once the safe haven for Osama bin Ladin, has started on the road to recovery after decades of instability and civil war. Hamid Karzai's election to the presidency was a major milestone. Elections for a new National Assembly and local district councils, tentatively scheduled for this spring, though that's an ambitious schedule, will complete the process of electing representatives this year, hopefully. President Karzai still faces a low-level insurgency aimed at destabilizing the country and raising the cost of reconstruction and ultimately forcing coalition forces to leave before the job is done. The development of the Afghan National Army and the national police force is going well, although neither can yet stand on its own.

In Iraq, low voter turnout in some Sunni areas and the post- election resumption of insurgent attacks, most against Iraqi civilian and security forces, indicate that the insurgency achieved at least some of its election day goals and remains a serious threat to creating a stable representative government in Iraq. Self- determination for the Iraqi people will largely depend on the ability of the Iraqi forces to provide their own security. Iraq's most capable security units have become more effective in recent months, contributing to several major operations and helping to put an Iraqi face on security operations. Insurgents are determined and still trying to discourage new recruits and undermine the effectiveness of existing Iraqi security forces by grotesque intimidation tactics.

The prolonged lack of security would hurt Iraq's reconstruction efforts and economic development, causing overall economic growth to proceed at a slower pace than many analysts expected, and certainly that the Iraqi people deserve. Alternatively, the larger uncommitted moderate Sunni population and the Sunni political elite may seize the post-electoral moment to take part in creating Iraq's new political institutions if victorious Shi'a and Kurdish parties include Sunnis in the new government and the drafting of the constitution. That is a hopeful opportunity.

On the subject of proliferation, Mr. Chairman, I now turn to the worldwide challenge. Last year started with promise as Libya had just renounced its WMD programs, North Korea was engaged in negotiations with regional states on its nuclear weapons program, and Iran was showing greater signs of openness regarding its nuclear program after concealing activity for nearly a decade. Let me start with Libya, which is a bit of a good news story, and one that reflects the patient perseverance with which the intelligence community writ large can tackle a tough intelligence problem.

In 2004 Tripoli followed through with a range of steps to disarm itself of WMD and ballistic missiles. Libya gave up key elements of its nuclear weapons program and opened itself to the IAEA. Libya gave up some key CW assets and opened its former CW program to international scrutiny. After disclosing its Scud stockpile and extensive ballistic and cruise missile R&D efforts in 2003, Libya took the important step to abide by its commitment to limit its missiles to the 300-kilometer range threshold of the Missile Technology Control Regime.

Today, the U.S. continues to work with Libya to make sure that any discrepancies in the declarations they have made are clarified.

North Korea, on the other hand, on 10 February 2005 -- not long ago -- Pyongyang announced it was suspending participation in the six- party talks, under way since 2003, declared it had nuclear weapons, and affirmed it would seek to increase its nuclear arsenal. The North had been pushing for a freeze on its plutonium program in exchange for significant benefits, rather than committing to the full dismantlement that we and are our partners seek.

In 2003, the North claimed it had reprocessed the 8,000 fuel rods from the Yongbyong reactor, originally stored under the agreed framework, with the IAEA monitoring in '94. The North claims to have made new weapons from its reprocessing effort. We believe North Korea continues to pursue a uranium enrichment capability drawing on the assistance it received from A.Q. Khan before his network was shut down.

North Korea continues to develop, produce, deploy, and sell ballistic missiles of increasing range and sophistication, augmenting Pyongyang's large operational force of Scud and Nodong class missiles. North Korea could resume flight-testing at any time, including longer- range missiles, such as the Taepo Dong-2 system. We assess that the TD2 is capable of reaching the United States with a nuclear-weapon- sized payload.

North Korea continues to market its ballistic missile technology, trying to find new clients, now that some traditional customers, such as Libya, have halted such trade. We believe North Korea has active CW and BW programs and probably has chemical and possibly biological weapons ready for use.

Iran. In early February, the spokesman of Iran's Supreme Council for National Security publicly announced that Iran would never scrap its nuclear program. This came in the midst of negotiations with EU-3 members -- that would be Britain, Germany and France -- seeking objective guarantees from Tehran that it would not use nuclear technology for nuclear weapons. Previous comments by Iranian officials, including Iran's supreme leader and its foreign minister, indicated that Iran would not give up its ability to enrich uranium. Certainly it would be right for Iran to have the capability to produce fuel for power reactors. But we're more concerned about the dual-use nature of the technology that could also be used to achieve a nuclear weapon. We do not have transparency.

In parallel, Iran continues its pursuit of long-range ballistic missiles, such as an improved version of the 1,300-kilometer-range Shahab-3 MRBM, to add to the hundreds of short-range Scud missiles it already has.

Even since 9/11, Tehran continues to support terrorist groups in the region, such as Hezbollah -- it is a state sponsor -- and could encourage increased attacks in Israel and the Palestinian territories to derail progress toward peace there. Iran reportedly is supporting some anti-coalition activities in Iraq and seeking to influence the future character of the Iraqi state. Conservatives are likely to consolidate their power in Iran's June 2005 presidential elections, further marginalizing the reform movement of last year. Iran continues to retain in secret important members of al-Qaeda, causing further uncertainty about Iran's commitment to bring them to justice one way or another.

Moving to China; Beijing's military modernization and military build-up could tilt the balance of power in the Taiwan Strait. Improved Chinese capabilities threaten U.S. forces in the region. In 2004, China increased its ballistic missile forces deployed across from Taiwan and rolled out several new submarines. China continues to develop more robust, survivable nuclear-armed missiles, as well as conventional capabilities for use in regional conflict.

Taiwan continues to promote constitutional reform and other attempts to strengthen local identity. Beijing judges these moves to be a, quote, "timeline for independence," unquote. If Beijing decides that Taiwan is taking steps toward permanent separation that exceed Beijing's tolerance, we assess China is prepared to respond with varying levels of force.

China is increasingly confident and active on the international stage, trying to ensure it has a voice on major international issues, to secure access to natural resources, and to counter what it sees as United States efforts to contain or encircle it.

New leadership under President Hu Jintao is facing an array of domestic challenges in 2005, including the potential for a resurgence in inflation, increased dependence on exports, growing economic inequalities in the country, increased awareness of individual rights, and popular expectations for his new leadership.

In Russia, the attitudes and actions of the so-called "siloviki" -- the ex-KGB men that Putin has placed in positions of authority throughout the Russian government -- may be critical determinants of the course Putin will pursue in the year ahead.

Perceived setbacks in Ukraine are likely to lead Putin to redouble his efforts to defend Russian interests abroad while balancing cooperation with the West. Russia's most immediate security threat is terrorism, and counterterrorism cooperation undoubtedly will continue.

Putin publicly acknowledges a role for outside powers to play in the former -- the confederate states, but we believe he is nevertheless concerned about further encroachment by the U.S. and NATO into the region. Moscow worries that separatism inside Russia and radical Islamic movements beyond their borders might threaten stability in southern Russia. Chechen extremists have increasingly turned to terrorist operations in response to Moscow's successes in Chechnya, and it is reasonable to predict that they will carry out attacks against civilian or military targets elsewhere in Russia in 2005.

Budget increases will help Russia create a professional military by replacing conscripts with volunteer servicemen and focus on maintaining, modernizing and extending the operational life of strategic weapons systems, including nuclear missile force. Russia remains an important source of weapons technology, material and component for other nations. The vulnerability of Russian WMD materials and technology to theft or diversion is a continuing concern.

Under areas of potential instability, Mr. Chairman, I briefly would go to the Middle East.

The election of the Palestinian president, Mahmoud Abbas, marks an important step, and Abbas has made it clear that negotiating a peace deal with Israel is a very high priority. That's extraordinarily good news. Nevertheless there are hurdles ahead.

Red lines must be resolved while the Palestinian leaders try to rebuild damaged PA infrastructure and governing institutions, especially the security forces, the legislature and the judiciary -- those things that will help stability. Terrorist groups, some of who benefit from funding from outside sources, could step up attacks to derail peace and progress, and need close monitoring.

In Africa, chronic instability will continue to hamper counterterrorism efforts and pose heavy humanitarian and peacekeeping burdens on us.

In Nigeria, the military is struggling to contain militia groups in the oil-producing south and ethnic violence that frequently erupts throughout the country. Extremist groups are emerging from the country's Muslim population of about 65 million. Nigeria is a big oil producer for us.

In Sudan, the peace deal signed in January will result in de facto southern autonomy and may inspire rebels in provinces such as Darfur to press harder for a greater share of resource and power. Opportunities exist for Islamic extremists to reassert themselves in the north unless the central government stays unified.

Unresolved disputes in the Horn of Africa, Africa's gateway to the Middle East, create vulnerability to foreign terrorist and extremist groups. Ethiopia and Eritrea still have a contested border, and armed factions in Somalia indicate they will fight the authority of a new transnational government -- transitional government.

In Latin America, the region is entering a major electoral cycle in 2006. Brazil, Colombia, Costa Rica, Ecuador, Mexico, Nicaragua, Peru and Venezuela hold presidential elections. Several key countries in the hemisphere are potential flashpoints in 2005.

In Venezuela, Chavez is consolidating his power by using technically legal tactics to target his opponents and meddling in the region supported by Castro.

In Colombia, progress against counternarcotics and terrorism under President Uribe's successful leadership may be affected by an election.

The outlook is very cloudy for legitimate, timely elections in November 2005 in Haiti, even with substantial international support.

Campaigning for the 2006 presidential election in Mexico is likely to stall progress on fiscal, labor, and energy reform.

And in Cuba, Castro's hold on power remains firm, but a bad fall last October has rekindled speculation about his declining health and succession scenarios.

In Southeast Asia, three countries bear close watching.

In Indonesia, President Yudhoyono has moved swiftly to crack down on corruption. Reinvigorating the economy, burdened by the costs of recovery in tsunami-damaged areas, will likely be affected by continuing deep-seated ethnic and political turmoil exploitable by terrorists.

In the Philippines, Manila is struggling with prolonged Islamic and communist rebellions. The presence of Jemaah Islamiyah terrorists seeking safe haven and training bases in the south adds volatility and capability to terrorist groups already in place.

And finally, Mr. Chairman, Thailand is plagued with an increasingly volatile Muslim separatist threat in its southeastern provinces, and the risk of escalation remains very high.

I thank you very much for that opportunity to give a brief overview.

SEN. ROBERTS: We thank you, Mr. Director, for a very comprehensive statement.

Director Mueller.



Director, Federal Bureau of Investigation

MR. MUELLER: Good morning, Mr. Chairman. Thank you. Thank you, Mr. Chairman and Senator Rockefeller and the members of the committee. I appreciate this opportunity to discuss our current view of threats to the United States and the FBI's efforts to address these threats.

Mr. Chairman, over the past year, through unprecedented cooperation, particularly with our other federal agencies but most particularly with state and local law enforcement, and with enhanced intelligence capabilities, we have achieved considerable victories against national security and criminal threats facing the United States. However, at the same time, I must also report that these threats continue to evolve and to pose new challenges to the FBI and to our partners.

It remains our -- the FBI's overriding priority to detect and prevent terrorist attacks. And the threat posed by international terrorism, and in particular from al Qaeda and from related groups, continues to be the gravest threat that we face.

In 2004 we learned that terrorist cell members had conducted detailed surveillance of financial targets in New York; Washington, D.C.; and New Jersey. And in response to this threat and in coordination with the Department of Homeland Security, the threat level was raised, and we mobilized a substantial contingent of agents and analysts to review the massive amount of information connected with the attack planning and to uncover any additional information that would give us insight into that plot.

And then later in the year, we received information suggesting that there would be an attack -- there was an attack being planned, possibly timed to coincide with the period before the 2004 presidential election. To counter that threat, the FBI created a task force in May 2004, and with thousands of FBI personnel, working together with hundreds of individuals from other agencies, federal, state and local, we brought to bear every possible resource in an effort to identify the operatives and to disrupt the attack planned.

As part of the initiatives of this task force, field offices conducted a thorough canvass of all of our counterterrorism investigations, as well as all of our sources, not only counterterrorism sources but other sources, in an effort to develop any further information that could help us find these individuals.

And during the seven months that the task force was up and running, we also checked every substantive lead provided in the threat intelligence. It was indeed an extraordinary effort, and while we never -- may never know if an operation was indeed being planned, I am certain that our response to the threat played an integral role in disrupting any operational plans that may have been under way.

Mr. Chairman, since we last spoke, the FBI has identified various extremists located throughout the U.S. and is monitoring their activities. My prepared statement sets forth a number of instances in which we have taken legal action against individuals engaged terrorism-related activities in Virginia, Minneapolis and New York. And although these efforts have made us safer, they are also a sobering reminder of the threat we continue to face.

There are three areas that cause us the greatest concern.

First is the threat from covert al Qaeda operatives inside the United States who have the intention to facilitate or to conduct an attack. And finding them is the top priority for the FBI, but it is also one of our most difficult challenges. The very nature of a covert operative, trained to not raise suspicion and to appear benign, is what makes their detection so difficult. Whether we are talking about a true sleeper operative who has been in place for years, waiting to be activated to conduct an attack, or a recently deployed operative who has entered the United States to facilitate or to conduct an attack, we are continuously adapting our methods to reflect newly received intelligence and to ensure we are as proactive and as targeted as we can be in detecting their presence.

The second. We are also extremely concerned with a growing body of sensitive reporting that continues to show al Qaeda's clear intention to obtain and to ultimately use some form of chemical, biological, radiological, or nuclear material in its attacks against the United States. We still assess that a mass-casualty attack using relatively low-tech methods will be their most likely approach. We are concerned that they are seeking weapons of mass destruction, including chemical weapons, so-called dirty bombs, or some form of biological agent such as anthrax.

Third, we remain concerned about the potential for al Qaeda to leverage extremist groups with peripheral or historical connections to al Qaeda, and particularly its ability to exploit radical American converts and other indigenous extremists. While we still believe that the most serious threat to the homeland originates from al Qaeda members located overseas, the bombings in Madrid last March have heightened our concern regarding the possible role that indigenous Islamic extremists, already in the United States, may play in future terrorist plots. We are also concerned about the possible role that peripheral groups with a significant presence in the United States may play if called upon by members of al Qaeda to assist them with attack planning or logistical support.

The potential recruitment of radicalized American Muslim converts continues to be a concern and poses an increasingly challenging issue. The process of recruitment is subtle and many times self-initiated, and radicalization tends to occur over a long period of time and under very many different circumstances.

Efforts by extremists to obtain training inside the United States is also an ongoing concern. Although there are multiple reports and ongoing investigations associated with the paramilitary training activities of suspected extremists nationwide, the majority of these cases involve small groups of like-minded individuals who are inspired by the jihadist rhetoric found in radical mosques or in prison proselytizing or on the Internet. Fortunately, the recent amendment to Title 18 adding a provision prohibiting individuals from receiving military-type training from a designated foreign terrorist organization makes it possible now to prosecute individuals who participate or assist individuals in receiving this type of training.

Mr. Chairman, al Qaeda and the groups that support it are still the most lethal threat we face today. However, other terrorist groups that have a presence in the United States require careful monitoring.

It is the FBI's assessment at this time that there is a limited threat of a coordinated terrorist attack in the United States from Palestinian terrorist organizations such as Hamas, the Palestine Islamic Jihad and the al-Aqsa Martyrs Brigade. These groups have maintained a long-standing policy of focusing their attacks on Israeli targets in Israel and the Palestinian territories.

We believe that the primary interest of Palestinian terrorist groups in the United States remains the raising of funds to support their regional goals. We are committed to cutting off the flow of funds from the United States to Palestinian terrorist organization. As an example of this effort, the former leadership of the Holy Land for Relief and Development, a Hamas front organization, was indicted this past year; and in another case Elashi brothers, who owned and ran Infocom, another Hamas front organization, were prosecuted and convicted.

Of all the Palestinian groups, Hamas has the largest presence in the United States with a strong infrastructure, primarily focused on fundraising, propaganda for the Palestinian cause, and proselytizing. Although it would be a major strategic shift for Hamas, its United States network is theoretically capable of facilitating acts of terrorism in the United States.

And like Hamas, but on a much smaller scale, United States-based Palestine Islamic Jihad members and supporters are primarily engaged in fundraising, propaganda and proselytizing activities. In 2003, the Palestine Islamic Jihad, or PIJ, activities and capabilities in the United States were severely undercut by the arrests of the PIJ leader, Sami al-Arian, and his lieutenants. And there have also been two additional arrests of suspected PIJ activists on charges unrelated to terrorism, which I believe are set forth in my accompanying statement.

Currently, the most likely threat of terrorist attacks from Palestinian groups in the United States homeland is from a lone wolf scenario. In this scenario, a terrorist attack would be perpetrated by one or more individuals who may embrace the ideology of a Palestinian terrorist group but act without assistance or approval of any established group.

And then, Lebanese Hezbollah retains the capability to strike in the United States, although we have no credible information to indicate that United States-based Hezbollah members have plans to attack American interests within the United States, or, for that matter, abroad. I might add, in 2004, we had successes in uncovering individuals providing material support to Hezbollah, many of those individuals involved in various criminal schemes to provide the monies that could be sent to Lebanon, to the coffers of Hezbollah.

Mr. Chairman, while the national attention is focused on the substantial threat posed by international terrorists to the homeland, the FBI must also dedicate resources to defeating a number of other threats, as detailed in my prepared statement. For example, domestic terrorists, motivated by a number of political or social agendas, including white supremacists, black separatists, animal rights/environmental terrorists, anarchists, anti-abortion extremists, and self-styled militia groups.

Foreign intelligence activity, often using non-traditional collectors, such as students and business visitors, targeting WMD information and technology, penetration of the United States government and compromise of critical national assets. There is the cyberthreat from foreign governments, from terrorist groups, and from hackers with the ability and the desire to utilize computers for illegal and harmful purposes. And finally, there are the continuing threats posed by the fabric -- posed to the fabric of our society by organized crime, human smuggling and trafficking, violent gangs, public corruption, civil rights violations, crimes against children, and corporate fraud.

Mr. Chairman, in combatting all these threats, from international terrorists to child predators, the FBI must effectively collect, analyze and share intelligence. And as a result, over the past year we have continued to strengthen the FBI's enterprise-wide intelligence program. We began in 2001 with a dedicated analysis section in the Counterterrorism Division, in 2002 we created the Office of Intelligence in the Counterterrorism Division. That structure has enhanced our capability significantly for purposes of our CT -- counterterrorism operations as well as the counterterrorism operations of our partners.

In 2003, we extended this concept across all FBI programs -- Criminal Cyber, Counterterrorism and Counterintelligence -- and unified intelligence authorities under a new FBI Office of Intelligence led by an executive assistant director. The Office of Intelligence has adopted the intelligence community's best practices to direct all FBI intelligence activities. Congress and the 9/11 commission reviewed these efforts and provided recommendations to strengthen our capabilities.

In last year's intelligence reform legislation, averted to by Senator Rockefeller, Congress directed us to create the Directorate of Intelligence, a dedicated national security workforce within the FBI, and we are doing so. This workforce consists of intelligence analysts, language analysts, physical surveillance specialists, and special agents who can pursue an entire career in intelligence. This integrated intelligence service leverages the core strengths of the law enforcement community -- such as reliability of sources and fact- based analysis -- while ensuring that no walls exist between collectors, analysts and those who must act upon the intelligence information.

The directorate also benefits from the strong FBI history of joint operations by unifying FBI intelligence professionals and integrating all partners, but most particularly state, local, and tribal law enforcement, into our intelligence structures.

Mr. Chairman, my prepared statement provides additional information about the Directorate of Intelligence and the many steps the bureau has taken to expand and to strengthen its intelligence capabilities. We continue to make progress, but there is still much work to do. We do not underestimate the challenges we face, but we are confident in our strategy and in our plans to protect the American people.

I again would like to thank you and the committee for your support, and I look forward to working with you and the staff in the months, and hopefully, the years ahead. And I'm happy to answer any questions that you might have.

Thank you, sir.

REP. ROBERTS: Dr. Mueller, we thank you for your statement as well, and thank you for the job you're doing in a very difficult challenge in changing the mission of the FBI and still keeping a mission in regards to crime and in regards to law enforcement.

Admiral Loy?

And I would say to all members that Ms. Rodley and Admiral Jacoby are here to answer questions, and so Admiral Loy will give the last prepared statement.

I neglected to tell all of you that each and every word of your testimony will be in the record and preserved for all time. And so feel free to summarize your statements. I apologize. That's not an admonition, that's just a statement.

Admiral Loy? And I'm not trying to pick on you.



Deputy Secretary of the Department of Homeland Security

MR. LOY: Thank you, Mr. Chairman. Good morning, Chairman Roberts and Vice Chairman Rockefeller and distinguished members of the committee. I'm pleased to have the chance to appear before you today to discuss the threats against the U.S. homeland, as well as some of the capabilities we've developed and must continue to develop to confront these threats. That important link between the intelligence we process and the systems we develop in response cannot be understated. For every possible action we uncover, there must be an intensely focused reaction designed to secure our homeland against that threat.

In so many areas of greatest concern, vulnerabilities we've identified, such as our transportation systems, particularly air travel; our border functions; and our critical infrastructures, such as ports and energy facilities, we have made very real measurable progress that has made our nation more security.

The topic of our hearing is very straightforward: What is the nature of the worldwide threat? And from the DHS perspective, I would make simply five basic points.

First, the threat is unclear and complex, but enduring. The condition is not expected to change. We continue to note attempted entry into the U.S. by aliens who, according to intelligence, pose a threat to our homeland.

Second, we assess that al Qaeda continues to be the primary transnational threat group, although we are seeing the emergence of other threatening groups and gangs, like MS-13, that will also be destabilizing influences.

Third, we think we are most likely to be attacked with a vehicle- borne improvised explosive device, because that's the weapon of choice around the world. However, it remains very clear that our primary adversaries continue to seek weapons of mass effect, with which they intend to strike us if they acquire them.

Fourth, at DHS, we continue to make progress in acquiring analysts and improving our capabilities just two years into our existence. However, we have not yet fully achieved the capability in people, facilities and technical capability we think is necessary to protect our homeland. We can and we are doing the job through extraordinary effort on the part of our intelligence professionals and through the collegial efforts of all of those at this table and many other agencies in the federal sector.

And lastly, the intelligence community interaction with DHS has markedly improved over this past year, and we continue to work toward full integration and interoperability. The aftermath of the Intelligence Reform Act is being treated as an opportunity to complete that work, to earn the respect of our colleagues as a full and deserving player in the intelligence community, and to allow that respect to serve as the foundation DHS needs to fulfill its responsibilities to secure our homeland.

Thankfully, we have not experienced another attack on our soil since September 11th, 2001, but the rest of the world has not been so fortunate. If you ask the residents of Madrid or Beslan or Bali or Jakarta or many others, they will assure you that not only the threat but also the harsh daily reality of terrorism is alive and well around the world.

We realize that an attack here could come in any form, at any place, on any timetable. Terrorist groups, even ones whose capabilities may have been weakened by arrests and interdictions worldwide, are patient, strategic and methodical in their operational planning. At home, we must prepare ourselves for any attack, from IEDs to weapons of mass destruction, from soft targets, like malls, to national icons.

Intelligence suggests that al Qaeda may have specific tendencies or certain intentions, both small- and large-scale, and our efforts must stay directed to this full range of threats. We must assume that they are assembling or reassembling the capabilities they don't currently have, or those that have been taken from them.

So our plan of action, like theirs, must be even more deliberate and even more enduring, and it is.

We have built new tools to help in each of the five strategic areas of operational emphasis in our department. Our charter runs from maximum domain awareness, if you will, through prevention and protection efforts to response and recovery planning. We have published an all-hazards all-threats National Response Plan and its sister document, the National Incident Management System. We have dramatically improved our technical ability to share information. Tools such as the Homeland Security Operations Center, the Homeland Security Information Network and the Homeland Security Advisory System are steps toward full capacity and capability. We know the end state we want to reach, and we are methodically designing the path to get there.

We have greatly improved systems to keep track of persons who cross the border, and we have begun to apply technology to monitor the border where there is no human presence. We're operating the US-VISIT program to verify the identity of travelers and stop criminals and terrorists before they can enter our society. We've signed smart- border accords with our neighbors to the north and south, Canada and Mexico, to help the highly trained Customs officers, border agents, coast guardsmen and many others who monitor and patrol our nation's nearly 7,500 miles of land border and 95,000 miles of coastline and waterways. We now require unprecedented scrutiny of high-risk travelers and flights landing in or flying over the United States, including requiring biometric information on visas and passports, and agreeing to share passenger data with our European allies. These are important strides that keep the doors of our country open to legitimate visitors, but firmly shut to terrorists.

We know that al Qaeda would like to impact our economy with attacks on our financial systems, our cyber networks and the vital elements of our global supply chain. So we've taken measures to secure cargo and protect the infrastructure that supports the free and safe movement of goods and people and money around the world.

We launched the Container Security Initiative to target and screen high-risk cargo before it reaches our shores, and today we operate that program alongside our allies in 34 ports around the world in 22 different countries, with a growth posture scheduled for '05 and on into '06.

We are in the process of finalizing, with the input from private- sector stakeholders as well as many others, a national cargo security strategy.

We included a special section on cyber security in the newly released National Response Plan to enhance government-wide collaboration and coordination to prevent an attack on the backbone of our electronic economy.

And most important, we've been careful to consider the economic impact and the privacy implications of any additional security efforts, and worked to ensure that added protections do not detract from our competitiveness or from our way of life.

In ways large and small, seen and unseen, with advanced technologies and additional vigilance, with the help of countless agencies and allies at every level of government, in the private sector and throughout the world, we have made it harder for terrorists to attack our country, more difficult for them to defeat our systems, and reduced large gaps they once saw in our security posture.

As the president has said, we are safer than ever before, but we are still not safe enough.

This experiment called DHS is astonishingly complex. Some dimensions of the challenge are further along than others. That's the nature of culture and transformational change. I'm proud to hand over a 2-year-old department with a solid foundation and a solid sense of direction to our incoming leadership team. I'm deeply appreciative of the support, constructive criticism and the resources that have come our way over the past two years from the Congress. This committee's continued focus and review must remain our nation's conscience until we get this work accomplished.

Last night I spoke to a group of 400 young people, high school people, in a program geared to encouraging public service. I promised them that we would do all we could to lighten their burden when it's their turn on watch. And we can only meet that promise when our national intelligence capability is sound, inclusive, whole. Anything short of that is simply unsatisfactory.

Thank you, Mr. Chairman. I'll happily answer your questions.

SEN. ROBERTS: Well, we thank you, Admiral, for a very comprehensive statement.

I would tell the witnesses that we're having a closed hearing on the threat of nuclear terrorism as of tomorrow. It's my personal belief that if al Qaeda could obtain a nuclear weapon or any material and could get it into the U.S. that they'd use it. The question is (not) whether or not al Qaeda would use a nuclear weapon but can they get one. Now, Pakistani scientist A.Q. Khan passed secrets and equipment to a host of rogue nations. The Pakistani government has cooperated in our efforts to stop this activity, and Mr. Khan is under house arrest in Pakistan.

This is for Director Goss, Admiral Loy. What is your assessment of the current status of the Khan network? Does the fact that he is in custody mean the network is shut down? Are there any other non- state actors that are potential Khans?

And especially for Admiral Loy: What is the Department of Homeland Security's assessment of that threat? You have touched on it in your statement. And more particularly, if you could be very succinct, what steps has your department taken to prevent or to mitigate a terrorist attack utilizing any nuclear weapons?

Director Goss?

MR. GOSS: Mr. Chairman, thank you. Actually it's timely that you ask that question because we are further exploring our opportunities to learn about Mr. Khan and what he has done. I am unable to give you the details of that. That would be suitable for closed hearing. But I can assure you that virtually as we speak, efforts -- active, appropriate, direct efforts -- are under way on that matter.

We have found that from a variety of sources following the leads of what we've known already that we've uncovered many new things, and we have found that in covering those things that we have not got to the end of the trail. Getting to the end of that trail is extremely important for us. It is a serious proliferation question. I'm pleased you're having a closed hearing. I'd be very happy to make available those experts in our business who can contribute to your wisdom in a closed session.

SEN. ROBERTS: What about the non-state actors that are potential Khans?

MR. GOSS: The potential Khans are a very nervous worry for us, obviously. If there were a way, and that's the big question, how would they go about getting it? Would we know and could we stop it? In some cases the regimes we have are good enough to understand most of the issue and most of the stocks and where things are supposed to be and how they're supposed to work, but "most" isn't good enough; you need 100 percent to get to the guarantee that you want. So the answer: For non-state actors, being able to get these kinds of materials, either nuclear, chem or bio, is a reality.

SEN. ROBERTS: Admiral Loy, your assessment of the nuclear terrorism threat? You touched on it in your statement.

MR. LOY: Briefly, sir, certainly there are three or four that we would categorize as those concerns that keep us awake nights the most. They certainly would include nuclear, chemical, bio and cyber. With respect directly to nuclear, Director Goss has the inside track. I would offer to -- offering the most insight to the worldwide nature with respect to proliferation. Our concerns at DHS go more directly to the ability to detect those materials as they might be coming in our direction.

In the president's budget for '06, there is an initiative that we're referring to as the National Nuclear Detection Office, to be established inside the Department of Homeland Security, not a DHS initiative but literally a national initiative wherein the offices and the good capabilities of DOD and DOJ and DOE and all others with equities in the issue can be pooled such that we can make some kind of an effort that does two things: one, optimizes the deployment of current capability in the areas of detection, and secondly, (sends this ?) a significant amount of money, almost a mini-Manhattan Project, if you will, to offer us a chance to break through towards next-generation capability of detection. Those are the efforts that we have under way, Mr. Chairman. And again, if there is a closed hearing, we'd be happy to --

SEN. ROBERTS: I'm going to change the subject. In the last few years, we've had the joint inquiry, the 9/11 commission, this committee's review in regards to WMD in Iraq, all of which highlighted the failure to share intelligence information across the intelligence community. For every intelligence failure, you hear another recommendation for more information sharing. That's the buzzword. For too many times when we hear about a consensus threat, we find out there's not a consensus. I believe, however, that information sharing is a rather limited idea that falsely implies that the intelligence collectors own the information that they collect. The vice chairman and I also think that information sharing means that the collectors push information to the analysts they believe have a need to know.

I think we need to change our thinking on this issue. It's time to begin working toward a more powerful concept. We call it information access. No one agency of the U.S. government owns intelligence information, and any cleared analyst with a need to know should be able to access it. While sensitive information must still be managed, I know that, cleared analysts should be able to pull that information by searching all intelligence databases without having to wait for any one agency to push the information to them as we do it today.

What do you think -- and I'm addressing basically Director Goss here -- about this idea of information access? -- as well as Director Mueller. Do we need to take a classification authority away from the collection agencies and put it in the hands of an authority -- i.e., the DNI -- who is neither a collector or an analyst, who can more honestly balance the need to know with the need to protect the sources and methods?

MR. MUELLER: Thank you, Mr. Chairman. The sources and methods question I am clear on: we do need to protect our sources and methods. The degree that some of our sources and methods are revealed in the media from time to time through leaks and other matters does not necessarily mean we shouldn't continue to protect them. Just because it's reported in the paper doesn't mean we're going to confirm it. Sometimes we are able to still get further utility out of sources and methods even though they have been discussed, because not everybody may read that particular paper.

But it is harmful to us that in our efforts to broaden the product in the community that not everybody is playing by exactly the same rules. We find that different people treat classifications different ways and have different reactions to it.

So I do believe you would be right in focusing some attention on the classification and declassification process. That is clearly an area that needs attention, something we've talked about in the past, and it is still somewhat of a neglected stepchild.

In the area of getting the information to who needs to know, that's exactly on target. The trick is, who needs to know? It was always a question of sharing with "who needs to know". The question of who makes that decision of who needs to know has always been the problem.

We find that the audience of "who needs to know" is, in fact, larger as we bring our community and its many, many elements together that are being asked to do things -- more things not only overseas, but particularly now at home. Our domestic agencies, as Admiral Loy has just testified and as Director Mueller has testified, clearly are doing things in the war on terrorism that require sharing of information, while before an intelligence program, which is where the intelligence program has always operated, is doing new business with domestic agencies to deal with terrorism in a domestic way, because as you know, the foreign intelligence program is prohibited from spying on Americans. So getting that piece just right has been part of the effort as we have gone on since 9/11. And I am pleased to report we are doing exceedingly well, in my view, on that. And I would hope that my colleagues would agree, there's still room to go, but I believe we are sharing much better. I certainly agree analysts should be driving collection and not the other way around.

SEN. ROBERTS: I ask for the patience of my colleagues. My time is up, but I would like for Director Mueller to address this, and also Admiral Jacoby.

MR. MUELLER: I certainly agree --

SEN. ROBERTS: If you can be short and succinct, sir.

MR. MUELLER: I certainly agree with the premise that those responsible for acting should have access to the information in whatever database it resides, in whatever agency. I think TTIC to -- the Terrorist Threat Integration Center and the National Counterterrorism Center, when it comes to terrorism information, has taken us well along that way to give us access to the information regardless of which data -- in which database it resides. Colocation, as we colocated out in Tyson, has helped immeasurably to break down some of those barriers.

So I agree with the premise. I also agree with the, I think, the second premise, and that is the important of the analysts having access to at least information relating to the motivation -- motivations of underlying sources, the access that the underlying source may have to the information, having more clarity as to what moves the person to provide the information to whether it be the FBI, CIA or elsewhere. And that I think is something we have to work on.

Lastly, in terms of the DNI having -- moving the authority from the agency to the DNI, I do think the agency, at the outset, needs the authority to protect its sources of methods, but it should be reviewed by the DNI. I don't think that moving it up to the DNI would work all that well, but I do believe that the DNI ought to review how we classify, how we describe our sources and methods.

REP. ROBERTS: Admiral?

ADMIRAL JACOBY: Sir, your ownership of information statement is right on the mark, sir. I think that's a desperately important area for this committee and for our community to continue to work hard on. Part of it that comes along with "need to know" is the way we do business today is the collector decides who needs to know in many cases. We need to swap that and have the analysts who are charged with discovering information and generating knowledge be the driver in the process.

The other part that's desperately important to this is putting in place the smart network that is talked about so concisely in the 9/11 commission report, because applying modern commercial information management kinds of tools will help us to separate the content from collected information, while still protecting the sourcing of the information. That's a desperately important part of this whole discussion and needs to be pursued very aggressively.

REP. ROBERTS: Admiral Loy and Ms. Rodley, I apologize for not asking for your response, in the interest of time. But I would just say from the INR aspect, I know the vice chairman and I and members of this committee want to thank you. You're one agency that got it right in regards to the WMD situation, and both of you have a very strong interest in this.

Senator Rockefeller?

And I apologize to my colleagues.

SEN. ROCKEFELLER: Thank you, Mr. Chairman. I just second what the chairman has indicated. I referred to sharing and access -- if you share it's the decision to give, it's a decision on the part of the holder. If it's access, then it is the right of the receiver. So sharing out, giving -- or getting -- I'm sorry -- getting in. And I think that will be worked out over the years.

Director Goss, the National Intelligence Council recently issued its annual report to Congress on the safety and the security of Russian nuclear facilities and military forces. The report is both classified and unclassified.

One excerpt from the unclassified version is as follows: "Russian officials have reported that terrorists have targeted Russian nuclear weapon storage sites. Security was tightened in 2001, after Russian authorities twice thwarted terrorist efforts to reconnoiter nuclear weapon storage sites. We find it" -- this is a continuation of the report, unclassified. "We find it highly unlikely that Russian authorities would have been able to recover all the material reportedly stolen. We assess that undetected smuggling has occurred. And we are concerned about the total amount of material that could be diverted or stolen in the last 13 years."

And I'd ask you, sir, is the material missing from Russian nuclear facilities sufficient to construct a nuclear weapon?

MR. GOSS: Senator, the way I would prefer to answer that question is there is sufficient material unaccounted for so that it would be possible for those with know-how to construct a nuclear weapon. I hope that's sufficiently clear in open session.

SEN. ROCKEFELLER: We'll wait for a closed session.

In light of the National -- on the same subject, the National Intelligence Council's assessment, can you assure the American people -- and I think this is a yes-or-no type thing -- can you assure the American people that the material missing from Russian nuclear sites has not found its way into terrorist hands?

MR. GOSS: No, I can't make that assurance. I can't account for some of the material, so I can't make the assurance about its whereabouts.

SEN. ROCKEFELLER: Appreciate it, sir.

Africa. Since the '80s, a million people died of starvation, enormous dislocation, poverty, hopelessness, despair, instability, a fertile breeding ground for terrorism both east and west, a large Islamic population. Instability in the African continent has allowed us to intervene episodically back and forth. But the whole prospect of the concept that this is the next great threat, that being something called a failed continent -- General James Jones made that point to the chairman and I three times in a presentation in London when he was stationed there. He said, "This is the continent that you in the intelligence world need to be looking at." A failed continent because we are consumed by challenges in Iraq necessarily, Afghanistan and other world hot spots.

Again, Mr. Goss -- Director Goss, are we facing the possibility, do you think, of the collapse of civil society throughout much of Africa? Should we be addressing the problems in these countries now rather than at a future date, when our options will be more likely to be military?

MR. GOSS: Senator, thank you.

As you know, I have made the statement many times that I don't want to get into the Department of State's policy areas, and the question you've asked me gets into a(n) actually much bigger question than just the intelligence community. But it's a great question, and you are right on the mark that this is an over-neglected area that is underresourced for American interests from my perspective.

I can tell you that I have read Kaplan's piece about the resurgence of anarchy and I've read Friedman's pieces on this. We have seen all kinds of very nasty people -- Foday Sankoh, people like that -- in the past who have taken advantage of exploitating -- exploitation of the processes there. We find that we are going backwards in some areas when we should be going forward. You heard me mention in my remarks a whole series of bands -- of arcs, as it were -- of different kinds of problem in Africa. I think it is a rich seabed for people who have a mission on their mind to go and try and recruit people. We have found that.

And we are making efforts there. And I would say we would be wise to solve problems sooner before they get more troublesome later. I do think that that is a(n) area that needs more attention in the intelligence community and all other efforts that we make.

SEN. ROCKEFELLER: Thank you, sir.

Admiral Jacoby, I can't imagine that you wouldn't have some comments.

MR. JACOBY: Senator Rockefeller, you know in past conversations we've talked about the -- sort of the global spread of issues. Certainly there's fertile ground in the Muslim populations in Africa for recruitment to extremist causes. Disaffected youth, youth bulge, socioeconomic situation, education shortfalls, unemployment and so forth make inviting recruiting targets. And obviously, as we look at the Madrid bombing and some of the things that have happened, particularly the North African crescent is an area of concern. So we take the Africa situation seriously in the sense that we have plussed- up our presence in our Defense attache offices, and we'll continue to do that with some new initiatives that go in place here in '05 and '06.

We view Africa as a place that needs to be monitored carefully. Trends need to be carefully described and assessed, and that the intelligence assessments reach policymakers in that part of the world -- there's a sense of urgency.

SEN. ROCKEFELLER: I would follow through to both of you that I think we all know that have an enormous scarcity of resources, of facilities, of capabilities, simply because of what's going on elsewhere.

And I hear what you both say, and I hear the sense of urgency behind what you say. But I also would guess that there's some frustration on your part that we may not have the financial capability or the trained personnel capability to be able to get to those areas to get that intelligence. Those are difficult languages, and it takes, as Dr. Goss has often said, five years to train a good agent.

MR. GOSS: I think you said it well, Senator.

MR. JACOBY: I agree completely, sir. Absolutely.

SEN. ROCKEFELLER: Thank you, Mr. Chairman.

SEN. ROBERTS: Let me just say that in reference to the vice chairman's concern about the situation in Russia in regard to loose nukes or loose bioweaponry or loose scientists or loose anything, in terms of security, that we should give a lot of credit to the Armed Services Committee and its distinguished chairman -- who is sitting over here, to my left and everybody's right -- Senator Warner, for taking such a strong interest in the CTR program, the Nunn-Lugar program. And knowing something about that on the Emerging Threats Subcommittee, we learned right away that the most important thing is to provide the security, if we want to eliminate the stockpiles and we want to safeguard the scientists and make sure they're not, you know, going somewhere else.

But we have made some progress, and we have put some conditions, and some of the foreign -- or some of our allies need to step up, and the Russians have stepped up. So I'm very hopeful we'll continue to see additional funding and really address that security issue.

Senator Bond.

SEN. CHRISTOPHER BOND (R-MO): Thank you, Mr. Chairman.

Director Mueller, you noted that the third concern was the recruitment of radical American converts. And this is something that I've become increasingly concerned about.

I don't know if you've just seen it, but recently the Freedom House put out a report on Saudi publications on hate ideologies filling American mosques. And as you read through it, you see the hate-filled language that is officially sponsored by the cultural offices of the embassy of Saudi Arabia and King Fahd mosques, supported by the king, has admonitions -- "Be dissociated from the infidels. Hate them for their religion. Leave them. Never rely on them. Do not admire them. And always oppose them in every way., according to Islamic law." The list of documents and the list of publications goes on. And it appears that the bargain with the devil made about 25 years ago -- that the Saudi government would support Wahhabism if they stayed out of Saudi Arabia -- is coming back to haunt us.

I would ask a question, number one, how serious a threat that is, and ask you and Admiral Loy to respond to it. And also, it seems to me if our doctrine is that a country that harbors terrorists is guilty, what about a country that fosters terrorists within our own country?

MR. MUELLER: It certainly, as I think I indicated in my opening remarks, it is an issue, the radicalization of individuals within the United States, and it can be done any number of ways. We are looking, for instance, at the prison systems, not just the federal systems but through our 100 Joint Terrorism Task Forces, working with state and local law enforcement to address the possibility that radicalization can occur throughout our prison system, as it has in the past in a variety of ways. Through our Joint Terrorism Task Forces we also are -- understand that persons absolutely have the right to practice religion in whichever way they want, but by the same token --

SEN. BOND: That's not the question, Mr. Director. It's what they are --

MR. MUELLER: Well, but I am going to say on the other hand --

SEN. BOND: Yeah.

MR. MUELLER: -- on the other hand, we have the obligation to determine and identify those persons who are becoming radicalized and become a threat to the United States. And through our working with state and local law enforcement, building up our intelligence capacity, working through our Joint Terrorism Task Forces, we continuously seek sources and information and intelligence as to those individuals who may become radicalized in a variety of ways.

The last point I would make is that -- I think others would agree with me -- is that there has been a shift in the attitude of Saudi Arabia in the wake of the May 2003 bombings, a substantial shift, and an understanding and a recognition of the threat not only to Saudi Arabia but to Saudi Arabia's interests around the world from those elements who have been radicalized.

SEN. BOND: Thank you, Mr. Director. They noted that these documents were still, as of December '04, were still in the King Fahd mosque, they're still being handed out.

Admiral Loy, any thoughts about how, from the Homeland Security standpoint, how dangerous is Saudi Arabia's supplying of this literature?

MR. LOY: Indeed, Senator Bond, there's three or four points that I would make. Number one, regardless of the sponsorship, the notion that you are citing in the things that you read are dramatic evidence of the challenge in front of us here, whether it's pure Saudi, from the implication of that particular set of materials, or what that line of logic is as a pervasive notion throughout not only Saudi Arabia but the rest of the world.

I sit on a couple of joint contact groups with allies, with the Brits, with Canada. And there has been over the last year a growth of an agenda item referring to radicalization as a significant issue that we have to grapple with.

SEN. BOND: Admiral Loy, if I may interrupt -- I apologize; the light's on.

I needed to ask Director Goss, Ms. Rodley and maybe Admiral Jacoby, I think that Southeast Asia is the second front in the war on terrorism. Director Goss mentioned that. I've recently come back from there. Jemaah Islamiyah, Moro Liberation Front, others, Abu Sayyaf are posing significant danger. Singapore, Malaysia and Indonesia have been aggressive.

Number one, I'd like to know whether you think these have become a threat to the U.S. homeland. And are our restrictions on the U.S. aid, IMET aid to Indonesian military hurting our ability to work cooperatively with that country?

Mr. Goss?

MR. GOSS: On the IMET question, there's no question that -- I can't speak specific to the particulars there; I don't know, maybe Admiral Jacoby can. But I will tell you that in fact we do have liaison relationships in the war on terror, of course on a global basis. And they are affected by other matters such as that, that you've specifically mentioned. In this case I can't answer your direct question, but I can tell you there is a relationship, but it's important that we understand that.

The second thing I would tell you is I think you're right to focus on Southeast Asia. It is an escalating area. We find that the degree of capability to deal with the problem there, the sophistication of dealing with the problem of terrorism there by the governments, the states that are there, is not adequate. Consequently, I would say it is a growth industry, regrettably.

Yes, it is a threat.

MR. JACOBY: Senator Bond, the key countries in the area are the ones that Director Goss identified -- Indonesia, Philippines, Thailand. Two of those countries we've had very long-standing IMET and other interactions, and it makes it far easier to work not only with their military forces but also with their military intelligence, with my counterparts.

The situation in Indonesia is quite different, where the senior officers in that country -- particularly in, again, my case the intelligence area have not had those kinds of interactions with the U.S. military. It does create barriers for close interaction and interoperation. And it's an area -- Southeast Asia in general is an area that needs that kind of attention, and I'm going back to my days in the Pacific Command as a J2 to say authoritatively that more needs to be done there, sir.

SEN. BOND: Thank you.

MS. RODLEY: We really see it the same way as my colleagues have outlined -- Indonesia as the main problem.

SEN. ROBERTS: Speak right into the microphone.

MS. RODLEY: Indonesia as the most serious problem with Jemaah Islamiyah, and to a lesser extent, the Philippines, Thailand and some of the other nations in the region. This is of particular concern because of Jemaah Islamiyah's affiliation with al Qaeda.

So the question of targeting U.S. interests is one that we are very concerned about.

SEN. BOND: Thank you.

Thank you, Mr. Chairman. I apologize to my colleagues.

SEN. ROBERTS: Senator Feinstein.

SEN. DIANNE FEINSTEIN (D-CA): Thank you very much, Mr. Chairman.

Let me begin by thanking each of you. I think those of you that particularly had large departments, it is a most difficult time to give your service. And I just want you to know how much I appreciate it. So thank you very much.

I view a worldwide threat to be our borders. And I'd like to explain that a little bit. Let me begin by quoting Homeland Security's statement today, Admiral Loy, on page four of your statement: "Recent information from ongoing investigations, detentions and emerging threat streams strongly suggest that al Qaeda has considered using the southwest border to infiltrate the United States. Several al Qaeda leaders believe operatives can pay their way into the country through Mexico, and also believe illegal entry is more advantageous than legal entry for operational security reasons."

I think a very important statement, particularly when you consider the fact that a half a million other than Mexican intrusions have been made on our borders since 2000. Specifically, with respect to the southwest border, in 2003 there were 30,147 other than Mexican intrusions. The next year, '04, which is the latest year that we have figures for, there were 44,617. That's a 48 percent increase.

Now, let me take you to a hearing, because I sit on the Judiciary-Immigration subcommittee, and a response by Mr. Hutchinson to Senator Grassley's questions in February of '04. This was a hearing held about a year ago. And let me read an answer:

" At present, DHS has no specific policy regarding OTMs apprehended at the southern border. While OTMs as well as Mexicans are permitted to withdraw their applications for admission and can be returned voluntarily to their country of nationality, as a practical matter this option is not readily available for them as it is for Mexicans whose government will accept them back into the Mexican territory. Thus, when apprehended, OTMs are routinely placed in removal proceedings under Immigration and Nationality Act 240. It is not practical to detain all non-criminal OTMs during immigration proceedings. And thus, most are released. A majority of OTMs later fail to appear for their immigration proceedings and simply disappear into the United States. DHS is reviewing the possibility of extending its expeditive removal authority and means of addressing this problem. DHS is also considering a variety of alternatives to detention, especially for asylum seekers."

Now, I've looked at the statistics for each country and the so- called countries of concern -- Syria, Iran, others; the numbers are up of penetrations through our southwest border.

Clearly, we are deficient in a mechanism to deal with these.

Could you please comment? And could you please indicate what actions are being taken? I view this as a very serious situation.

MR. LOY: Thank you, Senator Feinstein. And indeed, we view it in exactly the same way you do, as a very serious situation. There have been a number of initiatives over the course of the last year, many of which I know you're familiar with. For example, the opportunity for deep repatriation of people back into -- not just across the border where the recidivism rate is that they'll be back -- coming our direction that night or the next night; the whole notion of being able to take the repatriation decision and take Mexican nationals, illegal aliens, back to --

SEN. FEINSTEIN: I'm not talking about -- none of these are Mexican nationals. These are all OTMs, "other than Mexicans" -- 44,000 OTMs came across the Southwest border last year.

MR. LOY: Yes, ma'am. I'm just trying to array a set of tools that could be potentially of use not only in Mexico, but wherever the OTMs might be from.

The challenge here is a lengthy border, as you well know. We are introducing technology along that border that will substitute for what has historically been a very human-intensive effort along the border to make a difference in terms of comings and goings. So US-VISIT; the notion of using UAVs on the border as plugs between those portals of entry that we have worked so hard to harden, if you will; but the Entry-Exit system that has been now deployed by the Department of Homeland Security after, I would offer, 20 years or so of effort on the part of INS beforehand, and failed efforts to establish some kind of a legitimate, biometrically based entry-exit system into the country that we have some confidence in terms of our abilities to say who is here and who is not, and what are we going to do about those that we can track and find.

SEN. FEINSTEIN: Let me have a little discussion on this, because essentially there is no detention for these people. They don't show up for their hearings and they disappear. So we really don't know who comes into this country illegally over that Southwest border. I have two cases that the FBI was involved in; one actually in Michigan where the gentleman was clearly a terrorist. He pled guilty. He got six months.

This is a big problem in the United States, and I really don't think that the mechanical aspect of it is going to solve it. There is -- you're not detaining these people. They're released, essentially.

MR. LOY: Well, there certainly is a prioritization process to those with any degree of a connection against the National Terrorism Database that has now been forged for us to be able to bounce names against. So to the degree we are releasing because of the resource implications attendant to keeping them and bedding them and detaining them until resolution can come of their individual cases, those without any apparent criminal and/or terrorist connection are obviously those that are on the high end of the release order and the low end of the detention order.

SEN. FEINSTEIN: Can you give us a number of how many are being detained?

MR. LOY: I don't have that with me at the moment, but I'll be happy to provide it to you.

SEN. FEINSTEIN: I would appreciate it. Out of the 44,000 that came in in 2004, how many are detained. I would appreciate that.

MR. LOY: We'll provide that.

SEN. FEINSTEIN: Thanks, Mr. Chairman.

SEN. ROBERTS: Senator Chambliss.

SEN. SAXBY CHAMBLISS (R-GA): Thank you, Mr. Chairman.

Director Goss, because of our long-standing relationship going back to our House days, you know how keen my interest has been in this area of information sharing. I was very pleased to hear you as well as Director Mueller say that things are improving. But at the same time, you both recognized we still have a long way to go.

Donnie Haralson, the sheriff of Crisp County, Georgia, happened to be in the back a little earlier, and I visited with him for a minute. He was keenly interested in a number of things that were being said, and I told him that we really can't let this issue of information sharing rest until his office and every other local law enforcement office has the information in real time that they need to help us win this war on terrorism domestically.

So I appreciate the continued effort of everybody at the table on this issue, but obviously especially you two.

Director Goss and Admiral Jacoby, there was a report on Fox News this morning in which it stated that the Iranians have alleged that an aerial vehicle of some sort fired a missile and it did not explode, but it was fired in the area of a nuclear facility owned by the Iranians. Would either of you care to comment on the information that is coming out of Iran this morning relative to that issue?

MR. GOSS: Senator, thank you for your comments about vertical integration of information and your patience on letting us get the technology and our architecture and our enterprise together on that. There is progress since we last talked, and that's good news.

On the subject of Iran, I know nothing in my official position. What I do know is I think from press reports that something did fall out of the sky and came down somewhat near Bushehr. They're ongoing building a nuclear power plant in that area. I also heard a subsequent report -- and I have no idea whether I'm spreading a rumor or not -- that it was a gas tank that fell off an aircraft and exploded, and I have no idea whether that's true or not. It just came into my ear.

MR. JACOBY: Senator Chambliss, I have no knowledge of the report or any incidents involving Iran.


Director Mueller, I have had the opportunity to visit with your Joint Terrorism Task Force folks in Atlanta, intend to do so again in the very near future, and I will tell you I'm very impressed by the work that's ongoing with that operation. Every time I meet with them, I am told by some of your FBI agents in the field as well as other local law enforcement officers of the importance of the Patriot Act in their ability to fight terrorism as well as fight crime with the tools that they have under the Patriot Act.

Now, as you know, the Patriot Act, or certain provisions of it, are going to be expiring at the end of this year. Would you care to comment on what your thoughts are relative to the reauthorization of those provisions that are set to expire and how useful the Patriot Act has been to your organization in fighting crime and fighting terrorism?

MR. MUELLER: I -- let me just start off by saying that the provisions of the Patriot Act are indispensable to the protection of the American public against further terrorist attacks. And the heartland of the bill that is so important -- and it's not just important to the FBI, but it's important to the CIA, the DIA and the other -- others in the intelligence community as well as state and local law enforcement -- is the breaking down of walls that inhibited our ability to share information across our agencies and across our disciplines and across our programs. And the safety of the United States depends on the ability of all of us together to be able to accumulate the information, share the information -- and I don't mean it just in pushing, but having access, equal access to the information, and having the opportunity to act on that information and all the information, whether it be act within the United States in a city, in a town, in a state, or nationally, or overseas, by having access to information that may have been collected within the United States or outside the United States. The Patriot Act has been instrumental in breaking down those walls and enabling us to do it. It has given us new authorities, that has given us the ability to obtain information that will allow us to identify persons who present a threat against the United States with adequate predication of their interests and motivation in so doing. It has given us access to records that we previous did not have but often are instrumental pieces of a puzzle that'll give us a broader vision, a broader view of the intentions of an individual or of a group of individuals in the United States. And I know myself and others who live day in and day out, trying to prevent terrorist attacks, will be here before Congress on a number of occasions asking Congress to please continue to let us have those tools to protect the American public.

SEN. CHAMBLISS: Thank you.

Thank you, Mr. Chairman.

SEN. ROBERTS: Senator Levin.

SEN. LEVIN: Thank you, Mr. Chairman.

Mr. Goss, we were given information in an unclassified basis in January of 2002 as follows. This is the CIA assessment, that "We assess that North Korea has produced enough plutonium for at least one and possibly two nuclear weapons." I'm wondering, director, if you could give us the current CIA assessment.

MR. GOSS: I'm honestly not sure whether or not the assessment is classified that we have, but our assessment is that they have a greater capability than that assessment, that, in other words, it has increased since then.

SEN. LEVIN: Can you --

MR. GOSS: I would also point out there are other agencies that are making assessments, and there is a range. And I think that the range we're fairly comfortable on -- and I know that is classified; I'd be happy to share that with you in closed --

SEN. LEVIN: If you also could tell us, for the record, if there's any unclassified numbers you can give us, for the record, if you can do that. I'm not asking now --

MR. GOSS: Senator, I will. Yes.

SEN. LEVIN: -- if you can give us numbers the way that number was given.

The -- and also, Director Goss, this is for you -- the 9/11 commission included a number of recommendations for realigning the executive branch, including the following: Quote, "Lead responsibility for directing and executing paramilitary operations, whether clandestine or covert, should shift to the Defense Department." Do you agree?

MR. GOSS: I recall the issue very well. I do not --

SEN. LEVIN: Just briefly, do you agree with --

MR. GOSS: I do not agree with that conclusion. We have studied it, and Secretary -- the secretary of Defense and I have a memo, which I anticipate signing today --

SEN. LEVIN: Is that going to be public?

MR. GOSS: Certainly the conclusion of it will be.

SEN. LEVIN: All right. I think as much public as you can make, obviously --

MR. GOSS: It's in everybody's interest to know, I think, how we are dividing up the responsibilities. I can tell you we spent a lot of time looking at this. And the secretary feels that he has capabilities that are important, and I agree. And I feel I have capabilities that are important, and he agrees. There's not a lot of disagreement on this. We just didn't come out at the same place the 9/11 commission did.

SEN. LEVIN: Thank you, Director.

I understand that your CIA's inspector general's report on treatment of detainees by members of the intelligence community is somewhere in the pipeline. Can you tell us where it is?

MR. GOSS: Yes, sir. The --

SEN. LEVIN: And when is it going to be available?

MR. GOSS: The IG, the inspector general of the agency, has indeed got all of the complaints and the referral on that matter in hand. As you know, it's an independent position. I have checked. There is one report that was ordered by my predecessor, which has come back, which had 10 recommendations or so in it. About, I think, eight of those have been done. We're now into the process of looking at some of the specific cases that have been brought to the IG. I cannot tell you what his timetable is, but I'm sure he would be very happy to tell you.

I am assured that the work is ongoing, as it should be, appropriately.

SEN. LEVIN: Well, if he'd be happy to tell us, wouldn't he be happy to tell you and --

MR. GOSS: Sure.

SEN. LEVIN: Well, what is the timetable? I mean, is there a time --

MR. GOSS: I haven't asked him what day he's going to finish all these cases.

SEN. LEVIN: Or a month?

MR. GOSS: As soon as they come -- are through. I know one case has been dismissed. I know one case has been prosecuted. You've read about it in the paper -- in North Carolina. I know there is still a bunch of other cases.

What I can't tell you is how many more might come in the door.

SEN. LEVIN: Okay. Thank you.

Director Mueller, this is for you. It relates also to the interrogation question.

The FBI documents which were released under a FOIA request, include e-mails from FBI agents expressing their deep concerns that during late 2002 and mid-2003 that overly aggressive and coercive interrogation techniques were being used by the Defense Department people at Guantanamo's detention facility, which, quote, "differed drastically" from the FBI's authorized practices.

Those memos describe the Department of Defense's methods as, quote, "torture techniques," expressed disbelief over the military's interviews telling their colleagues back in Washington -- this is in the FBI -- that, quote, "you won't believe it," close quote.

The FBI agents also described heated exchanges and battles with the commanding general at Guantanamo over the Department of Defense's interrogation techniques, which FBI agents, quote, "not only advised against, but questioned in terms of their effectiveness." Incidents described included detainees being chained hand and foot in fetal positions; no chair, food or water for long periods; ended up defecating on themselves. One detainee apparently had been literally pulling his own hair out throughout the night.

Another major concern of the FBI agents present at Guantanamo was that Defense Department interrogators were impersonating FBI agents in order to gain intelligence. FBI agents were deeply worried that should detainees ever publicly report their treatment at Guantanamo, that the FBI would be left, quote, "holding the bag," close quote, because it would appear, falsely, that, quote, "those torture techniques were done by FBI interrogators."

Those documents make clear that the FBI was so concerned about Department of Defense's interrogation techniques that it issued guidance to FBI agents at Guantanamo to stand clear and to keep away from those techniques when the DOD took control of interrogation.

I assume that because of the serious and extensive objections that were lodged by FBI agents against those techniques, and particularly given the heated discussions at which your personnel were present and engaged in, that you or your senior advisers were aware of the concerns of those members of your staff.

And I'm just wondering -- this is my question -- did you raise those concerns with either senior officials at the Department of Defense, the attorney general, or the head of the Criminal Division at the Justice Department, or higher-ups in the administration, including the National Security Council?

MR. MUELLER: Senator, I know that those concerns were raised with the Department of Defense by persons within the FBI -- at least some of those were; at least three incidents -- early on. Certainly after the issues were raised about Abu Ghraib, there were additional memoranda that were generated as a result of an inquiry to the field that you may have been alluding to there. Those also have been brought to the attention of the military.

I will also say that our inspector general is doing a review of when the information came in and what happened to that information once it came in to the FBI.

SEN. LEVIN: So you personally did not raise those concerns with senior officials at the Department of Defense or with the attorney general or the head of the Criminal Division?

MR. MUELLER: I was not aware of those concerns until May of 2004.

SEN. LEVIN: Thank you.

Thank you, Mr. Chairman.

SEN. ROBERTS: Senator Snowe.

MR. MUELLER: Let me just be precise on that, Senator. I was not aware of the concerns that you raised with regard to -- that you allude to there in Guantanamo until May of 2004.

SEN. LEVIN: Thank you.

SEN. OLYMPIA SNOWE (R-ME): Thank you, Mr. Chairman.

I want to welcome all of our panelists here today.

Director Goss, just to follow up on one of the questions that the chairman raised with respect to A.Q. Khan, there's no question that he masterminded a far-reaching, wide-ranging, global-in-scope operation in disbursing nuclear information, activities and technology. Have we pressed the Pakistani government to allow a U.S. representative to directly have access to A.Q. Khan for questioning to determine the extent of his network of illicit nuclear activities?

MR. GOSS: Senator Snowe, I want to be very careful how I answer your question. I think my definition of "pressed" and yours would be the same, and I would say yes. I can tell you that there is continuous attention to this matter, and I believe that it is being done with the necessary urgency and fortitude to make sure our interests are completely understood.

SEN. SNOWE: So could you characterize the cooperation on the part of the Pakistani government as sharing information?

MR. GOSS: Yes.

SEN. SNOWE: Because I think it is disconcerting -- I'm sure you saw the article in Time Magazine recently, and citing a source close to the Khan research laboratories in Islamabad. And he's quoted as saying, "Even though its head has been removed, Khan's illicit network of suppliers and middlemen is still out there."

MR. GOSS: Senator, in about two minutes in a private conversation, I think I could satisfy your answers to these questions.

Let me just simply say there is an understanding that A.Q. Khan enjoyed a certain amount of celebrity status in his country because he was the man who brought them the bomb, which was very critical to that culture and their national pride, and so forth. It has been a difficult prospect, and understanding the problem they are having to deal with is useful in negotiating our interests, which are to get all the information possible. I think that those discussions are understood, and appropriate steps by the right people are being taken place. I can be more specific in private.

SEN. SNOWE: I appreciate that.

Admiral Loy, I'm sure you're familiar with this report from the inspector general of the Department of Homeland Security regarding the visa waiver program and the use of stolen passports from the visa waiver countries. And it's pretty troubling and disconcerting to the extent to which aliens have applied for admission into the United States with stolen passports from these specific countries and have been admitted, even when information has been submitted to the Lookout System. All the more disconcerting, I think, when you consider, and I think we all agree, the greatest threat to this country is having terrorists have access to nuclear weapons or the materials to manufacture them.

And this report indicates, and I quote, "Aliens applying for admission to the United States using stolen passports have little reason to fear being caught and are usually admitted. Our analysis showed that it only made a small difference whether the stolen passports were posted in the Look Out system." They reviewed two groups. The first group, 79 out of the 98 aliens attempting entry were admitted. The second group had lookouts posed for their stolen passports prior to their attempted entries, and from the second group, 57 out of the 78 aliens who attempted entry were admitted. Thirty- three of these admissions occurred after September 11th, 2001. And then 136 successful entries using stolen passports were allowed.

I mean, obviously, this is significant, and disturbing, to say the least, that obviously we haven't made much headway with respect to this issue regarding stolen passports, when you think that worldwide there are 10 million stolen passports, it only takes one to gain admission into the United States. You know, when you think about the fact that on June 6, 2001, according to this report, 708 blank passports were stolen from a visa waiver program, the IG reported that this was significant because the passports were stolen in the city that also was the location of the al Qaeda cell that played a significant role in providing financial and logistical support for the September 11th terrorists.

It's interesting as well because there is little attempt by law enforcement officials to follow up and to try to locate those individuals even when they have learned -- even when officials have learned that they have come into this country illegally.

So, one, what are we doing to investigate these activities of these aliens who have used stolen passports? What are we doing to determine their whereabouts? And what are we doing to improve our ability to locate, investigate and remove these individuals from the United States who have stolen passports to gain entry?

MR. LOY: Thank you, Senator Snowe. It's a very serious issue. The ICE agency is following up dramatically as a result not just of the IG's investigation, but rather of their recognition of this -- I'll call it a chink in the armor, so to speak. We must recall that of course over the course of a couple of hundred of years of our country's openness to people coming to our borders, our exit-entry control system attendant to those borders was, frankly, very weak. The fact that within the last year and a half that we have established US-VISIT as an entry-exit control system, that we have engaged internationally to try to use Interpol as a database storage for stolen passport information so that there's a database that can be used internationally, not just by folks of concern coming to the United States, but crossing any borders anywhere. The visa waiver program in and of itself now is required -- any folks coming into our country from visa waiver countries go through US-VISIT and we begin to gain the biometric value of the fingerprints and the facial imagery that we capture as they come into our country each time they enter.

We are conducting reviews of the visa waiver countries as we speak. There are 25 of the 27 countries being reviewed, as the Congress requires biannually with a report due back to provide you a solid status report on the visa waiver countries as it relates to the issue that you're describing.

Furthermore, that review process always has the opportunity for sanctions attendant to it as to whether or not one stays in the visa waiver program at the other end of the day. There have been rather dramatic public reflections of both Germany and France and other countries having this nightmarish problem of not tens or twenties, but literally thousands of their brand-new machine-readable passport blanks finding their way into the status that you were describing.

So it is a significant international issue that we're trying to fight on all those fronts.

SEN. SNOWE: Well, it's clear that we need to do something very expeditiously --

MR. LOY: Including the enforcement --

SEN. SNOWE: -- it seems to me. I think it's a huge challenge and the countries (better be ?) cooperating in that regard.

MR. LOY: Exactly.

SEN. SNOWE: Thank you, Mr. Chairman.

SEN. ROBERTS: Senator Wyden.

SEN. WYDEN: Thank you, Mr. Chairman.

And gentlemen, sorry, we've got multiple hearings going on this morning and I didn't get to hear all of your testimony, but I did understand that several of you made the point that information sharing is improving. And I will tell you that I'm still concerned that the walls that have prevented information sharing still have not been brought down. And To some extent what has happened, the pre-9/11 walls that prevent information sharing seem to have been replaced with a new set of walls that prevent information sharing. I want to give you an example that revolves around the area you-all talked about, the National Counterterrorism Center, NCTC, where you all feel things have gotten better.

Now our committee has been told that while information can be shared among those who work at the center, an analyst has to go out and seek approval before sharing information that may be of value with the home agency, and the approval may or may not be granted, and it's sort of a bureaucratic shuffle to get it done.

My question would be to you, Director Goss. Are you aware of the problem? And if so, how do you believe that ought to be addressed? This is something that our committee has heard about now several times, and it sort of caught my attention when you all were talking about information sharing improving. Director Goss, do you have a response?

MR. GOSS: Yes, I'd be very happy to, Senator. Thank you.

I do believe that the -- across the board information sharing is improved. There are still areas, and this is one of them. In -- as you --

SEN. WYDEN: I want to make sure I got that. You -- so this is an area that you will still be willing to work with us on?

MR. GOSS: Oh, absolutely. This is not finished business yet. We have a question of how do you protect an individual agency's sources and methods? How do you get assurance for that agency when they are making a contribution? And the question of how we use either TAGINTs (ph) or TERELEINs (ph) or how we make this available is easier if you're just talking about a customer. But if you're talking about an analyst that wants to go further in and probe further and perhaps do tasking, then you come to the questions of some of the things we're trying to use like co-location, getting the analysts and the collectors to talk together, changing things with agencies, setting up different rules.

Part of that is going to be the business of the new DNI. As you know, the NCTC reports to the DNI, and the NCTC is now run very, very effectively I would say, but on an acting basis, by John Brennan. They have absorbed the TTIC into the NCTC, and I think they've gone just about as far down the road as they can go without stepping on the prerogatives of a new DNI whose main function, in my view, is going to have to be sorting out the authorities and the interface between the DNI's job and responsibilities and the individual agencies and those interfaces between the 15 agencies in the community because until you do that and make those lines clear, the question of sharing proprietary -- and excuse me for using the word, but it does fit -- information is going to be difficult because everybody is charged with preserving their sources and methods.

SEN. WYDEN: I think what concerns me is that there are a finite number of people working the terrorism issue for the entire intelligence community. They all hold security clearances, they're all trained. And it just seems to me that these analysts ought to have access to all the information that can help our side.

And I would like to talk about this with you all further, talk about it more, perhaps, in private -- in our private session. But it seemed to me what we ought to have is the equivalent of a terrorism analyst program, a special terrorism analyst program that would allow all of these analysts access to all the same data. And until we get there, we're still going to be trying to break down these walls. And time is short; we'll talk about it some more.

But I think, Mr. Director, your answer is constructive. The acknowledgement that is there more work to do is what I was interested in hearing. It just seems to me there's only so many people in this community; let's make sure they all can get access to the same kind of information. And there's an awful lot of shuffling going on just with NCTC, and I'm just not going to take this further. But I saw Bob Mueller nod, and I consider that constructive as well. (Laughter.)

The second area that I'd like to touch on involves accountability. And if there's one thing my constituents are frustrated about as it relates to government, it's the absence of accountability. And still after 9/11, I keep looking for anybody who lost a job, was demoted, was reprimanded, any kind of consequences, and I can't find any. I can't find any anywhere. And my question would be to you, Director Goss, in that you all apparently have a report from the inspector general as a result of input from this committee, the joint inquiry on the terrorist attacks where there was clear interest in the inspector general conducting a review to determine if any CIA officials ought to actually be held accountable for the mistakes that led to the attacks, and I'm trying to figure out where this inspector general report is. I gather there are just layers and layers of review. But where are we on this inspector general report? What can you tell us today? When are we going to get it on this committee so that we can get serious about some accountability?

MR. GOSS: Senator, thank you.

You will get the IG report as soon as it is finished.

I made the same pledge yesterday to HPSCI. It was commissioned, I think, by Congress and you will get it. And the IG is independent.

Now, as for where is it right now, the IG came to me shortly after I came in and said that this matter was under review and he would be presenting it shortly to me for the next step, because there is a process apparently in how this works. And I asked a very simple question. I said, if you are naming names, are you giving those named the opportunity to express their views? And it turned out that in the process he had not taken that option. I suggested to him that in the interest of what I would just simply call American fair play, that if you're going to start bandying peoples names about you might let them know what it is you're saying about them. And he agreed. I did not instruct him to do that. Please understand. We just had a discussion about how this process would unfold. This is somewhat new. And so I understand that he has done that and individuals have been advised of what this report says about them on a confidential basis.

I also understand that some of these individuals have hired attorneys, because they wish to, for whatever reason, have that kind of advice. When attorneys come into the issue like this, I understand that the timing becomes a little uncertain of when matters will be concluded. I do not feel it appropriate for me to demand a deadline at this point, since the process has elements of due process in it. And I view that the IG is capable of making the decisions of when he's ready to present that to me. That has not happened at this point. When he does, I have already got two staffers I've selected who are in the process, or have -- I suspect have probably read the report. So it will be able when it comes to my level as the director of the Central Intelligence Agency to decide whether or not it is appropriate to convene boards in the agency in house to deal with accountability or not. And that is apparently what my responsibility will be. Either way, this committee and the other oversight committee, the House oversight committee, will get the IG's report. And it is understood, it will be classified.

SEN. WYDEN: Do I have time for one additional question, Mr. Chairman?

SEN. ROBERTS: I think Senator Mikulski has been waiting very patiently throughout the whole hearing, and if we have time for a second round, I would be delighted to recognize the senator. And I don't mean to pick on him in that most senators have had non-red. I think I'll probably leave that comment alone.

The patient but always accommodating senator from Maryland.

SEN. BARBARA A. MIKULSKI (D-MD): Patient. (Light laughter.) Yes, a signature characteristic of myself well known to all. (Laughter.)

Good morning and thank you, really, for what you do every day. I think all of us appreciate the fact that the job of everybody here is to prevent predatory attacks against the homeland, against U.S. assets abroad, against our troops, and even to help protect predatory attacks against allies.

I want to focus on the issue of terrorism and want to come back to this whole issue of how we've gotten better at connecting the dots and focus really on threats to our ports.

So these are really questions for Directors Mueller, Goss and Admiral Loy.

There's considerable concern that sea-based or ship-borne terrorist attacks are big concerns and possibilities. Many analysts are concerned about the security of U.S. ports, foreign ports -- but in my case, like Baltimore, and other coastal senators.

So my question is, what action has -- of the various scenarios, what -- do we fear attacks on our ports? Do we fear nuclear weapons being smuggled in and detonated at a U.S. port? And what are we doing about it? And how do the three of you work together?

And Admiral Loy, of course, we know you from your Coast Guard days and you've adapted to a new transportation mode pretty quick. But you see where we are. So there's Goss, you know, looking at the world; and you know, Loy's got Mr. Homeland Security; and there's Mueller and he's got the domestic whatever. So where are we on the threat to the ports, and what are we doing to prevent the threat? And how do you all coordinate this information so that governors and mayors and the people can feel pretty good about it?

MR. GOSS: Thank you, Senator. I'll start.

I will tell you that my normal day starts in the company of these two gentlemen and matters of this urgency are discussed between us. But not only that, we have close working relationships between our agencies. And it is well understood the danger that you speak properly.

In terms of our part from the National Foreign Intelligence Program, obviously leaning overseas and getting all the information we can to stop it over there and to get information before something's put on a ship or to understand a plot is very, very important.

I would point out, somebody can correct the statistic, but it's a very high percentage of success, perhaps 95 percent, of all drug interdictions come from good tips from information, not from random searches.

But, you have to do the gates/guns/guards approach domestically to take care of the porch, and you have to do the information approach. Am I satisfied they're as plugged in as they can be? Yes, under the circumstances that we have. Now, with the DHS and with the FBI, law enforcement people, people with new responsibilities dealing with homeland security and our very clear understanding that this is part of the target for our operatives overseas, I think we have done as good as we can do in terms of understanding information --

SEN. MIKULSKI: But no -- but I appreciate that the three of you meet. But I'm talking about all the way down, are we really communicating. Please, the other two gentlemen.

MR. MUELLER: I think it goes pretty far down for us.

MR. JACOBY (?): Well, the -- for us, in every city that there's a port, there's a Joint Terrorism Task Force with the specific responsibility to work closely with the elements of the port, to exchange information and provide what can be done to enhance the port security. In several other ports around the country we have -- particularly where there's substantial ferry traffic, for instance, we have done intelligence analyses, the vulnerabilities of the ferry services, there -- each port has a little different mixture of type of shipping that comes in. And consequently, the Joint Terrorism Task Force is working with the Coast Guard and other elements, work closely with state and law enforcement as well as the other federal components to come up with a plan to assure that we had the intelligence that's necessary to focus on the threat of a potential attack, and then, if there's attack, how we are going to respond to it. And perhaps I can turn that over to Admiral Loy to pick up on.

MR. LOY: Thank you, Senator Mikulski. The information flow into this challenge is as was just described by Director Goss and Director Mueller. At the other end I would offer that the chair I was sitting in on 9/11 was still in uniform as the commandant of the Coast Guard. And frankly, we spent the rest of the time that I was in that great service focusing on domestic maritime strategy, domestic maritime security strategy. We also recognize that it was enormously important to see that this was an international challenge immediately, because all of those 9 million containers a year, 20,000 a day, that find their way to Baltimore and many other ports come from overseas. And so, one of the first things we did was literally take a delegation to the International Maritime Organization to start a process which has become a standard-setting effort for international commerce as it relates to facilities, crews, ships that ply the waters of the United States to meet those international standards.

Secondly, there have been excellent resource plus-ups attendant to the Coast Guard's capability to shift gears from emphasizing what it has always been able to emphasize as an array of responsibilities it has for the nation and focus on port security in this particular time of need. I think one of the greatest strengths of that service is its agility to reshape its focus on what the nation needs it to focus on now, and it certainly has done so over the course of these last three years.

We have also recognized the legitimacy through port security grants and Osupply chain, literally from the point of origin to the point of destination with a sense of transparency all the way through that in order to see and be able to reply to insights we gain from the intelligence community as to what we should be doing operationally in those various responsibilities. The notion of pushing our borders out so that they don't become the first portal that we look at things under concern about, the Container Security Initiative, as I mentioned in my opening comments, is now alive and well in 34 different ports, where Customs agents side by each with their host nation counterparts are watching the stuffing of those boxes, the sealing of those boxes as it relates to cargo security.

One of the most dramatic initiatives that we had already underway for what then Vern Clark and I, as the chief of Naval Operations, viewed an asymmetric array of threats which shifted focus to the terrorism piece of that asymmetric array after 9/11, had already been underway in Suitland with a joint effort with respect to intelligence reviews that the two seagoing services of this nation jointly conduct there day after day after day. That has -- that has developed into two initiatives that -- today, one of them attendant to something that I term maritime domain awareness and has become almost a term of art in this look that the two services take. With NORCOM's responsibility reaching 500 miles out to sea on the Pacific side, and literally almost 1,700 miles to sea on the Atlantic side, we have joined forces, the Navy and the Coast Guard, to truly understand what's going on and how do we assure that we know what's going on in the domain we're responsible for. So --

SEN. MIKULSKI: Let me -- let me come back. First of all, this was really, I think, very helpful and, I hope, enlightening to the committee. I know my time's up, but number one, how real is this threat? And number two, Admiral Loy, you're the -- Homeland Security is the ultimate user of the intelligence, the ultimate customer, of course along with the FBI. But, you know, your Coast Guard, your Customs, your right -- because you're -- that's the battleline. Feb 16, 2005 17:35 ET .EOF

ADM. LOY: We hold the bag, yes, ma'am.

SEN. MIKULSKI: Yes. And how do you -- one, how real is this threat? And number two, do you really feel that what has been described is really working well?

ADM. LOY: The gathering and the sharing of the information is, I think, working extraordinarily well in this particular domain. I think, to go back to the chairman's commentary about information access as opposed to information pushing and the comments that the vice chairman made attendant to that are absolutely right on point. We discussed though there are just two operatives. You talked about the analyst, and you talked about the collector. And I would offer that the operator is the other absolutely crucial ingredient to keep in the algorithm. The requirements that the operator can express to the collector and the analysts go a long way to figuring out the workload of those people on any given day, any given week, for any given purpose or project. So I would ask you to recognize that, have the operators articulate their requirements, those things that they're going to be able to use properly to do the work they're required to do. Let the analysts and the collectors then get about that business to meet those operators' requirements.


ADM. LOY: The threat is as real here. We have the same kind of exercise program to think our way through the nightmare scenarios on the maritime sector as in any other sector. Ports represent that place where it all comes together. Ninety-five percent of what comes and goes to this country comes and goes by the water, so the port complexes are clearly a targeted area for the terrorists.

SEN. MIKULSKI: Mr. Chairman, I presume my time was up. That was a lengthy conversation, but I think really is crucial, because that's where it all comes together.

SEN. ROBERTS: As usual, the Senator raises an important point. Has the senator finished her comments?

SEN. MIKULSKI: I think my time's up.

SEN. ROBERTS: The distinguished chairman of the Senate Armed Services Committee.

SEN. JOHN WARNER (R-VA): I thank you, Mr. Chairman and the ranking member. We've had a good hearing. I'm sorry I had to step out for a moment.

Sixty years ago this month, at age 17, I started my very modest and inauspicious military career. And I've had over a half-century of the privilege of being associate with the men and women of the United States military. And this afternoon, like so many of our colleagues, I go to Arlington for the burial of a brave Marine who lost his life in Iraq. And as I sit through these ceremonies, quietly, the thought always occurred to me: "Senator, have you failed to do anything in your official capacity either to equip or train this individual or to provide him the intelligence or his superiors the intelligence which could have prevented this death?"

And there's an issue out here, I say to my distinguished chairman and ranking member and colleagues on the committee, which I think we've got to address both in my committee and in this committee, and that is the manner in which we gain intelligence from those that are captured, either on the battlefield or in other areas. And there's been a good deal written, and I draw the attention of my colleague to an article today in the New York Times entitled, "CIA is Seen as Seeking New Role on Detainees."

And so my question to you is as follows: America has always been a nation that follows the rule of law, and we must preserve that. And the Geneva Convention, as such, is a part of our body of law. But we recognize other nations have other laws, traditions, whatever, and there could well be means by which they gain intelligence which we can't, following the rule of law. And I'm not suggesting we deviate from the rule of law. But when an individual's apprehended in Iraq, should we turn him over to the Iraqis, who may have a different system, and from the individual, we gain information that not only preserves the opportunity to protect our coalition forces, but indeed the terrible and tragic killing of so many Iraqi citizens and their own security forces.

I think largely this issue has to be addressed in closed session. But I wonder, Mr. Director, to what extent you can talk about what your hope is in this area to gain the maximum intelligence that we need to not only bring to hopefully a successful conclusion of the Iraqi campaign, but other campaigns on other fronts, and at the same time, we carefully preserve the traditions of this country of following the rule of law? And most specifically, what should we do in dealing with other countries in terms of sharing the burdens of captivity and interrogation of a witness or captive or whatever we may have in our possession. And then I'll ask the Department of State, Mrs. Rodley, to give the views of State on that.

MR. GOSS: Thank you, Senator. I very much appreciate -- the subject is of critical importance to us. You are correct to point out that we are dealing in a life-and-death business, and you are correct to point out that interrogation is a main stream of information. Having enough professional interrogators operating the proper way -- that would be within the rule of law -- and professional interrogators will tell you that torture is not something they would wish to have, because it doesn't work. There are better ways to deal with captives.

So I don't think there is any inconsistency with the idea of professional interrogation of combatants, whether they're conventional or unconventional, taken off the field of hostility and brought into our captivity, being subject to professional interrogation. I do not think that's an impossible job.

The question of who does it under what circumstances does get us into some legalities. I'm not an eternity -- a lawyer, an attorney, and I will obviously be guided by what they say. But that is not going to be a deterrent to a professional program. It's just going to affect the mode a little bit.

Clearly, as Americans, we are concerned with legalities, rule of law. We are concerned with human rights, because we are compassionate human beings, and what we stand for is what we're fighting for. And we're not going to abrogate that.

We have an immediacy of protection of forces and protection of innocent lives in the interrogation process. We do not want to forego that opportunity, nor would we ask another country to do something that we would not do ourselves, as a cute way of end-running our commitment to the law and decency.

I believe that we have most of that in hand. There are some parts of that that I cannot answer with you yet, that are sort of down-the-road pieces of it that I need to talk to you about in closed session.

But if you asked me today, is interrogation vitally important to saving lives and disrupting terrorists and protecting our forces, the answer is unequivocal: yes.

If you are asking me today if we are handling interrogation within the proper norms and bounds, the answer is yes.

If you are asking me today if I would like to get more information from some of our captives that I still think have information we would like to have, the answer is yes.

And if you ask me would I like to have more captives tomorrow to interrogate, the answer is yes.

SEN. WARNER: Let's take it to one last subject. When you're given the option that you could transfer this prisoner to another nation, recognizing that nation employes methods different than we, how would you deal with that?

MR. GOSS: I would require safeguards if that captive were going back either as a non-interrogee or as an interrogee. If that individual being returned to a nation -- a judgment should be made that nothing beyond, I would say, due process punishment, if that is deserved, would happen to that individual, even though they may not have the same standards in that nation.

As you know, many nations will claim their citizens back. And we have responsibility of trying to ensure that they are properly treated, and we try and do the best we can to guarantee that. But of course once they're out of our control, there's only so much we can do. But we do have an accountability program for those situations.

SEN. WARNER: Thank you.

(Off mike) -- Rodley?

SEN. ROBERTS: Senator Bayh.

SEN. WARNER: Oh, I hadn't finished.

SEN. ROBERTS: Oh, I beg your pardon.

SEN. WARNER: Could -- (off mike) -- the other witness from the Department of State give the perspective of the department?

SEN. ROBERTS: Certainly.

MS. RODLEY: Thank you, Senator Warner. One of our key policy goals in Iraq obviously has been to build and to build up institutions in Iraq, government institutions, government services that will adhere to the rule of law. This a long-term process. Mr. Goss' agency has been involved in this project with us in the stand-up of the new Iraqi intelligence service.

It's a long-term process, obviously, but we are of course heartened by the results of the election in Iraq, and we are following closely the formation of the new government there. And we are hopeful that the new government in Iraq will be a government that respects the rule of law, and that the Iraqi people, who suffered horribly for a long time under a brutal dictatorship, won't be subject to the kind of abuses that routinely went on under Saddam Hussein.

So I wouldn't automatically assume that detainees turned over to the Iraqi services now would suffer the same fate that has been the case very commonly in the past.

SEN. WARNER: Mr. Chairman, if I could just ask a question for the record, such that they can, I guess, given my time's up, have to answer it for the record.

But I'm following carefully initiatives by Secretary of Defense Rumsfeld as he begins to augment his gathering of intelligence which he deems essential. And frankly, thus far in my examination, he's acting within the guidelines of the law, including the newest law that passed the Congress, in establishing a greater ability to collect I think largely tactical intelligence.

And if the director would provide for the record his views, because I'm sure you're following this, and as to whether or not you are of the mind that he is acting within the bounds of the law and not in any way in conflict with the objectives of the new law in establishing these units.

The distinguished chairman and ranking member have begun to look at this.

Both our committees have had hearings or briefings on this subject, and it's a matter of active consideration here on the Senate side. You'll have to take it for the record, because I don't want to --

MR. GOSS: I'm very happy to answer if the time is permitted.

SEN. ROBERTS: Let me just say that the distinguished chairman has asked a question that I was going to ask in reference to the encroachment stories that we have seen, both in reference to the FBI and the Department of Defense in augmenting their intelligence operations in cooperation with you -- you don't look encroached upon as of this morning -- and that we have had a hearing with Admiral Jacoby and with Dr. Cambone in the Intelligence Committee about Title 10, Title 50, and the legalities involved.

They have, in fact, kept the committee informed through the staff and through this hearing. But I do think that if you could submit that answer to the record for the chairman, I think it would be very helpful, because I think this is a subject we're all interested in.

SEN. WARNER: Thank you, Mr. Chairman.

MR. GOSS: Mr. Chairman, Mr. Chairman, I am completely comfortable with where we are in terms of forward-leaning efforts by all of the elements in the intelligence community to do the best they can with the missions that we have been assigned. It is quite clear to me that there has been a lot of speculation and "RUMINT" and so forth and comment in the paper, which is unfounded or badly founded.

The truth is that I believe that the efforts that the Department of Defense is trying to undertake are entirely appropriate. They are looking forward to the best ways to get the information they need to accomplish their objectives with the maximum protection for their war- fighters. I think that is excellent.

What it involves is some coordination overseas and some understanding about who's doing what, where. I go to the analogy that the leader of our country team in any overseas situations is the ambassador, the chief of mission. But the person who is normally in charge of intelligence, all intelligence activities, is the representative of the Central Intelligence Agency.

That does not mean there's no other intelligence going on except under the Central Intelligence Agency's immediate direction. It means it's coordinated there. And I believe that we understand that -- those details in some cases yet to be worked out, because there is forward leaning, which we have not seen before, which is entirely appropriate.

I can say on the domestic front exactly the same thing. There has been a lot of story about who is doing what. There is no question that the intelligence community has the experience to do. It's the national foreign intelligence program overseas. And there's also no question that occasionally agencies like the FBI need to be overseas doing things that they do very well in pursuit of their role in counterterrorism. We ask that it be coordinated.

Equally, I think that the FBI wants to be assured, as do I, that we are not usurping our authorities in the domestic homeland. We all know Americans do not spy on Americans, and that's our mission and that is our absolute pledge. It is equally true, however, we need some support. We do have a support base that we use in the United States.

It is critical that we keep that coordinated with Director Mueller. These are questions of working out details. Perhaps DNI would have done it faster than we are doing it. But I frankly think we're doing it quite well, considering we've got 15 agencies doing very intense things that they haven't done before. And I realize that the DCI, which is one of my titles, is an endangered species. But I will be handing off my thoughts to the DNI, and my thoughts are forward leaning by all agencies is good and we can coordinate it and make it work.

SEN. WARNER: Mr. Chairman, I'm very impressed by the responses you've given to both of my questions. I wish you well, and we're fortunate you've taken on this task.

MR. GOSS: Thank you, sir.

SEN. WARNER: You could have been basking in that sunny clime of Florida. (Laughter.)

MR. GOSS: Thank you, sir.

SEN. ROBERTS: Senator -- pardon me -- Senator Bayh.

SEN. EVAN BAYH (D-IN): Senator Warner, sometimes the heat in Washington is just as warm.

Thank you very much, all of you, for your service to our country. I really do appreciate it. These are issues of profound importance, the resolution of which is often not clear. I wouldn't be surprised if all of you didn't lose a significant amount of sleep over your service to our country in dealing with what you're dealing with. So I thank you for that.

I also apologize, Mr. Chairman, to you and the panel for having to shuttle back and forth. Alan Greenspan, Chairman Greenspan, was testifying before the Banking Committee today, so we are trying to simultaneously deal with our nation's economic security and prosperity and our physical security here. So I apologize for my absence.

Let me begin by asking a question that involves credibility. And I want to make very clear that it doesn't involve personal credibility. No one would question any of your personal credibility. But I think we do have a national credibility problem.

And so what I want to ask specifically is, for the Americans watching us today and hearing about assessments involving Iran and North Korea and what is maybe going on there that could be threatening our country, what has improved over the last couple of years since the assessments about weapons of mass destruction in Iraq that would give greater assurance to the American people that what we're hearing today is accurate?

Without getting into obviously classified specifics, have our collection capabilities improved significantly? Have our analytical capabilities improved significantly? Why should people place credibility behind what we're saying here today, given the history with regard to WMD in Iraq?

MR. GOSS: That's actually the perfect question, and that's what we do. That's, I think, why we all go to work. How do we take what we're using and make it better and more appropriate? And I think I can report back that we have more collectors, better technology being properly applied, more focus in the application, more analysts who understand the language, who understand the pitfalls of group-think, more systems that put this together to make the information come out more timely, more flexibility in our systems to deal with problems as they pop up -- and the nature of our enemy is pop up quite often -- and a greater understanding of each others' problems.

We have all walked a little in everybody else's shoes, and I think we see it a little differently. And I think that that's been a helpful exercise. We need to get on with the architecture of what the community is going to look like, and we need to make sure that each unique contribution of each of the elements of the community is provided for in a way that it is still unique and adding value to the total product. I think that we are moving well.

SEN. BAYH: Are we encouraging contrarian analysis? You mentioned group-think.

MR. GOSS: Indeed we are, and we're publishing it too, right on the same page.

SEN. BAYH: Any of the rest of you care to comment about capabilities having improved? If not, that's okay too.

ADM. JACOBY: I'd like to just echo the director's words and talk about a couple of other things, processes; the process that you bring the different views together, processes that have made more sourcing of information available as we go to community products; and in my agency, a tremendous emphasis on training and retraining all the way through the senior levels to make sure that we are reinforcing good analytical, logical, source-utilization kinds of capabilities that are available to us.

SEN. BAYH: Thank you. Yes, Director Mueller.

MR. MUELLER: I would say our capabilities have dramatically increased. We had a little bit over 1,300 counterterrorism agents before September 11th. We now have 3,000-plus. We're up to -- we've established an intelligence directorate which has a total complement of 3,787. Of those, 438 are agents, 490 translators, 2,273 analysts.

We have in each of our field offices a field intelligence group that was not there before. Our ability to obtain the intelligence, analyze the intelligence and getting the intelligence to the operators has improved dramatically since September 11th.

SEN. BAYH: One of the things I think we've all realized, that in some of these areas there is just an irreducible level of ambiguity. And we try and minimize that, but in some of these areas it's still there. And so a certain level of humility in reaching conclusions is in order on all of our parts.

Let me ask you about North Korea and what you assess to be the likely reaction to our current strategy for North Korea and the role that China might play. And first, just let me back up for a second. At least in 2000, with regard to their plutonium effort, it seemed to have been in statis.

Now, they may have been cheating on the uranium side, but cameras were in place; those have been removed. Inspectors were in place; those have been removed. There are published reports that plutonium has been reprocessed and possibly devices have been created. There are even published reports that perhaps in some other areas they may have proliferated.

This is not a happy course of events over the last several years. And at least the initial strategy, which seemed to be threaten and ignore, does not seem to have worked too well. Now, we currently have a strategy of engagement through the six-party talks, trying to encourage the neighbors to take charge of their own neighborhood.

My question is, what do you assess the North Koreans' likely response to be to our current sort of sticks-and-carrots approach, number one? And number two, might a cynic not think that China, which is in a very good position to be helpful on this, that there might be an interest there in not resolving this problem, because as long as North Korea is there and of concern to us, that gives them leverage over us in a variety of other areas?

So my question is, what do you assess the likely response of North Korea to our current approach? And secondly, how do you assess the role that China will play in trying to reach a positive conclusion?

Director Goss.

MR. GOSS: I'm going to try and avoid a policy comment. My view is that we are seeing what is the traditional bluster diplomacy by North Korea, trying to threaten something terrible and get something for it concrete back. They're dealing with nothing to get something, and they do it very effectively. And this has been their MO, in my view.

As to their response, I think that their response is predictable. They are going to continue to do what they want to do. Their number one goal is survivability of the regime, and that is where they are going to go. Whatever it takes, that's what they'll do. How ridiculous they look on the world stage does not seem to bother them.

SEN. BAYH: Can I -- forgive me for interrupting, Director. Is there anything in your estimation, or anybody else's estimation, that could convince them that the survival of their regime, since that's their top priority, is inconsistent with the creation and possession of nuclear weapons? They seem to have concluded that those two things have to go hand in hand. What, in your estimation, could lead them to a different point of view?

MR. GOSS: I do not know the answer to that question. I just simply don't have that information. I could make a guess and say for them to be relevant, they feel that they have to be in the nuclear club.

There is another aspect that's practical, and that's the way they make their money. Their bread-and-butter money is selling this stuff, proliferating.

The Chinese response that you asked -- I think the Chinese understand they have got a very troublesome child right there in the nest of the family, and they can't go anywhere. The real estate's not going to change. They've got to deal with the problem. They have border problems, refugee problems, all kinds of things.

I think the Chinese are genuinely interested in not having this be a worse problem. Now, I'm not going to practice diplomacy. I'm going to yield to the Department of State. Much of that was my personal view and not an informed intelligence response.

SEN. BAYH: Thank you, Director. Yes.

MS. RODLEY: I'm just going to pick up on that point about the Chinese. I agree with that assessment, that the Chinese are genuinely interested and have concluded that it is in their interest to resolve the problem with North Korea. We don't see any indication that they think it is somehow in their interest in dealing with us to have North Korea continue to be --

SEN. BAYH: They've seemed to be in denial for such a long time. I'm glad they finally found religion on this issue.

Just two quick things. My time is up; just very, very quickly. Hezbollah, you report their capabilities in terms of striking U.S. interests if provoked. Should we assume that if it was ever in our national -- if we ever felt compelled to act against Iran, that that might be the sort of triggering event that we would have to anticipate, Hezbollah taking some sort of action against us?

MR. GOSS: I would certainly recommend that any policymaker considering that take that calculation.

SEN. BAYH: My final question is with regard to FARC. Kind of looking out beyond the horizon, any assessment by any of you about -- obviously they have capabilities of striking our interests in Colombia. Are you at all concerned about their potential for striking us here in the homeland?

MR. GOSS: Well, I used to represent southwest Florida, and I have perhaps a different view than others. But I do feel there is an immediacy to making sure we understand what is going on there. There are obviously dialogue and communications going on between the countries. That means there can be between the bad players. And I think it's very important for our law enforcement people to be absolutely on top of that. And as far as I know, they are.

SEN. BAYH: Director Mueller.

MR. MUELLER: We have not seen, I do not believe, any indications or preparations for FARC to launch an attack on the United States. However, there are ties between individuals associated with FARC and persons in the United States, and they're something we have to keep an eye on.

SEN. BAYH: Thank you. Again, I appreciate your service. Thank you all.

SEN. ROBERTS: Let me just say that, in reference to Senator Bayh's comment, if Kim Jong Il would suddenly get religion, having been to North Korea and trying to deal with that regime in regards to the famine, and they always have a famine; there was a more severe famine several years ago -- he is the religion. He is a deity in his own mind, and the people believe that, as was his father. So it's a little difficult. And I would agree with Director Goss.

That's the only card he has to play on the world stage, and they're going to play it and they're going to continue. I still think our best opportunity is to do exactly what the director said, with China in the six-party talks. But I have no illusions of all of a sudden him getting a light bulb to go off. They don't have any light bulbs, by the way, in North Korea.

And following on your statement, I'd like to ask a question about Iran. And by your statement, I mean Senator Bayh. Admiral Jacoby, your written statement says that Iran is likely continuing nuclear weapon-related endeavors and devoting significant resources to its WMD program and that, unless constrained by a nuclear non-proliferation agreement, Tehran will probably have the ability to produce a weapon early the next decade.

Director Goss, your statement notes that the CIA is concerned about the dual-use nature of the technology that could also be used to achieve a nuclear weapon.

Ms. Rodley, your statement notes that Iran seeks but does not yet have any nuclear weapons.

It sounds like to me you all agree that, just like Iraq before 2004, Iran has troubling dual-use nuclear capabilities. What I'm interested in -- and both the vice chairman and I want to get into capabilities and whether or not we have the capability to determine some intelligence analysis on intent, as far as Iran's intent to build a nuclear weapon.

It sounds like there might be a difference of opinion between you three. I'm not suggesting that, but at least that might be the case. I would ask all three of you to give us your assessment of Iran's intent, to characterize your confidence in that judgment. If you feel that should be better handled in a classified session, I'd certainly appreciate it.

MR. GOSS: Mr. Chairman, I would limit my answer. I think there is something I would say that is obvious. There are other players in the neighborhood that are very concerned that also have views about what Iran is up to. And it's important that we understand what that might lead to.

I believe that having watched the pride of some countries in acquiring the world-stage status of having nuclear weapons and what that has meant for nationalism and leadership is that it becomes almost a piece of the holy grail for a small country that otherwise might be victimized, living in a dangerous neighborhood, to have a nuclear weapon.

So in my view, there is an inclination, a very strong inclination by the conservative leadership, present conservative leadership of Iran, to make sure that they can live up to the same level as some of their neighboring countries. And some of those neighboring countries -- indeed, Pakistan comes to mind -- have the bomb.

SEN. ROBERTS: Admiral Jacoby.

MR. JACOBY: I would join Director Goss in terms of the intent. We did some work recently looking at the direction that threats were going, and they are going away from conventional force-on-force confrontation strategy with the United States towards terrorism on one end and nuclear weapons, and not only the status but the perceived deterrent value that comes with them.

So I would join the director in terms of intent in Iran and would also say that we're engaged in a hard look at sequentially nuclear programs or suspected nuclear programs of various countries. Iran is next on our agenda. And I believe that our look and the committee's look will probably coincide, and we look forward to working that together.

SEN. ROBERTS: Ms. Rodley.

MS. RODLEY: I don't disagree with anything that's been said. I would merely add that another element that makes this harder to get at is the advantage of ambiguity when it comes to nuclear programs. The Iranians don't necessarily have to have a successful nuclear program in order to have the deterrent value. They merely have to convince us, others and their neighbors that they do. This is a lesson that hasn't been lost on them, and it merely complicates both the collection and the analysis on this issue.

SEN. ROBERTS: I thank all three of you for your comment. I'm enjoying the red light. I'm now a member of the red light club. Have patience, Senator Wyden.

This is a parochial question, but it's really not. It's a national question. Tommy Thompson, the former secretary of HHS, left and said he was worried about the nation's food supply. And all of us who are privileged to represent states who are involved in agriculture are asked time and time again -- I just heard it again on the radio, as of yesterday; I'm not sure why Tommy said that.

But at any rate, Admiral Loy, can you tell me how the Department of Homeland Security views the threat of what we call agri-terrorism? And the Emerging Threats Subcommittee of the Armed Services Committee four or five years ago got into this subject area knowing how serious it could be, but that not many people are really thinking about it.

They had an exercise or one of many exercises that has been held called Crimson Sky. Six states were infected by foot-in-mouth with an attack from Iraq. Devastating results happened; utter chaos -- loss of markets, the herds had to be destroyed, people panicked in urban areas. Our food supply was -- and I'm not talking one year; I'm talking several years.

So are those efforts now really being coordinated well with other agencies, specifically the Department of Agriculture? Are you getting the intelligence you need? What kind of a priority are you putting on this? This is sort of the Mikulski-port, Roberts-agriculture question.

MR. LOY: Yes, sir, Mr. Chairman. Without a doubt, Homeland Security Presidential Directive 7 itemizes that the -- first of all, it directs the secretary of Homeland Security to be the collaborative effort to pull together the critical infrastructure protection of our nation writ large.

One of the economic sectors cited in that direction is the food sector, and so that has caused the secretary of Homeland Security to challenge that designated lead-sector agency in the Department of Agriculture to develop a plan attendant to becoming a piece of this puzzle that will be the additive piece for food as it relates to the whole critical infrastructure protection of our nation.

So there has been very good work undertaken with the Department of Agriculture in agricultural operations -- meat, poultry, eggs world; and in the HHS-FDA world, responsible, if you will, for the rest of the food production and distribution chain that they're responsible for.

We're at a point where this national infrastructure protection plan, the base plan has been completed and submitted to the White House. Each of these sector plans -- we have taken stock, we at the department have taken stock of how well we felt their original plan submission met the specifications that were outlined in HSPD-7 and have offered that commentary back to, in this case, the secretary of Agriculture.

It was a bit of a challenge to go back to the drawing board and resubmit such that the thresholds are reached with what we think are the right concerns to allow not only that to be a free-standing sector and plan attendant to food protection for our country --

SEN. ROBERTS: When did you send that over?

MR. LOY: That's back over just before the holidays, sir.

SEN. ROBERTS: So that would be under the offices of the new secretary of Agriculture, obviously. How many people do you have on board in regards to Homeland Security that are either on loan from or consulting with or are regular employees that are dealing with this? I know that's a tough question to answer right here. I think I know the answer; there's one that I know of.

MR. LOY: One is a detailee, if you will, into the department in this business.


MR. LOY: And, of course, we've got those elements from Agriculture that came into the border portal validation process.


MR. LOY: But the effort is to allow the Agriculture secretary to take the lead with respect to developing these plans for our country and make sure that they fit well, because we could have 13 perfect plans, and I'm convinced that the interdependencies between and among them that are the real challenge.

SEN. ROBERTS: Well, it's a very hard thing to develop a contingency plan to try to mitigate this. Well, okay, I'll stop at that point because I've already gone way over my time. But I need to visit with you and the new director about this as we can determine.

Senator Rockefeller.

SEN. ROCKEFELLER: Director Goss, just a very specific and one short question. Before the election we went up a color.

MR. GOSS: I'm sorry?

SEN. ROCKEFELLER: On imminent threat we went up from yellow to orange. And nothing happened, and there has been no talk or consideration that at least I'm aware of of similar elevations since then. I'm wondering if to the extent that you're involved with it, sir, to the extent that homeland security, FBI is involved with it, has there been any attempt to go back and review the nature of that intelligence and whether or not it was a psychological move or whether -- I don't mean by that political -- psychological simply as a warning to others, or whether it was in fact justified. Has there been an effort to go back and relook at that intelligence?

MR. GOSS: Senator, in part the answer is yes. I don't know all the things that have been looked at, but part of that -- and, again, I;m not -- that's not my decision there. We provide the information. Part of that I think was an assessment of the Osama bin Laden statement that came out, that there was a question was that trying to interfere, and some of the questions of propaganda began to really take shape. Exactly how that figured into the decisions that were made by others on raising the elevation, I don't know.

Have we gone back and taken a look? The answer is yes. And I'll tell you why. One of the things that Senator Bayh was pointing out -- I should have answered, and I neglected to -- is that we have learned the difference between a worst-case scenario and a most-likely scenario, and we need to be very careful about how we need to present these things, so people are hearing things not as worst-case scenarios but as most-likely scenarios, if that's what we believe.

We find that when the chatter level goes up -- that's an expression we like to use, because it sort of covers up what we're really talking about, but it means there's something to be tuned into -- all of our sensors out there that if the system is blinking red, all of those kinds of statements that we've heard. What it means is that we're getting a huge flow of information. The problem is how much of that is just wishful thinking and how much of it is real planning. That is a very hard question to make a judgment on. We are going back as part of our process of how do we get our product better -- how do we make sure our customer understands what we're saying. And that process is very clearly part of the overall process that Senator Bayh was asking about. Are we intending -- and others have asked about -- are we intending to correcting not only the collection piece but the analytical piece, including operators, incidentally, when they're available.

MR. MUELLER: I think there has been an effort to go back and look at -- well, we continuously review the threat posture day in and day out. And I am convinced that given the information that we had at the time that we made the right decision in terms of the actions we took, given the intelligence at the time. Subsequent to that, there has been further development in that intelligence that may call into question at least some of that intelligence. But you also have to reflect upon the fact that we had al-Hindi (ph). We had the surveillance documents, the prudential, the stock exchange, a number of things back in this time prior to the election, along with intelligence that indicated that we can expect a threat or an attack in that period before the election.

As I indicated in my opening statement remarks, we undertook substantial efforts to ensure that such an attack did not take place. We'll never know whether those efforts -- our efforts, the efforts of the CIA, the efforts of DHS, the efforts of our counterparts overseas -- were effective in reducing or removing that threat of an attack before the elections. But in reflecting upon what we knew at the time, I believe that we took the right steps. That doesn't mean that we can't do it better the next time, but I'm comfortable with the decision that was made back then.

SEN. ROCKEFELLER: I don't know whether Admiral Loy --

ADM. LOY: Sir, I think that's a very good capture of the time. One thing I would offer is that over the last two years, and certainly in the lasts year, where we are with respect to capability, where we are with respect to stature of an interagency security plan that we keep track of day after day after day, I would offer that today's yellow is probably much closer to yesterday's orange as it relates to the constancy of capability that is there 24-by-7, 365, around our country. So we have simply grown and matured, both as a brand new department trying to coordinate and collaborate on many of these things, and in the absolute value of some of the contributions that are being made by many yield an additive if you will that has the country sort of at a level significantly stronger than it ever was before. That offers us a chance to keep from the going up and down road so to speak when the net evaluation of all the players at a SVTS or at a series of weekly and daily meetings that we conduct, rates the flow going by as not being "worthy," quote/unquote of adjusting the homeland security advisory system to a greater level. I think the country should take great assurance that the level of capability attendant to these things is significantly higher day after day after day, and that is simply as a result of us learning lessons going back from each of the experiences of up and down that we've undertaken, and then ratcheting up as appropriate the prevention, the protection and the response capabilities of the nation across the board.

SEN. ROCKEFELLER: I thank you.

SEN. ROBERTS: Let me just say -- and, Senator Wyden, I'll have to buy you lunch or something -- as for that matter, probably all of you -- but we don't need to get into any food deprivation here, and so I'll try and make this quick. I hope there's a look-back on this.

ADM. LOY: Indeed there is.

SEN. ROBERTS: Same people, same table, same threat, no consensus -- before our committee. In regards to access to information, that was the problem. Same representatives testifying before us that you are in charge of that do this on a day-to-day basis. And 30 days later a lot of questions about the credibility of the sources. Now, if you're going to err, you're going to err on the side of safety. For goodness' sakes, I know that. And if you take certain steps you can't come back. We even had one senator leave this place as a result of this -- he did come back. But I'm saying that the leadership and this Senate and this House were informed in such a way with a very aggressive kind of consensus that was not shared when we had them before the committee. That's not been too long ago. And then 30 days later, because of detainee information that's been so highlighted here, why, then we decided, Well, you know, we just didn't have a consensus. Now, damn, that's got to quit. Now, I know that you can't have every source and be and have a consensus threat analysis that's perfect. That -- I mean, you know, I'm not asking that. But at the time when you have the same people, the same table that need -- you know, one of my questions is, Do you people know each other? And again it was information access. And I feel very strongly about that, and I think it was a classic example of why you have to go back -- the vice chairman calls it red teaming -- take a look at this, and say, Well, what the heck went wrong, because we panicked the entire Congress, not to mention Washington, D.C., so on and so forth. Thank God it didn't happen. You know, maybe I'm wrong. Maybe there was an element there that we missed, but it certainly was not present in regard to the presentation that we received.

Senator Wyden.

SEN. WYDEN: Thank you, Mr. Chairman. As you know, I share your concerns about this whole question of how information is shared, and that's one of the reasons I raised the questions I did on the last round.

I'd like to go into another area though that goes to the heart of what I think the challenge is in America. I believe strongly in the proposition that our country has got to fight terrorism relentlessly and ferociously, and it's got to be done in a way that's consistent with protecting the privacy of law-abiding people, innocent people. Now, it's been two years since the Congress closed down the Operation Total Information Awareness Program, but the Congress is still totally in the dark with respect to what kind of information your agencies collect on citizens and how it's used. And I want to be very specific and talk about data mining. The data mining, by way of shorthand, is essentially technology that our agencies use to shift through the records and information that involves millions and millions of American citizens. I can't find any rules on data mining anywhere. And so what I'd like to ask each of you is what do your agencies do with respect to data mining? -- A. B, Are there any rules at all? And, C, how are the rules enforced? Because I've spent a lot of time on this, and I cannot find any rules at all on data mining. So maybe we'd just go right down the row. Admiral Loy?

ADM. LOY: Sir, you and I have spoken about this a lot as it's been perhaps 18 months or two years ago -- it's associated with at that point the Computer Assisted Passenger Pre-Screening second program, then known as CAPPS II. As you know, I have worked very, very hard to work with the privacy community and with many others intending to recognizing what then became a list of eight absolutes that the GAO report initiated for CAPPS II and is now 10 items that the Congress put in the appropriations bill last year for this department, intending to you are not going any further with CAPPS II and it's now Secure Flight, the new program, until all 10 of those concerns that we have at the Congress are taken care of.

We have very diligently gone to great lengths to explore each and every one of the eight, each and every one of the now 10, and are right on the cusp I believe of satisfying the Congress and satisfying the GAO that it is the right thing for us to press on with that particular program, because it has come to represent three things. One --

SEN. WYDEN: Admiral, are you saying that that's the only program that involves data mining at your agency? I appreciate what you try to do, and you've certainly been a straight shooter on it. What I'm concerned about is whether there are any rules with respect to data mining generally. I do know what happens when Congress picks up on one thing or another and suddenly the travel records get out on somebody. You all work with us, we try to get something to deal with that specific problem. But I don't see any rules with respect to data mining generally, and that's what troubles me.

ADM. LOY: I do not have a management directive in force if you will in the department that I'm aware of covering data mining.

SEN. WYDEN: Are there plans to do that?

ADM. LOY: I'll be happy to take that on and work with you, sir.

SEN. WYDEN: All right, let me just go right down the row. We've established at least one agency other than the computer assisted travel records doesn't have it. Yours, sir?

ADM. JACOBY: Senator, we have very clear, definitive restrictions on what the Department of Defense can do with respect to having any information having to do with U.S. persons in our files. So and those are very conservative interpretations and they are regularly inspected by inspector generals at all level inside the department. So when we apply data mining tools against the information that we have available, there's no U.S. persons data in there to begin with. So that's a bit different situation than maybe some of the other departments.

SEN. WYDEN: So you get no data for example from non-governmental sources, sir?

ADM. JACOBY: We are not permitted to maintain information on U.S. persons, sir.

SEN. WYDEN: Okay. Director Goss?

MR. GOSS: As you know, the National Foreign Intelligence Program was specifically set up to make sure that Americans do not spy on Americans, and our work is done overseas. And I think that the proposition you have given us is one that when I left Congress was still red hot after a couple years of debate, which I think will go on, and that is the crossroads between privacy and protection. As far as I know, our agency is not a relevant agency to answer your question, because we don't do data mining on U.S. persons unless it's under some safeguarded procedure which is properly notified and so forth.

SEN. WYDEN: That's what I'm curious about, is I know there are areas where you do it, and I'm wanting to know what the safeguards are. You're saying --

MR. GOSS: The safeguards are notification to this committee, sir.

SEN. WYDEN: Director Mueller?

MR. MUELLER: Well, we have one NT (ph) in the counterterrorism arena called the Foreign Terrorism Tracking Task Force, that pursuant to -- accomplishes certain data -- I wouldn't call it data mining, but requesting from sources outside the bureau information relating to possible location of terrorists in the United States. That has been briefed, and I have been to Congress on a number of occasions. It's transparent. We're happy to have you come over and briefed on it.

SEN. WYDEN: That's the only set of rules you have with respect to data mining?

MR. MUELLER: It's not the only set of rules in terms of data mining. Your definition of data mining -

SEN. WYDEN: That's what I'm asking.

MR. MUELLER: We have information that's brought into the Bureau. When information is brought into the Bureau it's brought in on predication. We have some reason to bring the data in. It may be telephone numbers, it may be addresses of fugitive terrorists. Now, we data mine that data, but it is data that we have a basis for bringing into our databases, whether they come from our cases or from the collection of intelligence that is based on adequate predication.

SEN. WYDEN: The reason that I'm asking the question is that there are a lot of people in this country who believe that a lot of this information, you know, mining, data mining takes place without predication, and that's why I'm trying to figure out what the rules are. And I'm going to let Ms. Rodley answer the question, and then I'm going to ask something of all of you and let my colleagues wrap up. Yeah?

MS. RODLEY: Senator Wyden, as you know, the State Department is not an intelligence-collection agency. To my knowledge, the only information that we collect and maintain on American citizens is passports information. And passport information is held very closely, and has a very strict set of rules regarding its use. I believe -- but I will confirm to you later -- that that's restricted to use for notifying next of kin when an American citizen is injured or dies abroad, and cooperation with law enforcement.

SEN. WYDEN: Thank you. What I'd like from each of you is to confirm in writing what policies exist with respect to the sifting of information on Americans. And I would like it also to include how information is used, if it's used at all, and I understood that the Pentagon said that they have nothing -- how it's used when it comes from non-governmental agencies, where there I think it's really the Wild West. I mean, it's one thing if it comes from a government agency. It's quite another if it comes from a non-governmental body. And having spent a fair amount of time digging into this area, I can't find what the ground rules are for data mining. And can we ask -- can I ask then that each one of you will get us the ground rules that you use for data mining in the next 30 days?

MR. GOSS: Absolutely, sir.

SEN. WYDEN: Thank you, Mr. Chairman.

SEN. ROBERTS: We thank you for your patience, your perseverance and your commitment to our country. Thank you very much. This hearing is closed. (Sounds gavel.)