Senate Intelligence Committee Hearing: Threats to U.S. National Security

February 6, 2002

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SEN. GRAHAM: I call the meeting to order. For several years, this committee has had a practice of commencing its annual oversight of the United States intelligence community by holding a public hearing to present to the American people and our committee members the intelligence community's assessment of the current and projected national security threats to the United States.

There is nothing more important to our national security than timely and accurate intelligence. Intelligence forms the foundation of our foreign policy and provides the basis of our nation's defense planning, strategy, and supports our war fighters.

The intelligence community is our nation's early-warning system against threats to the lives and property of United States citizens and residents here and around the world. The importance of this mission became particularly apparent on September the 11th when our nation's greatest strengths -- our freedom, our openness -- were successfully exploited by an elusive global network of determined zealots.

The terrorist threat has been on the intelligence community's radar screen for years. Indeed, it was almost exactly a year ago today, on February 7th of 2001, when Director George Tenet testified at this same open session. And he stated, and I quote, "Osama bin Laden and his global network of lieutenants and associates remain the most immediate and serious threat. His organization is continuing to place emphasis on developing surrogates to carry out attacks in an effort to avoid detection, blame and retaliation. As a result, it is often difficult to attribute terrorist incidents to his group, the al Qaeda."

While the intelligence community has been aware of the great threat posed by bin Laden and his terrorist organization, it is a priority of this committee to ascertain what more the intelligence community could have done to avert the September 11th tragedy. We must identify any systemic shortcomings in our intelligence community and fix those as soon as possible. We owe it to the American people to do all that we can to prevent a recurrence of September 11th.

These and other issues will be explored with our witnesses in a closed hearing this afternoon and for the remainder of this session of Congress. I want to thank our witnesses who are appearing here today. We have with us Mr. George Tenet, director of Central Intelligence; Mr. Carl Ford, assistant secretary of State for intelligence and research; Vice Admiral Thomas Wilson, director of the Defense Intelligence Agency; and Mr. Dale Watson, executive assistant director for counterterrorism and counterintelligence.

In order to optimize the time for questions of our witnesses, immediately after Vice Chairman Senator Shelby makes his opening statement, we will ask Director Tenet to present his testimony. We will ask our other witnesses to submit their full statements for the record. For our question-and-answer period, we will observe the normal committee rule of first arrival, first to question. The questions will be limited to five minutes per round.

Vice Chairman Shelby.



A Senator from Alabama, and
Vice Chairman, Senate Select Intelligence Committee


SEN. RICHARD SHELBY (R-AL): Thank you, Mr. Chairman. We held our last open hearing on national security threats one year ago tomorrow, as Senator Graham has alluded to. Director Tenet, on that day, you testified here that first and foremost among the threats to the U.S. was the threat posed by international terrorism, and specifically by Osama bin Laden's global terrorist network.

We all agreed with you when you said, and I quote, "The highest priority for our intelligence community must invariably be on those things that threaten the lives of Americans or the physical security of the United States."

To fight this terrorist threat, you assured us then, and I quote again, "The intelligence community has designed a robust counterterrorism program that has preempted, disrupted and defeated international terrorists and their activities." In fact, you told us then, "In most instances, we've kept terrorists off-balance, forcing them to worry about their own security and degrading their ability to plan and to conduct operations."

Seven months after your testimony, in an attack that apparently had been years in the planning, Osama bin Laden's terrorists killed nearly 3,000 innocent Americans in less than one hour. As you know, the U.S. has an intelligence community today and a director of Central Intelligence in large part because of the Pearl Harbor disaster of December the 7th, 1941. The fear of another Pearl Harbor provided the impetus for our establishment of a national-level intelligence bureaucracy. This system was created so that America would never have to face another devastating surprise attack.

That second devastating surprise attack came on September the 11th, and as I said, it killed more Americans than did the Japanese assault on Pearl Harbor. All of us, I think, owe the American people an explanation as to why our intelligence community failed to provide adequate warning of such a terrorist attack on our soil. After all, as Director Tenet has stated, the director of Central Intelligence is hired not to observe and to comment but to warn and to protect.

In the very near future, this committee will join with the House Intelligence Committee in an effort to provide an explanation to the American people. Once we determine why we were caught completely by surprise, I believe we must then work together to ensure that there is no third Pearl Harbor.

I'm pleased that the director of Central Intelligence, George Tenet, and his colleagues have joined us today. These threat hearings are important, because understanding what the threats are is the first step toward helping our intelligence community meet the challenge of defending against them.

Mr. Chairman, these hearings also give the respective leaders within the intelligence community an opportunity to speak directly to the American people. While the bulk of the activities of the intelligence community are secret, there is a great deal we can and I think we should discuss in a public forum, as you call for today.

With that in mind, I ask each of our witnesses to address members' questions to the greatest extent possible in this open setting. Not long ago, our intelligence community faced a single clear threat, the Soviet Union and its communist allies, against which it could devote most of its resources and attention.

With the end of the Cold War, the world situation facing our intelligence agencies underwent a fundamental change. Until that point, murky transnational threats had been only sideshows to the main event of the East-versus-West strategic rivalry. Today, however, coping with asymmetric transnational challenges such as terrorism has become the most important duty of our intelligence community.

To say the least, the post-Cold War period has been one of difficult transition. Even before September the 11th, we had a rocky history of intelligence failures; among them, the bombing of Khobar Towers, the Indian nuclear test, the bombing of our East African embassies, the first attack on the World Trade Center buildings, and the attack upon the USS Cole.

Examined individually, each of these failures, tragic in their own way, may not suggest a continuing or systemic problem. But, however, taken as a whole and culminating with the events of September the 11th, they present a disturbing series of intelligence shortfalls that I believe expose some serious problems in the structure of and approaches taken by our intelligence community.

We will have many opportunities in the very near future to discuss the structural and organizational defects inherent in our intelligence community. But for today, we should remember that understanding the threat is the first step along a road that must lead to improvements in how our nation confronts these threats.

It has become apparent that international terrorism now poses the most significant threat to our national security and our interests at home and abroad. I will be interested to hear what our intelligence agencies believe such threats will look like in the future.

Just as militaries can face defeat if they keep trying to fight the last war, so can intelligence agencies suffer terrible strategic surprise if they spend their time trying to meet the last threat or if they try to meet new threats with the mindset, tactics and obsolete mythologies of the past.

The U.S. clearly faces unprecedented dangers today, and we will surely face new ones tomorrow. I look forward to hearing from our witnesses today as we discuss these threats and how we can work together to defeat them in the future.

Thank you, Mr. Chairman.

SEN. GRAHAM: Thank you, Mr. Vice Chairman. As indicated previously, we will now receive the testimony from Director Tenet. We'll ask for the other witnesses to submit their statements, and then we will proceed to questions. Director Tenet.



Director, Central Intelligence Agency


MR. TENET: Mr. Chairman, I appear before you this year under circumstances that are extraordinary and historic for reasons I need not recount. Never before has the subject of this annual threat briefing had more immediate resonance. Never before have the dangers been more clear or more present.

September 11th brought together and brought home literally several vital threats to the United States and its interests that we have long been aware of. It is the convergence of these threats that I want to emphasize with you today: The connection between terrorists and other enemies of this country; the weapons of mass destruction they seek to use against us; and the social, economic and political tensions across the world that they exploit in mobilizing their followers.

September 11th demonstrated the dangers that arise when these threats converge and remind us that we overlook, at our own peril, the impact of crises in remote parts of the world. This convergence of threats has created a world I will present to you today, a world in which dangers exist not only in those places we have most often focused our attention, but also in other areas that demand it; in places like Somalia, where the absence of a national government has created an environment in which groups sympathetic to al Qaeda have offered terrorists an operational base and potential safe haven; in places like Indonesia, where political instability, separatist and ethnic tensions and protracted violence are hampering economic recovery and fueling Islamic extremism; in places like Colombia, where leftist insurgents who make much of their money from drug trafficking are escalating their assault on the government, further undermining economic prospects and fueling a cycle of violence; and finally, Mr. Chairman, in places like Connecticut, with the death of a 94-year-old woman in her own home of anthrax poisoning, can arouse our worst fears about what our enemies might try to do to us.

These threats demand our utmost response. The United States has clearly demonstrated since September 11th that it is up to the challenge. But make no mistake: Despite the battles we have won in Afghanistan, we remain a nation at war. Last year I told you that Osama bin Laden and the al Qaeda network were the most immediate and serious threat this country faced. This remains true, despite the progress we have made in Afghanistan and in disrupting the network elsewhere.

We assess that al Qaeda and other terrorist groups will continue to plan to attack this country and its interests abroad. Their modus operandi is to continue to have multiple attack plans in the works simultaneously and to have al Qaeda cells in place to conduct them.

We know that the terrorists have considered attacks in the U.S. against high-profile government or private facilities, famous landmarks and U.S. infrastructure nodes such as airports, bridges, harbors and dams. High-profile events such as the Olympics or last week's Super Bowl also fit the terrorists' interests in striking another blow within the United States that would command worldwide media attention.

Al Qaeda also has plans to strike against U.S. and allied interests in Europe, the Middle East, Africa and Southeast Asia. American diplomatic and military installations are at high risk, especially in East Africa, Israel, Saudi Arabia and Turkey. Operations against U.S. targets could be launched by al Qaeda cells already in place in major cities in Europe and the Middle East. Al Qaeda can also exploit its presence or connections to other groups in such countries as Somalia, Yemen, Indonesia and the Philippines.

Although the September 11th attacks suggest that al Qaeda and other terrorists will continue to use conventional weapons, one of our highest concerns is their stated readiness to attempt unconventional attacks against us. As early as 1998, bin Laden publicly declared that acquiring unconventional weapons was a religious duty. Terrorist groups worldwide have ready access to information on chemical, biological and even nuclear weapons via the Internet, and we know that al Qaeda was working to acquire some of the most dangerous chemical agents and toxins.

Documents recovered from al Qaeda facilities in Afghanistan show that bin Laden was pursuing a sophisticated biological weapons research program. We also believe that bin Laden was seeking to acquire or develop a nuclear device. Al Qaeda may be pursuing a radioactive dispersal device, what some call a dirty bomb.

Alternatively, al Qaeda or other terrorist groups might also try to launch conventional attacks against the chemical or nuclear industrial infrastructure of the United States to cause widespread toxic or radiological damage.

We are also alert to the possibility of cyber warfare attack by terrorists. September 11th demonstrated our dependence on critical infrastructure systems that rely on electronic and computer networks. Attacks of this nature will become an increasingly viable option for the terrorists as they and other foreign adversaries become more familiar with these targets and the technologies required to attack them.

The terrorist threat goes well beyond al Qaeda. The situation in the Middle East continues to fuel terrorism and anti-U.S. sentiment worldwide. Groups like the Palestinian Islamic Jihad and Hamas have escalated their violence against Israel, and the intifada has rejuvenated once-dormant groups like the Popular Front for the Liberation of Palestine. If these groups feel that U.S. actions are threatening their existence, they may begin targeting Americans directly, as Hezbollah's terrorist wing already does.

We're also watching states like Iran and Iraq that continue to support terrorist groups. Iran continues to provide support, including arms transfers, to the Palestinian rejection groups and Hezbollah. Tehran also has failed to move decisively against al Qaeda members who have relocated to Iran from Afghanistan. Iraq has a long history of supporting terrorists, including giving sanctuary to Abu Nidal.

The war on terrorism, Mr. Chairman, has dealt severe blows to al Qaeda and its leadership. The group has been denied its safe haven and strategic command center in Afghanistan. Drawing on both our own assets and increased cooperation from allies around the world, we are uncovering terrorist plans and breaking up their cells. These efforts have yielded the arrest of nearly 1,000 al Qaeda operatives in over 60 countries and have disrupted terrorist operations and potential terrorist attacks.

Mr. Chairman, bin Laden did not believe that we would invade his sanctuary. He saw the United States as soft, impatient, unprepared and fearful of a long bloody war of attrition. He did not count on the fact that we had lined up allies that could help us overcome barriers of terrain and culture. He did not know about the collection and operational initiatives that will allow us to strike with great accuracy at the heart of the Taliban and al Qaeda. He underestimated our capabilities, our readiness and our resolve.

That said, I must repeat that al Qaeda has not yet been destroyed. It and other like-minded groups remain willing and able to strike at us. Al Qaeda's leaders, still at large, are working to reconstitute the organization and resume its terrorist operations. We must eradicate these organizations by denying them their sources of financing, eliminating their ability to hijack charitable organizations for their terrorist purposes. We must be prepared for a long war and we must not falter.

Mr. Chairman, we must also look beyond the immediate danger of terrorist attacks to the conditions that allow terrorism to take root around the world. These conditions are no less threatening to U.S. national security than terrorism itself. The problems that terrorists exploit -- poverty, alienation and ethnic tensions -- will grow more acute over the next decade. This will especially be the case in those parts of the world that have served as the most fertile recruiting grounds for Islamic extremist groups.

We have already seen in Afghanistan and elsewhere that domestic unrest and conflict in weak states is one of the factors that create an environment conducive to terrorism. More importantly, demographic trends tell us that the world's poorest and most politically unstable regions, which include parts of the Middle East and sub-Saharan Africa, will have the largest youth populations in the world over the next two decades and beyond. Most of these countries will lack the economic institutions or the resources to effectively integrate these youth into their societies.

All of these challenges come together in parts of the Muslim world, and let me give you just one example. One of the places where they converge that has the greatest long-term impact on any society is its educational system. Primary and secondary education in parts of the Muslim world is often dominated by an interpretation of Islam that teaches intolerance and hatred. The graduates of these schools, madrases, provide the foot soldiers for many of the Islamic militant groups that operate throughout the Muslim world.

Let me underscore what the president has affirmed. Islam itself is neither an enemy nor a threat to the United States. But the increasing anger toward the West and toward governments friendly to us among Islamic extremists and their sympathizers clearly is a threat to us. We have seen and continue to see these dynamics play out across the Muslim world. Our campaign in Afghanistan has made great progress, but the road ahead is fraught with challenges. The Afghan people, with international assistance, are working to overcome a traditionally weak central government, a devastated infrastructure, a grave humanitarian crisis, and ethnic divisions that deepened over the last 20 years of conflict. The next few months will be an especially fragile period.

Let me turn to Pakistan, Mr. Chairman. September 11th and the response to it were the most profound external events for Pakistan since the Soviet invasion of Afghanistan in 1979 and the U.S. response to that. The Musharraf government's alignment with the United States and its abandonment of nearly a decade of support for the Taliban represent a fundamental political shift with inherent political risks because of the militant Islamic and anti-American sentiments that exist within Pakistan.

President Musharraf's intention to establish a moderate, tolerant, Islamic state, as outlined in his 12 January speech, is being welcomed by most Pakistanis, but we still have to confront major vested interests. The speech is energizing debate across the Muslim world about which vision of Islam is the right one for the future of the Islamic community. Musharraf established a clear and forceful distinction between a narrow, intolerant, conflict-ridden vision of the past and an inclusive, tolerant, and peace-oriented vision of the future. The speech also addressed the jihad issue by citing the distinction the prophet Mohammad made between the smaller jihad involving violence and the greater jihad that focuses on eliminating poverty and helping the needy.

Although September 11th highlighted the challenges that India and Pakistan and their relations posed for U.S. policy, the attack on the Indian parliament on December 13th was even more destabilizing, resulting as it did in new calls for military action against Pakistan and subsequent mobilization on both sides. The chance of war between these two nuclear armed states is higher than at any point since 1971. If India were to conduct large-scale offensive operations into Pakistani Kashmir, Pakistan might retaliate with strikes of its own, in the belief that its nuclear deterrent would limit the scope of an Indian nuclear counter-attack. Both India and Pakistan are publicly downplaying the risks of nuclear conflict in the current crisis. We are deeply concerned, however, that a conventional war, once begun, could escalate into a nuclear confrontation, and here is a place where diplomacy and American engagement has made an enormous difference.

Let me turn to Iraq. Saddam has responded to our progress in Afghanistan with a political and diplomatic charm offensive to make it appear that Baghdad is becoming more flexible on U.N. sanctions and inspection issues. Last month, he sent Deputy Prime Minister Tariq Aziz to Moscow and Beijing to profess Iraq's new openness to meet its U.N. obligations and to seek their support. Baghdad's international isolation is also decreasing as support for the sanctions regime erodes among other states in the region. Saddam has carefully cultivated neighboring states, drawing them into economically dependent relationships in the hopes of further undermining their support for sanctions. The profits he gains from these relationships provide him with the means to reward key supporters, and more importantly to fund his pursuit of weapons of mass destruction. His calculus is never about bettering or helping the Iraqi people.

Let me be clear. Saddam remains a threat. He is determined to thwart U.N. sanctions, press ahead with weapons of mass destruction, and resurrect the military force he had before the Gulf War. Today he maintains his vice grip on the levers of power through a pervasive intelligence and security apparatus, and even his reduced military force, which is less than half of its pre-war size, remains capable of defeating more poorly armed internal opposition and threatening Iraq's neighbors.

As I said earlier, we continue to watch Iraq's involvement in terrorist activities. Baghdad has a long history of supporting terrorism, altering its targets to reflect changing priorities and goals. It has also had contacts with al Qaeda. Their ties may be limited by diverging ideologies, but the two sides mutual antipathy towards the United States and the Saudi royal family suggest that tactical cooperation between them is possible, even though Saddam is well aware that such activity would carry serious consequences.

In Iran, we are concerned that the reform movement may be losing its momentum. For almost five years, President Khatami and his reformist supporters have been stymied by Supreme Leader Khatami and the hard-liners. The hard-liners have systematically used the unelected institutions they control -- the security forces, the judiciary, and the guardians council -- to block reforms that challenge their entrenched interests. They have closed newspapers, forced members of Khatami's cabinet from office, and arrested those who have dared to speak out against their tactics.

Discontent with the current domestic situation is widespread, and cuts across the social spectrum. Complaints focus on the lack of pluralism and government accountability, social restrictions and poor economic performance. Frustrations are growing as the populace sees elected institutions such as the -- (inaudible) -- and the presidency, unable to break the hard-liners' hold on power.

The hard-line regime appears secure for now because security forces have easily contained dissenters and arrested potential opposition leaders. No one has emerged to rally reformers into a forceful movement for change, and the Iranian public appears to prefer gradual reform to another revolution, but the equilibrium is fragile and could be upset by a miscalculation by either the reformers or the hard-line clerics.

For all of this, reform is not dead. We must remember that the people have Iran have demonstrated in four national elections since 1997 that they want change, and have grown disillusioned with the promises of the revolution. Social, intellectual and political developments are proceeding. Civil institutions are growing, and new newspapers open as others are closed.

The initial signs of Teheran's cooperation in common cause with us in Afghanistan are being eclipsed by Iranian efforts to undermine U.S. influence there. While Iran's officials express a shared interest in a stable government in Afghanistan, its security forces appear bent on countering American presence. This seeming contradiction in behavior reflects a deep-seeded suspicion among Teheran's clerics that the United States is committed to encircling and overthrowing them, a fear that could quickly erupt in attacks against our interests.

We have seen little sign of a reduction in Iran's support for terrorism in the past year. Its participation in the attempt to transfer arms to the Palestinian Authority via the Karine A probably was intended to escalate the violence of the intifada and strengthen the position of Palestinian elements that prefer armed conflict with Israel.

The current conflict between Israel and Palestinians has been raging for almost a year and a half, and it continues to deteriorate. The violence has hardened the public's positions on both sides and increased the long-standing animosity between Israeli Prime Minister Sharon and Palestinian leader Arafat. Although many Israelis and Palestinians say they believe that ultimately the conflict can only be resolved through negotiations, the absence of any meaningful security cooperation between Israel and the Palestinian Authority, and the escalating and uncontrolled activities of the Palestinian Islamic Jihad and Hamas make progress extremely difficult.

We're concerned that this environment creates opportunities for any number of players, most notably Iran, to take steps that will result in further escalation of violence by radical Palestinian groups. At the same time, the continued violence threatens to weak the political center in the Arab world and increases the challenge for our Arab allies to balance their support for us against the demands of their public.

Mr. Chairman, let me now turn to the subject of proliferation. I would like to start by drawing your attention to several disturbing trends. Weapons of mass destruction programs are becoming more advanced and effective as they mature, and as countries of concern become more aggressive in pursuing them. This is exacerbated by the diffusion of technology over time, which enables proliferators to draw on the experience of others, and develop more advanced weapons more quickly than they could otherwise. Proliferators are also becoming more self-sufficient, and they are taking advantage of the dual-use nature of weapons of mass destruction and missile related technologies to establish advanced production capabilities and to conduct WMD and missile related research under the guise of legitimate commercial or scientific activity.

With regard to chemical and biological weapons, the threat continues to grow for a variety of reasons and to present us with monitoring challenges. On the nuclear side, we are concerned about the possibility of significant nuclear technology transfers going undetected. This reinforces our need for closely examining emerging nuclear programs for sudden leaps in capability.

On the missile side, the proliferation of ICBM and cruise missile design and technology has raised the threat to the United States from weapons of mass destruction delivery systems to a critical threshold. As outlined in our recent national intelligence estimate on the subject, most intelligence community agencies project that by 2015 the U.S. will most likely face ICBM threats from North Korea and Iran, and possibly Iraq. This is in addition to the long-standing missile forces of Russia and China. Short- and medium-range ballistic missiles pose a significant threat right now.

Mr. Chairman, Russian entities continue to provide other countries with technology and expertise applicable to CW, BW, nuclear and ballistic missile and cruise missile projects. Russia appears to be the first choice of proliferant states seeking the most advanced technology and training. These sales are a major source of funds for Russian commercial and defense industries and military research and development. Russia continues to supply significant assistance on nearly all aspects of Tehran's nuclear program. It is also providing Iran with assistance on long-range ballistic missile. Chinese firms remain key suppliers of missile-related technologies to Pakistan, Iran and several other countries. This, in spite of Beijing's November 2000 missile pledge not to assist in any way countries seeking to develop nuclear-capable ballistic missiles. Most of China's efforts involve solid propellant ballistic missile, developments for countries that are largely dependent on Chinese expertise and materials. But it has also sold cruise missiles to countries of concern, such as Iran.

North Korea continues to export complete ballistic missiles and production capabilities, along with related raw materials, components and expertise. Profits from these sales help Pyongyang to support its missile and probably other WMD development programs, and in turn generate new products to offer its customers, primarily Egypt, Libya, Syria and Iran.

North Korea continues to comply with the terms of the agreed framework that are directly related to the freeze on its reactor program. But Pyongyang has warned that it is prepared to walk away from the agreement, if it concluded that the United States was not living up to its end of the deal.

Iraq continues to build and expand an infrastructure capable of producing weapons of mass destruction. Baghdad is expanding its civilian chemical industries in ways that could be diverted quickly into CW production. We believe Baghdad continues to pursue ballistic missile capabilities that exceed the restrictions imposed by U .N. resolutions. With substantial foreign assistance, it could flight- test a longer-range ballistic missile within the next five years.

We believe that Saddam never abandoned his nuclear weapons program. Iraq maintains a significant number of nuclear scientists, program documentation, and probably some dual-use manufacturing infrastructure that could support a reinvigorated nuclear weapons program. Baghdad's access to foreign expertise could support a rejuvenated program. But our major near-term concern is the possibility that Saddam might gain access to fissile material.

Iran remains a serious concern because of its across-the-board pursuit of weapons of mass destruction and missile capabilities. Tehran may be able to indigenously produce enough fissile material for a nuclear weapon by later this decade.

Mr. Chairman, both India and Pakistan are working on the doctrine and tactics for more advanced nuclear weapons, producing fissile material and increasing their stockpiles. We have continuing concerns that both sides may not be done with nuclear testing. Nor can we rule out the possibility that either country could deploy their most advanced nuclear weapons without additional testing.

Mr. Chairman, I want to talk about Russia, China and North Korea, and then we will go to question. And I appreciate the patience, but I think it's important.

Mr. Chairman, with regard to Russia, the most striking development, aside from the issues I have just raised, regarding Russia over the past year has been Moscow's greater engagement with the United States. Even before September 11th, President Putin had moved to engage the United States as part of a broader effort to integrate Russia more fully into the West, modernize its economy, and regain international status and influence. This strategic shift away from a zero-sum view of relations is consistent with Putin's stated desire to address many socioeconomic problems that could cloud Russia's future.

During his second year in office, he moved strongly to advance his policy agenda. He pushed the Duma to pass key economic legislation on budget reform, legitimizing urban property sales, flattening and simplifying tax rates, and reducing red tape for small businesses. His support for his economic team and its fiscal rigor positioned Russia to pay back wages and pensions to state workers, and amassed a Soviet high -- a post-Soviet high of almost $39 billion in reserves. He has pursued military reform. And all of this is promising, Mr. Chairman. He is trying to build a strong presidency that can ensure these reforms are implemented across Russia, while managing a fragmented bureaucracy beset by internal networks that serve private interests.

In his quest to build la strong state, however, we have to be mindful of the fact that he is trying to establish parameters within which political forces must operate. This managed democracy is illustrated by his continuing moves against independent national television companies. On the economic front, Putin will have to take on bank reform, overhaul Russia's entrenched monopolies and judicial reform to move the country closer to a Western-style market economy, and attract much-needed foreign investment.

Putin has made no headway in Chechnya. Despite his hint in September of a possible dialogue with Chechen moderates, the fighting has intensified in recent months, and thousands of Chechen guerrillas and their fellow Arab mujaheddin fighters remain. Moscow seems unwilling to consider the compromises necessary to reach a settlement, while divisions among the Chechens make it hard to find a representative interlocutor. The war meanwhile threatens to spill over into neighboring Georgia.

After September 11th, Putin emphatically chose to join us in the fight against terrorism. The Kremlin blames Islamic radicalism for the conflict in Chechnya, and believes it is to be a serious threat to Russia. Moscow sees the U.S.-led counterterrorism effort, particularly the demise of the Taliban regime, as an important gain in countering radical Islamic threat to Russia and Central Asia.

So far Putin's outreach to the United States has incurred little political damage, largely because of his strong domestic standing. At the same time, Mr. Chairman, Moscow retains fundamental differences with us, and suspicion about U.S. motive persists among Russian conservatives, especially within the U.S. military and the security services. Putin has called the intended U.S. withdrawal from the ABM Treaty a mistake, but has downplayed its impact on Russia. At the same time, Russia is likely to pursue a variety of countermeasures and new weapons system to defeat a U.S.-deployed missile defense.

With regard to China, Mr. Chairman, I told you last year that China's drive to become a great power was coming more sharply into focus. The challenge I said was that Beijing saw the United States as the primary obstacle to its realization of that goal. This was in spite of the fact that the Chinese leaders at the same time judged that they needed to maintain good ties with us. A lot has happened in U.S.-China relations over the past year, from the tenseness of the EP3 episode in April, to the positive image of President Bush and Jiang Zemin standing together in Shanghai last fall, highlighting our shared fight against terrorism.

September 11th changed the context of China's approach to us, but it did not change the fundamentals. China is developing an increasingly competitive economy, and building a modern military force with the ultimate objective of asserting itself as a great power in East Asia. And although Beijing joined the coalition against terrorism, it remains skeptical of U.S. intentions in Central and South Asia. It fears that we are gaining regional influence at China's expense, and views our encouragement of a Japanese role -- a Japanese military role in counterterrorism -- as a support for Japanese rearmament, something that the Chinese firmly oppose.

On the leadership side, Beijing is likely to be preoccupied this year with succession jockeying, as top leaders decide who will get what positions, and who will retire at the Party Congress, and in the changeover in government positions that will follow next spring. This preoccupation is likely to translate into a cautious and defensive approach on most policy issues. It probably also translates into a persistent nationalist foreign policy, as each of the contenders in the succession context will be obliged to avoid any hint of being soft on the United States.

Taiwan also remains the focus of China's military modernization programs. Over the past year, Beijing's military training exercises have taken on an increasingly real-world focus, emphasizing rigorous practice and operational capabilities, and improving the military's actual ability to use force. This is aimed not only at Taiwan, but at increasing the risk to the United States itself in any future Taiwan contingency. China also continues to upgrade and expand the conventional short-range ballistic missile force it has arrayed against Taiwan.

Finally, Mr. Chairman, let me say that with regard to North Korea the suspension last year of engagement between Pyongyang, Seoul and Washington reinforced the concerns I cited last year about Kim Jong Il's intentions towards us and our allies in Northeast Asia. His reluctance to pursue a constructive dialogue with the South, or to undertake meaningful reforms suggests that he remains focused on maintaining internal control at the expense of addressing the fundamental economic failures that keep the North Koreans mired in poverty, and pose a long-term threat to the country's stability.

North Korea's large standing army continues to be a primary claimant on scarce resources, and we see no evidence that Pyongyang has abandoned its goal of eventual reunification of the peninsula under the North's control.

Mr. Chairman, I skipped some things, and I'll end there, because I think we want to move to questions as soon as you can. I wonder, Mr. Chairman, if I can just respond for a minute to both of your opening statements on the whole terrorism issue and how we proceed ahead, because I think it's important. And you get to speak to the American people -- so do I -- and I think it's important that they hear us on this question.

We welcome the committee's review of our record on terrorism. It's important we have a record. It is a record of discipline, strategy, focus and action. We are proud of that record. We have been at war with al Qaeda for over five years. Our collective successes inside Afghanistan bears a reflection of the importance we attach to the problem, and a reflection of a demonstrated commitment to expanding our human assets, technical operations, fused intelligence, seamless cooperation with the military. These are things we have been working on very hard over the last five years.

During the millennium threat, we told the president of the United States that there would be between five and 15 attacks against American interests both here and overseas. None of these attacks occurred -- primarily because of the result of heroic effort on the part of the FBI and the CIA inside the United States and overseas to ensure that those attacks were not successful.

A year later the Cole was bombed. We lost a battle there. Part of the problem that we need to address as you look at this is not only to assess what we can do unilaterally, or in conjunction with our military and law enforcement colleagues, but the countries out there who have often deflected us, or have not recognized there was a terrorism problem, who didn't help us solve problems that we could not solve simply on our own. In the last spring and summer we saw -- in the spring and summer of 2001 -- again we saw spectacular threat reporting about massive casualties against the United States. These threat reportings had very little texture with regard to what was occurring inside the United States. We again launched a massive disruption effort. We know that we stopped three or four American facilities from being bombed overseas. We know owe saved many American lives. We never had the texture that said the date, time and place of the event inside the United States would result in September 11th. It was not the result of the failure of attention and discipline and focus and consistent effort, and the American people need to understand that.

What Tom Ridge is doing today in protecting the homeland, in thinking about our Border Patrol policies, our visa policies, the relationship between all our organizations -- airport security -- all of these things must be in place -- intelligence will never give you 100 percent predictive capability on terrorist events. This committee has worked diligently over the last five years, and the American people need to understand that with the resources and authorities and priorities the men and women of the FBI and the CIA performed heroically. Whatever shortcomings we may have, we owe it to the country to look at ourselves honestly and programmatically. But when people use the word "failure" -- "failure" means no focus, no attention, no discipline --and those were not present in what either we or the FBI did here and around the world. And we will continue to work at it. But when the information or the secret isn't available, you need to make sure your backside is protected. You need to make sure there is a security regime in place that gives you the prospect of succeeding -- and that's what we all need to work on together.

The decision of the president to go inside the sanctuary and take the war to the Taliban and al Qaeda may be the most significant thing that happened, because all of this preparation has resulted in destroying that sanctuary, even as we chase everybody around the world. We have disrupted numerous terrorist acts since September the 11th, and we will continue to do so with the FBI. And we welcome the committee's review. It is important for the American people. But how we paint it is equally important, because they need to know that there are competent men and women who risk their lives and undertake heroic risks to protect them. Thank you, Mr. Chairman. Thank you, Mr. Vice Chairman.

SEN. GRAHAM: Thank you, Mr. Director. Mr. Director, we are all concerned about the aftermath of September 11th and what we are doing in order to reduce the prospects of a similar horrific event in the future. One of the issues that you discussed was the fact that Osama bin Laden did not believe that the United States would retaliate in the way it did. What was the basis of bin Laden's failure to appreciate what the consequences of his action should be? And what is your assessment of the similar feelings of other terrorist groups, or of the leaders of the nations that you have described as being the most threatening to the United States as to what U.S. response would be to their actions against the interests of the United States here in the homeland or abroad?

MR. TENET: Well, sir, obviously in my statement -- well, I have never had a chance to talk to bin Laden -- I would love the opportunity some day, and I speculate. But I think that the importance of the sanctuary -- I think he always believed it would be denied as a place where we would operate directly. And I think the importance of devastating the central command and control node can't be underestimated. The disruption that's occurred is formidable. But just as you disrupt their -- and Afghanistan will not be replicated other places in the world. Other governments with whom we are working with will have to step up to the challenge of recognizing that just because it is Americans who are killed, in fact in the World Trade Center many, many people from many nations were killed. Their law enforcement practices, their visa control systems, their willingness to change the laws to allow us to work with them to disrupt these organizations means that what we need to tell these people is that you cannot operate any place safely in the world, and that rather than go up and down -- rather than a focused -- you know, one of the problems is people somehow -- my fear is six months from everybody will say, Well, the World Trade Center has receded -- so the leadership that the president has shown and the country has shown is going to make a marked difference, because they need to understand that there will be consequences that are very real and very direct to their ability to try and hurt us.

Having said that, we know they'll continue to plan. We know that they will hurt us again. We have to minimize their ability to do so, because there's no perfection in this business.

The importance of Tom Ridge's effort in unifying homeland security cannot be underestimated as the important back end to what we and the FBI do. And as we get better at this, what we hope to do is change the security environment that terrorists operate in. After all, if you look carefully, in our closed session today, if you look at the profile of these 19 or 20 people, most were here legally. Most operated almost as sleeper cells. Most gave the FBI no probable cause to believe something was going to happen -- compartmentation of the information -- all of these are very difficult things for us to deal with. And we have to get after it. So that's how I'd answer the question, sir.

SEN. GRAHAM: Mr. Ford, does the State Department and our diplomatic corps feel as if it has sufficient understanding of the opinion of our adversaries, whether they be governments such as those who were described as the axis of evil governments, or non- governmental groups such as other terrorist operations -- what their expectation is of a U.S. response to an act that would -- by them -- that would be adverse to our interests?



Assistant Secretary of State for
Intelligence and Research


MR. FORD: Mr. Chairman, I think we all would agree that we never have enough information. We can always use new knowledge about all of these threats that we face. I think that the State Department in general -- our embassies overseas, the people here in Washington -- feel as if both the president and the Congress is providing us with the resources that we need to be able to not only understand the problems, but also at least from a Department of State perspective express U.S. views overseas through our diplomats.

We -- I think if I had to point to one area which I think that the State Department has as a priority, it is increasing the number of young diplomats overseas who are reporting basically on an unclassified basis on what various groups -- students, labor, business, political leaders to be. Much of that reporting over the last 20 years has been decimated by budget cuts and reductions in the size of the embassies. Secretary Powell is committed to changing that. So I think that we in INR are very grateful for the changes that we see occurring, because there is going to be more information, more knowledge for us to analyze and provide to the secretary and to others in the community.

SEN. GRAHAM: I am going to pursue this line of questioning further. The order of questioning will be the vice chairman followed by Senators Roberts, Rockefeller, Bayh, DeWine and Kyl.

Mr. Vice Chairman?

SEN. SHELBY: Thank you, Mr. Chairman. Director Tenet, I think your statement today is -- you have laid out a lot of the challenges and a lot of the successes, and we all know that - -maybe the public doesn't all know of a lot of the successes of the CIA and the FBI and NSA, and other members of the intelligence community. We all know that we have some of the best dedicated people that you could recruit in America at the CIA, at the FBI, at the NSA -- and we can go on -- and the DIA -- and you name it.

But some of us are worried about whether the system they are in is designed to fail. And this would be part I think of our overall inquiry which we will be into. But that's another day, and that's a big thing. Because what we are really interested in here is designing a system, helping the intelligence community with funds and with legislative structure to do the jobs -- to do the job to protect the security of the American people. I think we are all in the same book, and that page and book.

But with that in mind -- and you went through it some a few minutes ago, Director Tenet, why were we utterly unaware of planning and execution of the September 11th attacks? In other words, what went wrong? We know that you are not going, as you laid out, you are not going to ever be 100 percent. But these attacks were so well planned, so well executed -- I know they caught us all by surprise -- had to catch you by surprise. You weren't shocked, because you warned us before about these type attacks. But the American people ask these questions. We will be asking them, and I know you have asked yourselves those questions.

MR. TENET: Well, sir, it's an important question, but I have to tell you that when you do this every day -- and we do this every day --

SEN. SHELBY: Absolutely.

MR. TENET: The shock was that the attack occurred, but not the fact that the attack -- where it occurred -- not the fact that the attack occurred. So -- was there a piece of information that was collected that led us there? No. Did we know in broad terms that he intended to strike the United States? There is no doubt about that. He started in 1993. They tried to come over the border in Canada during the millennium threat. The operational difficulties of what you are up against in the United States, when you take the profile of these people -- and Dale Watson should speak to this himself -- and what they showed, and how little evidence they provided to us in terms of this -- Is something we are now evaluating in terms of what is the profile? How do they operate? How do we talk to states and locals about things? What other changes need to be made?

But is there some piece of -- is there a piece of information out there, sir, that nobody saw? That's not the case. In fact, in July and August, when we saw the operational tempo around the world go down overseas, it was very clear that what had been planned had been delayed. It was very clear in our own minds that this country was a target. There was no texture to that feeling. We wrote about it, we talked about it, we warned about it. The nature of the warning was almost spectacular. Some people in town thought that this was deception. It was never deception, because of how much we understand this target.

Did we have penetrations for the target? Absolutely. Did we have technical operations? Absolutely. Where did the secret for the planning reside? Probably in the head of three or four people. And at the end of the day, all you can do is continue to make the effort to steal that secret and break into this leadership structure. And we have to keep working at it. There will be nothing you do that will guarantee 100 percent certainty. It will never happen.

SEN. SHELBY: What have we learned? What have you learned in the intelligence community that you can share in the open session with the American people?

MR. TENET: There are some positive things that have been learned about what you talk about about future structure, about all of the fusion that has occurred -- the federation of military intelligence and its analysis; the fusion of how NSA, CIA, and the community operates in terms of bringing all sources together, which we have worked on quite hard over the last five years; the notion that you have -- people have said individual disciplines functioning autonomously where information is not shared is simply untrue. The importance of continuing clandestine human operations to penetrate these groups, the importance of continued cooperation with allied countries around the world who help you do this business is absolutely indispensable. The resources that the president has provided us to enhance our flexibility, to maximize our ability to operate, is a very important lesson. You can't operate in 68 countries without a substantial resource base, and he has given us that opportunity.

So there is an extraordinary knowledge of this target. We did not start from a standing start. We wouldn't have succeeded the way we did with our military and our bureau of colleagues in Afghanistan if we had not known how to act, and a lot of the reforms that we have been talking about had not been put in place. The relentless pursuit of the secret and the human penetration of these organizations is something that we have to continue to attempt to do. And that progress over the last five years has been substantial.

MR. FORD: Mr. Chairman, could I -- I had a comment. INR, as you know, is a very small organization. We are not representative of all of the bigger intelligence organizations. But I think that at least from our perspective, my perspective, I learned one important thing -- is that for me getting more money or even more people was not what I -- since I didn't get any of that -- it wasn't something that I really missed. The fact is that what I couldn't have gotten by without were my people -- my experts -- people that had been on the job 25, 30 years, 15 years -- you can't replace them with 10 rookies. You have one old hand that might train 10 rookies, but you are not going to be able to have the rookies come in and start producing right away -- something that you have to build for the future. I don't know about the rest of the community -- I think they face the same problem we do, is that over the next five to seven years we are losing a good portion of our expertise. So that while we don't have a problem recruiting new people, we are going to have to work on retaining the ones that we got, and making sure before they leave us that they leave us a legacy of students and apprentices that have learned all the tricks of the trade before they leave. And that's something that I think you can help the DCI and all of us with in terms of thinking long term with personnel. I know it's expensive. I know it's a problem.

You can't have good intelligence without good people, period.

MR. TENET: Mr. Chairman, I think it's true --

SEN. GRAHAM: Mr. Director.

MR. TENET: -- I think it's true of all of us, between 30 -- by the year 2005, between 30 and 40 percent of the men and women of CIA will have been there for five years or less. We're about to overhaul the entire compensation and rewards system to reflect on keeping the best and the brightest and retaining expertise. But at the end of the day, people matter, and expertise, as is embodied in our counter- terrorism center and knowledge of the target, can never be replaced.

SEN. SHELBY: We can help, and we will help. Thank you, Mr. Chairman.

SEN. GRAHAM: Senator Roberts.

SEN. PAT ROBERTS (R-KS): Yes, thank you, Mr. Chairman. There has been a nationwide alert, from time to time, the law enforcement agencies and the private sector to prepare for the possibility of attacks against the critical infrastructure facilities. I know you've had some sit-downs with the Department of Agriculture. When we asked the so-called experts in Emerging Threats Subcommittee in the Armed Services Committee, What keeps you up at night?, they would refer to bioterrorism; cyber attacks; chemical warfare; a weapon of mass destruction; i.e. the dirty bomb that you referred to; their use of explosives. But you can list about 100 things, and they'll probably do 101, because that's the definition of a terrorist.

We've had a discussion about the possibility of anybody conducting what I call agri-terrorism, or an attack on our food supply, food security. I know when we asked the FBI, what?, two, three years ago about the risk and the chance, the risk was very high in terms of chaotic results all throughout the country not only in farm country from an economic standpoint, but the specter of having the National Guard, you know, handing out your food supplies to people who are trying to hoard food.

My question to you is, where is that in your status of worries? And what terrorist groups are the likeliest to conduct such operations?

MR. TENET: Well, sir, first, I met with the secretary of Agriculture last week to discuss this, to discuss a tighter relationship between us in working through this. But one of the things that we're learning, and we'll talk a bit about it more in closed session today, is the BW piece of this seems to be more advanced than anything else, and the focus on pathogens and the development of different strains of diseases. If you think about what they will try to do to us, this al Qaeda/Sunni network, psychological disruption, eat away at the fabric of your people, make it difficult to detect, and when you think about agri-terrorism, the food process, all those things, this is something we have to get ahead of. This is something we need to think through a lot harder, because there is vulnerability.

Now, how you quantify it at this moment is -- I don't have an ability to quantify it, but you do know that you better get ahead of it now, because of the way they exploit vulnerabilities.

SEN. ROBERTS: I've said that to Tom Ridge and others. It is so easy to do. And I think the results would be absolutely catastrophic.

Let me ask you another question on assessment of the threat to the United States and our own hemisphere. If there's one area that really represents problems to the daily life and pocketbooks of Americans in regards to drugs, in regards to immigration, in regards to border safety, in regards to energy -- because Mexico, and also Venezuela do supply a great majority of our energy, not to mention trade -- it is Latin and Central America, or what we refer to to the 31 countries of the Southern Command.

I'm very worried about that, more particularly in regards to Venezuela and a fellow name Hugo Chavez, who I think could be another Castro.

I would appreciate your assessment. You do that on page 21 of your testimony. If you could underscore that a little bit, of the threat to the U.S. within our own hemisphere, and are there organized terrorist cells in Central and South America that could carry out attacks against our country, such as 9/11?

MR. TENET: Sir, obviously, Venezuela is important because they're the third-largest supplier of petroleum. I would say that Mr. Chavez -- and the State Department may say this -- probably doesn't have the interests of the United States at heart. And -- but at the same time, there is a deterioration in the economic and general conditions in that country that he's responsible for. So I think he's a tough actor for us.

(To colleagues) And maybe you want to say some more about that.

MR. FORD: Well, it seems to me -- and I'm not an expert on Chavez or South America -- but when you can't solve your basic, fundamental economic problems, that Venezuela faces, with the natural resources that it has available, you've got to blame somebody. And I think that he's found that it's easier and more politically correct for him in Venezuela to blame us.

SEN. ROBERTS: Well, that's what Castro does.

MR. FORD: That's right. And he also -- that's why he joins with Castro in several occasions in voicing concerns about the U.S. That doesn't bother me so much as long as it's just words. But there are also indications that he is sympathetic and helpful to the FARC in Colombia and various other groups. So that I'm sure that all of us are going to be watching very closely to see what goes on in Venezuela and with President Chavez in particular.

SEN. ROBERTS: Let me ask you the "axis of evil" question, which has started some meaningful dialogue with our allies overseas, more especially our NATO allies. From a counterterrorism standpoint, what is more threatening about Iran, Iraq and North Korea, in view of the president's State of the Union message, than other countries that are listed as state sponsors of terrorism?

MR. TENET: I'm sorry, sir, what is more -- ?

SEN. ROBERTS: What is more threatening about these countries? I'm looking for -- obviously, the president has indicated you have to go to the source. He has put these countries on notice. There is what I call some meaningful dialogue now as to what that really means. And what I'm asking you to do is to say from a threat standpoint, from a counterterrorism standpoint, what's more threatening about these countries than the others?

MR. TENET: Well, sir -- first of all, the Iranians and their support for Hezbollah, I mean Hezbollah is a world-class terrorist organization, and their continued use of Hezbollah and their own surrogates is a very fundamental challenge to American interests.

SEN. ROBERTS: I'm for the speech, by the way. I just would like to get a take on it.

MR. TENET: Yes, sir. But from a terrorism perspective, their continued use of both terrorist groups and their own IRGC, not only to plan terrorist acts, but to support radical Islamic groups, radical Palestinian groups, undermine the peace process, when you couple that support with a WMD profile, ballistic missiles, nuclear capability, I mean, you have -- in a regime controlled by hard-liners, you have a series of twin issues in the convergence I talk about that poses substantial risk and challenge to the United States, and we have to pay attention to it.

The North Korean piece is -- I would say is, look, the ballistic missile threat that we talked about in our estimate in my testimony, you know, every -- the Scud Nodong exports are the basis of which so much of this ICBM capability is going to be developed and the ability of countries to mix and match those frames and further threaten us, not just with short-range ballistic missiles, but with longer-range missiles that you have to think about as becoming more prominent to you.

And the Iraqi piece, as I referenced, you know, the WMD profile I gave you and my interest in being very careful about what -- was there a convergence of interest here between al Qaeda and the Iraqis? Don't know the answer to the question yet -- pursuing it very, very carefully. There was a press story to say -- today that said CIA dismisses these linkages. Well, you don't dismiss linkages when you have a group like al Qaeda who probably buys and sells all kinds of capabilities for people who have converging interests, whether Sunni or Shi'a, and how they mixed and matched -- training capabilities, safe harboring, money -- something we're taking a look at.

So nobody dismisses anything. Everybody's on the table, and these networks of terrorism should no longer be thought about purely in terms of the state's interests, what they say publicly, what their obvious interests are and how they see the benefit in hurting the United States.

SEN. ROBERTS: I really appreciate that. Let me ask you one more question on what the coffee klatch or the coffee club in Dodge City, Kansas, would ask. And that is, there have been a number of reports, either right or not, that the CIA had downgraded its human intelligence effort in the Afghan region. I know that you have stated very clear that it's not the case, that there were serious shortages of officers within the necessary language qualifications. That probably is the case. And there was a disinclination to get too close to the terrorist networks. Now I'm not trying to put that as a fact; I'm just saying that's background.

But what fellows at the Dodge City coffee klatch ask me is, if John Walker Lindh could get to talk to Osama bin Laden, why in the heck couldn't the CIA get an agent closer to him?

MR. TENET: Well, I'm not going to do this in open session, but you better tell everybody at the cafe it's not true.

SEN. ROBERTS: I got you.

SEN. GRAHAM: Thank you, Senator.

MR. WATSON: Senator -- Mr. Chairman, may I just quickly comment?

Just -- I know you're interested in Department of Agriculture, Senator, and they receive all our threat warnings in the information (sic). And additionally, a Department of Agriculture detailee is with us since 9-11, and we're considering that in our Joint Terrorism Task Force.

SEN. ROBERTS: I appreciate that. I talked with them yesterday, and they indicate if there was a stovepipe, it doesn't exist anymore.

MR. WATSON: That's right.

SEN. GRAHAM: Senator Bayh.

SEN. EVAN BAYH (D-IN): Thank you, Mr. Chairman.

And thank you, gentlemen, for being with us today. I am grateful for your service to our country. I'm reminded of -- I think it was a quote put on the cover of the budget submission last year, quoting Napoleon, to the effect that a well-placed spy is worth two divisions.

With the war that we're fighting today, I think that's probably an underassessment. So what you do is vitally, vitally important.

I'm going to direct my questions to Director Tenet. Any of the rest of you who would like to jump in, please feel free to do so.

MR. TENET: They would love to comment, too, Senator. (Chuckling.)

SEN. BAYH: I'm sure they -- I'm sure they would.

I was reminded of something Abraham Lincoln also once said, Director, when -- about your being the only one who was given the opportunity to make an oral statement -- it's about being run out of town on a rail, except -- he said, "Except for the honor of the thing, I would just as soon have passed it up." So in any event, thank you for your presentation.

I'm going to ask about Iran. And first like to lay the foundation here a little bit. You indicated, Director, that you've seen little change in Iran's sponsorship of terrorist activities. Based upon that, I would assume that you would still consider them to be the foremost state sponsor of terrorism in the world. That true?

MR. TENET: Yes, sir.

SEN. BAYH: You also indicated that they were involved in I think what was across-the-board pursuit of weapons of mass destruction. Now one of their top officials in the last several days has come out and categorically denied that they are involved in seeking chemical, biological or nuclear weapons. So I would assume that his statements are more proof of their mendacity than their innocence, in your opinion.

Is that -- is there any doubt in your mind, any doubt whatsoever, that they are vigorously involved in pursuing weapons of mass destruction?

MR. TENET: None whatsoever, Senator.

SEN. BAYH: Russia and China, you indicated, have been involved in assisting, directly or indirectly, their pursuit of weapons of mass destruction. What should we think about that? Are they -- if Iran and some of these other regimes are an axis of evil, are Russia and China involved with enabling evil?

MR. TENET: Well, sir, I would say that, first of all -- and it's all separate. The reasons may be different. And at times we have distinctions between government and entities. And that's always -- and I don't want to make it a big distinction, but sometimes you're dealing with both those things.

SEN. BAYH: The governments in Beijing and Moscow don't have --

MR. TENET: No, sir, I didn't say that. There are instances where you have entities that are doing business. But if you look at the -- if you look at the Russian relationship with the Iranians, the long term, going back to the time of the czars, an interest in a strategic relationship there for a whole host of reasons, access to water, oil and gas, whatever it is.

What is difficult to understand is why the minimal amount of money you would gain from those kinds of activities in generating the kind of threat they pose, not just to us, but to the Russians and Russian interests around the world, would continue to allow cooperation to occur by entities, or -- with or without the government's knowledge -- why the government can't do more to get on top if this and ensure that we don't create a ballistic missile threat in the region that will only result in other countries in the region acquiring that capability, will only result in all that. And quite, frankly, this is an issue of dialogue between the president --

SEN. BAYH: What's your answer to that question? It's so manifestly not in their own long-term self-interest.

MR. TENET: Sir, it must be about -- it must be about their perception about how they gain influence. We haven't talked about conventional weapons and the importance of that. But as you're trying to resurrect a modern economy, you don't have a lot of chips to play with. Weapons are one thing you have to play with, expertise of people and other things. And it's incongruous in terms of, on the one hand, you see a Russian behavior and some very positive things President Putin has done in terms of reforming their economy and moving in the right direction; on the other hand, a record on proliferation that I think belies a commitment to the kind of issues and norms that we would expect them to pursue. So this is an ongoing discussion.

But clearly, expertise, foreign assistance, whether it's Russian or Chinese, is the escalator clause in anybody's ability to quickly mix and match capabilities and develop indigenous capabilities. And it is a problem. And you have to get after, in the Chinese sense, a deeply embedded PLA interest in earning income from these kinds of activities. You have to get after strategic influence, particularly what it may buy you in places like the Middle East, where your country will have an increasing oil dependency in the future, and the thought about how you compete against the United States.

But they pursue these for their own reasons. They are inimical to our own interests and relationships that we would like to establish, and they will threaten American forces and interests. So these are problem areas that we have to continue to talk about every year and put them out in the open because they're a problem.

SEN. BAYH: It seems to me, in evaluating whether the Russians and the Chinese are truly being cooperative in the war on terror, the fight against proliferation needs to be somewhere fairly up high on the list.

MR. TENET: And it's interesting that in the war on terror, they have been cooperative. You see, everybody makes -- everybody checks different boxes. We have had good cooperation with the Russians and Chinese on the war on terrorism, and it's an important -- you know, this has given the president and the secretary of State an opportunity to try and transform relationships.

SEN. BAYH: What about the -- getting back to Iran for a minute -- and the reason I'm focusing on Iran, Director, is I believe that in the long run, this may be one of the foremost threats facing our country, from that regime. What's the agency's analysis of the domestic situation within Iran? You mentioned the fact that the moderates had won the last several elections. What's the assessment in terms of them eventually gaining more control over the security and intelligence apparatus in that country?

MR. TENET: Well, as I noted in the statement in some detail, I think the jury's out. I think -- you know, here's some interesting things to think about. Sixty-three percent of the Iranian population was born after 1979.

They don't have any context to judge this. There have been elections. There's a political dialogue in the country. There's a vibrancy to it.

It's not Iraq in that sense. There are private relationships where these things are discussed. At the same time, you see an immature political opposition. And the immaturity of the opposition is, I think, something to focus on, dealing with an entrenched, tough security apparatus that uses non-elected vehicles to break back and make it more difficult for reform to occur as fast as it might.

So it's an interesting and open question we have to continue to follow. So, on the one hand, you have behavior on terrorism and weapons of mass destruction that you are deeply troubled about. On the other hand, there appears to be a very big opportunity with people who may want to have nothing to do with all that or something to do with all that. The Iranians may well, in any event, want weapons of mass destruction for their own historic sensibilities of who they are in the region.

But the point is, this is a very conflicted society that is continuing to evolve. And the question is, when does good overcome bad, or when do people who want reform -- how fast does the opposition mature? Who's the leader that takes them there? How does it really flow? These are very interesting, difficult questions for us.

SEN. BAYH: I assume we're allocating significant resources to --

MR. TENET: We're paying a lot of attention to those targets, sir.

SEN. BAYH: Mr. Chairman, I have difficulty seeing the lights from here. Is my time --

SEN. GRAHAM: I'm afraid you're on the red.

SEN. BAYH: I'm on the red. Okay, very good. I'd like to thank you, gentlemen. Director, I'd like to thank you. You're doing a very good job, and we want to help you any way we can.

SEN. GRAHAM: The next questioners will be Senators DeWine, Kyl and Edwards. Senator DeWine.

SEN. MIKE DEWINE (R-OH): Thank you, Mr. Chairman. Mr. Watson, have we had long enough to tell what impact the U.S. Patriot Act is having, the anti-terrorism bill? Or is the jury still out on that?

MR. WATSON: The jury is still out on that. But, Senator, it's been a help, particularly change in the words of the FISA, the use of the grand jury material, detainees through the INS process and those types of things. But it has been helpful and it will continue to be helpful.

SEN. DEWINE: We're interested, many of us, of course, are, in seeing what else needs to be done.

MR. WATSON: There are some items we have under discussion with the department. But as of right now, particularly those areas I mentioned, particularly the national security letters, we're able to get out much quicker. We appreciate the Patriot Act.

SEN. DEWINE: Mr. Tenet --

MR. TENET: Senator, could I comment on that?

SEN. DEWINE: Please.

MR. TENET: I think that --

SEN. DEWINE: I'm just trying to help you out here. You don't have to answer all the questions. Go ahead, Mr. Tenet.

MR. TENET: Access to criminal information, grand jury information, for threat purposes, we've now been provided. It's been a very meaningful contribution to our understanding of a lot of things. We can now do trend analysis on. It's been very, very helpful.

SEN. DEWINE: And that was one of the things that we hoped --

MR. TENET: Enormously helpful to us.

MR. WATSON: That has been a tremendous help, yes, absolutely.

SEN. DEWINE: Good. Mr. Tenet, let me ask you about -- speculate, if you could, if you're comfortable in talking about it, in regard to training camps. Training camps have been destroyed. How long does it take to set camps like that back up again? And would you want to speculate about that in public about the ability to do that?

MR. TENET: Well, I guess that's all going to be a function, ultimately, of the interim government, its evolution, our influence --

SEN. DEWINE: Well, I don't mean necessarily there.

MR. TENET: Well, other places. As you know, there are other places --

ADM. WILSON: I'd like to comment on it.

SEN. DEWINE: Admiral.



U.S. Navy Director, Defense Iintelligence Agency


ADM. WILSON: What was removed in Afghanistan from al Qaeda, in my view, was the elimination of their Fort Bragg or their Fort Irwin national training center. And when you arrest terrorists around the world, they come from many different nationalities. They come from different cells and organizations. But virtually all of them have one thing in common. They were all trained in Afghanistan, indoctrinated in the camps. It was truly military-style training that was ongoing. And the best and the brightest of them, they went on up into other kind of terrorist acts.

So it is difficult to establish the scale and the complexity of that kind of an operation, that was unmolested in Afghanistan, somewhere else, because we are committed to this global war on terrorism. It's expensive. You can't hide it too easily and all those sorts of things. But it essentially was as important to them as I think some of our national training centers are to our military.

SEN. DEWINE: That puts it in perspective; appreciate it.

MR. WATSON: And, Senator, the difference, too, is that we knew about the camps in Afghanistan for years. The difference now is we did something about it. If somebody someplace else tries to build a training center, I'm very confident in my colleagues in Defense and FBI and CIA that they won't be there very long.

SEN. DEWINE: I think the president's made that pretty clear. Senator Roberts asked you, Director, about South America. He talked a little bit about the importance of that. And I guess one of the concerns that we all have is that this is our backyard. It's not an area that has been overrepresented as far as our intelligence community.

And now you have all the other problems that we have and all the (drainings ?). We have Colombia. We have Venezuela. We have Argentina. We have the tri-border region. All our drugs come out of this area of the world, or most of them do. We could go on and on and on and on.

So give me a little perspective about how, as the director, you can deal with that as far as the resources that you have. And also, if you could, give me a little insight into what you see going on in Colombia. Let's assume that the peace negotiations don't turn. We hope they do. What do you see the FARC doing in the future, and what kind of threat is that to U.S. citizens in Colombia? For example, we see the FARC moving into urban areas more.

MR. TENET: Well, let me get to part two, and then -- . With regard to the first question -- and we should talk about this in closed session, because it goes to the heart of priorities and allocation of people and resources -- but we are stressed. And the war on terrorism alone has resulted in a massive migration of people and resources, and we're trying to balance all these things. Your back door is vitally important. Drugs is very, very important.

But there is a tension about how we allocate these things, Senator, that we're trying to work through right now and make the best judgments we can about how we allocate people around the world. So it's -- Carl, do you want to say something about that?

MR. FORD: On that first part, I would only add that all of us, I think have noticed the coming together of drug traffickers, organized crime, international organized crime, and terrorists, even in the sense of just the logistics arrangement, pass money, do favors for, so that anywhere you have drug traffickers and organized crime and terrorists, you're going to have a problem. Clearly there are a number of places in our own hemisphere that have such problems. Colombia, other parts of South America come to mind.

This is one that it's very difficult to try to focus on the immediate problem. I think we in the intelligence community have to learn flexibility. We have to realize that if you push one button, four buttons someplace else are going to pop out and that we have to design an approach that gives us much greater coverage and depth at the same time. And that's a challenge.

SEN. DEWINE: Director, can you just -- I know my time is up. Could you just answer briefly the question on Colombia?

MR. TENET: Well, obviously there's an election coming up. Obviously the peace process is not going forward. We are concerned that the FARC is going to up the ante here and threaten -- and particularly threaten not only Colombians, but us. So this is a situation that we're all watching very carefully.

We have to see how these elections come out and how a new president decides to engage, and then look at how we want to continue on with Plan Colombia and how we think about this problem. But the drug problem is still there. The narco-trafficking, the insurgency, all of these things continue to undermine the fabric of this country. And we need to think our way through, particularly after the election, where we're going to be.

SEN. DEWINE: Thank you, Mr. Chairman.

SEN. GRAHAM: Thank you, Senator. Senator Kyl.

SEN. JON KYL (R-AZ): Thank you, Mr. Chairman. First, to Mr. Tenet or other members of the panel, I'm interested in the policy concomitant to your concerns expressed about controlling technology transfers, especially, as you said, because of the dual-use capabilities of weapons of mass destruction and missile-related technologies. What would be useful to you to better detect and therefore deter such technology transfers?

MR. TENET: From the policy side, sir?

SEN. KYL: Yes. In other words, you've testified that this is a big problem. And therefore, you must have an idea of what might be done to eradicate the problem.

MR. TENET: Sir, one of the things we have designing a new regime is what you find is there are lines that are drawn, that activity falls beyond whether it's a complete missile system or components of a missile system. And I haven't looked at the (NTCR?). But it is a mistake to assume that the regimes that are in place provide us the kind of security that we're looking for. And it's a very important question. I haven't thought through how I'd redesign it. But I know that a lot slips underneath.

And the problem with this issue is as follows. The indigenous capabilities of the people you care about the most, the component that falls outside of the regime, is all they may need to complete that work. So you may have design regimes at one point in time where there was a have-and-have-not quality to this; in other words, the supplier was the dominant actor you wanted to watch.

Well, that's not true anymore. And as a consequence, whatever we design has to acknowledge the fact that things that come in under the transom, that don't neatly fit into a verification regime or a legal framework, are every bit as worrisome to us. But it's an important question.

MR. FORD (?): Well, I think that this also goes back to, I think, Senator Roberts' question; the issue of both weapons of mass destruction and terrorism. We have this unusual circumstance where the non-state terrorists -- we know they want them. We know they're trying. But they have not yet succeeded in getting weapons of mass destruction.

On the other hand, we have the states that traditionally supported terrorism that are less involved, to some extent, than they were in the past. But they're going gangbusters with weapons of mass destruction. If you look out five, 10 years and you see both of these trends continuing and you think about New York City, you think about the Pentagon, you think about the horrendous danger that the world faces, not just America, all of a sudden weapons of mass destruction takes on a different context.

Before 9/11, we could talk about terrorism and say, "Let's get tough with this and let's get tough with that." Some of our allies didn't even support us. The difference now is when we talk about proliferation, rather than (a new scheme ?) is that we need "You're either with us or you're agin' us."

SEN. KYL: Sometimes we're our own worst enemy. We've not been as careful about being able to identify the end users, which is what both of you are getting to here. We used to pay a lot of attention to that, and I think you want us to pay more attention to it. And so may I just request it -- and the reason I point to the light is I have two or three other questions here, and we could talk about this all day, but I really would appreciate -- I think the committee would appreciate receiving some kind of memorandum from you about ideas of what will be useful to the intelligence community to get a better handle on this problem of technology transfer, dual-use issues, end users and the like. That would be very, very helpful to us.

I was at the Wehrkunde in Munich, Germany, the annual security conference, with our NATO allies. And there were some interesting comments at that conference. I just wanted to confirm a couple of points, Director Tenet, that I think you made earlier.

Minister of Defense Ivanov was a bit indignant about suggestions that Russia was proliferating to Iran, for example, and said, "There is absolutely no evidence that Russia is providing any technology transfer to Iran," although he did say, "except for the nuclear program, which is for peaceful purposes." Is he correct in that statement?

MR. TENET: No, sir. And Sergei and I have talked about this privately and directly. So, no, we respectfully disagree.

SEN. KYL: Thank you. And let me confirm what I think you told Senator Bayh. Is it still correct to call Iran today the world's largest state sponsor of terrorism or proliferation of terrorism?

MR. TENET: Yes, sir, I believe that. Does anybody have a different view?

SEN. KYL: Okay. The reason I mentioned that is that the president's speech raised a lot of consternation among some of our allies when he referred to the "axis of evil."

I suggested that he wasn't talking about a group of three countries that were carefully calibrating their policies together, but rather three sides of a triangle, probably identifying the three toughest nuts to crack here in terms of states. And in addition, of course, he made the point there are many other kinds of organizations. Is that perhaps a little -- a more correct way to look at what you think he might have intended to say?

MR. TENET: I believe so, sir, but --

SEN. KYL: And in that regard, that all three of these countries deserve the attention not just of the United States, but we can certainly use the help of our allies in crafting policies -- that may or may not involve military means -- but in crafting policies that would direct our attention jointly to these three separate and big challenges?

MR. TENET: Yes, sir, and that their participation with us is absolutely essential if we're not going to experience the outgrowth of their behavior in some catastrophic way as well.

SEN. KYL: Mr. Chairman, I can't tell from the lights either, but am I on red?

SEN. GRAHAM: You're in the red zone.

SEN. KYL: Thank you. Thank you very much.

SEN. GRAHAM: Senator Edwards.

SEN. JOHN EDWARDS (D-NC): Thank you, Mr. Chairman. Good morning, gentlemen.

Director Tenet, I was on the ground in Afghanistan a few weeks ago and had the opportunity to meet with our intelligence -- some of our intelligence operatives there and to see the conditions under which they're operating. And I have to tell you it was very impressive -- the professionalism, the hard work they're doing, working 24 hours a day, under very, very difficult conditions, extreme weather. There may have been running water where I was, but I didn't see it. It was a very impressive operation, and the information they had was also very impressive. So I wanted to tell you that firsthand.

MR. TENET: Thank you, sir. They're great people.

SEN. EDWARDS: Yeah, very impressive.

But it's obvious there's a lot of work left to be done. Is bin Laden still alive?

MR. TENET: Don't know, sir.

SEN. EDWARDS: When is the last time we had information indicating he was still alive?

MR. TENET: I'd be happy to talk about all of this in closed session this afternoon.

SEN. EDWARDS: Is there -- I understand that. Is there any information you can give us about that publicly?

MR. TENET: No, sir.

SEN. EDWARDS: Same question about Omar.

MR. TENET: Oh, I believe he's alive, sir.

SEN. EDWARDS: Okay. And can you give us any information publicly about the last time we knew his whereabouts?


SEN. EDWARDS: Let me switch subjects, if I can, here, to the United States, and this -- Mr. Wilson (sic), let me direct these questions to you. What information can you give us publicly about the presence of al Qaeda cells here within the United States and the extent to which you believe we are able to monitor their activity here, without giving away the information that --

MR. WATSON: Sure, and I'm sure we'll talk about this in closed (session) a little more --


MR. WATSON: There are hundreds of investigations that we have open. I'll comment on that. An interesting point that Senator Shelby raised, I probably should address is, you know, of the 19, the commonalities that we saw in that, a key point to remember is, the 19 individuals all came in legally in the U.S. Thirteen of the 19 came in real late in the process -- May, June, July of this past year.

The question is -- and I think, for -- that Senate Shelby was hitting at is, why didn't we detect any of these people? The answer is, there were no contacts with anybody we were looking at inside the United States.

If they needed a driver's license, they paid somebody 50 to $100 to do it. And there's a whole set of commonalities, which I'll be glad to talk to you about in the closed session.

But the answer to your question is, there's an ongoing, very active program of identifying individuals and where these individuals come from where we get those leads are from the CIA and from the DIA document exploitation in Afghanistan. There's a whole myriad of things that happen under this program.

And back to Mr. Tenet's statement, George's statement, quite honestly, with zero contact in the United State of any of our known people with the 19 individuals coming here that we had no information about, intelligence-wise, prior to, through no one's fault, that's how they did it.

SEN. EDWARDS: Can you, without disclosing anything that would in any way hinder your investigation, can you tell us whether, yes or no, are there al Qaeda cells operating within the United States today?

MR. WATSON: I think I'll hold that conversation in the closed hearing. There are individuals, obviously, that I'm mentioned. Are there core cells like the 19? Have we identified anybody that carries the commonalities of the 19? No, not at this process. But if you go back and look at the figures -- and I know I'm on your clock, and I'll be real quick about it -- if you go back and look the commonalities of the age of the 19, how many of those individuals have come in from the countries that the 19 were from -- Saudi Arabia, UAE, Lebanon and Egypt -- you have, since December 31st of 1999, you have over 70,000 individuals that have entered the United States under that category. So it's a huge, huge problem, and I look forward to talking to you some more about it -- those numbers.

SEN. EDWARDS: Okay. If I can broaden that question -- and again, limit this to what you're able to say publicly, please -- but Hezbollah? Islamic Jihad? Hamas? cells within the United States?

MR. WATSON: Presence in the United States? Absolutely.

SEN. EDWARDS: They all have cells within the United States?


SEN. EDWARDS: Can you tell us anything, without giving us any details, of the pervasiveness of their presence?

MR. WATSON: No. No, sir, I cannot. No.

SEN. EDWARDS: But that is something you'll be able to tell us (alone ?)

MR. WATSON: Yes, sir. I'll be glad to talk to you about that.

SEN. EDWARDS: Okay. Let me switch subjects. I've been concerned, and in fact I've introduced legislation on this issue, about the possibility and the potential threat of cyberterrorism. What I'd like, if you would, is to have you address that issue, tell me what you're doing, first starting with how serious is the threat, what is the potential damage from cyberterrorism, and third, what are you doing, and are you working with private business to address that problem?

MR. WATSON: Sure. First of all, there is a real threat from the cyber arena. We have the National Infrastructure Protection Center set up. It's not owned by the FBI. It's a community center where we've brought down people from DoD and -

SEN. EDWARDS: Okay, I don't mean to interrupt you, but tell us first how serious the threat is and what the potential damage is.

MR. WATSON: The threat, as we have seen in the al Qaeda investigations and in terrorism investigations and across the board in criminal investigations, the threat posed by cyber on being able to transmit information, communicate with each other is absolutely. And that's the wave of the future. If you're talking specifically, Senator, about the infrastructure, and can someone attack the infrastructure through the cyber means, they have the capability, and that's why we put so much time and effort as a community on this.

SEN. EDWARDS: And what's the potential for harm if they were successful at doing that?

MR. WATSON: Sure. A couple of incidents might be if -- and I'll -- these are truly made-up stories here, but what if the FARC decided that for whatever reason, they wanted to change U.S. government policy about cocaine spraying or in the drug arena, and they had the capability of saying, if you don't stop that, then we're going to turn all the lights off down in the state of Florida, or we're going to disrupt the power to the northeast part of the United States. That's a threat of the cyber. What if -- and I know my time's short here.

But on the defensive side -- and if you think about that for a second -- and I know this is an open hearing -- that is a tremendous threat, that we need the capability to be able to understand that and be able to counter that threat. Just real quick on the statistics: 1,200 cases of our National Infrastructure Protection Center last year, over 55 percent were -- had ISPs involved outside the United States.


Very quickly, Mr. Chairman.

Director Tenet, you're -- you're shaking your head, you obviously agree with that, you consider this a serious threat.

MR. TENET: Yes, sir.

SEN. EDWARDS: Thank you, Mr. Chairman.

SEN. GRAHAM: Thank you, senator.

Senator Wyden.

SEN. RON WYDEN (D-OR): Thank you, Mr. Chairman.

First question, I wanted to begin with you, Mr. Tenet, if I could. What is your degree -- what is your view of the degree to which the Saudis have cooperated in identifying and capturing suspected terrorists --

MR. TENET: Well, sir, I -- I'll give you a short answer and would be pleased to talk about this at length in closed session, but I would tell you that since September 11th we have had excellent cooperation in this regard. And I don't want to go beyond that here.

SEN. WYDEN: Can you -- can you tell us -- and again, I understand the sensitivity in a public session -- whether you think that they are moving to deal with the font of terror, these various religious schools that provide the cadre for terror groups?

MR. TENET: Sir, I'd like to talk about all that in closed session, thank you.

SEN. WYDEN: All right. Cuba is still listed by the administration as a state sponsor of terrorism. Would you give us an example, in your view, of how Cuba currently sponsors terrorism?

MR. WATSON: From the law enforcement's perspective, Cuba certainly harbors a lot of fugitives and individuals that we still are concerned with, particularly the Puerto Rican issue and some other big-time individuals that have been convicted of terrorist crimes.

MR. FORD: My staff also suggests in the answer to the question in my book that there are 20 ETA members in Cuba, and they provide some degree of safe haven and support to the Colombian FARC and ELN groups. Bogota is aware of this arrangement; apparently it does not object.

Cuban spokesmen revealed in August that Sinn Fein's official representative for Cuba and Latin America, who was one of the Provisional IRA members arrested in Colombia on suspicion of providing explosives and training to the FARC, have been based in Cuba for five years. Some U.S. fugitives continue to live on the island.

SEN. WYDEN: What can you tell us again, given the fact that this is a public session, about what is being done to address these threats that you describe? (Pause.) Sounds like everybody's tripping over themselves to answer.

MR. TENET: I just don't -- I don't have an answer, sir.

MR. WATSON: On the law enforcement, on the fugitive side, in public I'd rather not say what we're doing at this point in time. But we're certainly working with the intelligence community.

SEN. WYDEN: Is there anything else to be said with respect to how we're dealing with this in public?

MR. TENET: No, sir, I don't think so.

SEN. WYDEN: All right. We'll ask about that in private.

SEN. PAT ROBERTS (R-KS): Will the senator yield? I'm over here.

SEN. GRAHAM: Senator Roberts.

SEN. WYDEN: I'd be happy to yield to a Kansan.

SEN. ROBERTS: One of the questions that I had was does the intelligence community believe that the resumption of U.S. trade with Cuba could hasten the economic and political reform in Cuba, given the fact that Castro is 77 years old, and that when he passes from the scene -- and I was not aware until your commentary that in terms of state-sponsored terrorism that they were exporting terrorism, certainly to the degree that they were before when they were getting, what, $2 billion from the Soviet Union. But post-Castro with a drug cartel taking over Cuba poses, to me, a greater national security problem.

And I'm wondering about your assessment in regards to trade with Cuba so you can get a -- you know, you can hang your hat on getting some kind of an entrepreneurial peg down there so that we can make some progress.

SEN. GRAHAM: Senator -- excuse me. Senator, could I ask you to hold that question? I think Senator Wyden had a final question he wanted to ask.

SEN. WYDEN: I had -- I did have one last question. With your leave, Mr. Chairman, if we could get an answer to Senator Roberts, and then I can ask one additional one.

SEN. GRAHAM: Certainly --

SEN. ROBERTS: I'm sorry for taking your time, Ron.

SEN. WYDEN: Not at all.

MR. TENET: Senator, can I take that for the record? I don't have an answer off the top of my head.

SEN. ROBERTS: Certainly. Thank you.

SEN. WYDEN: The last question I had deals with technology. I think this would be appropriate for you, Director Tenet. My sense is right now if you look at In-Q-Tel, if you look at the Department of Defense, if you look at the various agencies, we're now having the federal government flooded with vendors and products and a variety of ideas for how to combat terrorism. It is all very constructive. I think we welcome it. And I've read publicly what In-Q-Tel has been trying to do, and I think it's clearly a step in the right direction. But there doesn't seem to be much of a process for evaluating the merits of these various and sundry technologies.

I'm working on legislation now that would establish a national testbed that would allow us, in one place, to look at these various products for potential intelligence-gathering and information-sharing technologies.

We've been pleased at the general comments that you all have made about this idea. I would just like to get a statement in the public domain here whether you think that that is generally a sensible idea to have one place, a national testbed where these products could be examined?

MR. TENET: I haven't thought of that. It makes sense. I think that with In-Q-Tel, though, I mean, it's a very focused effort. And we do identify very specific problems and very specific solutions that we've migrated to us, at CIA, when I say "us," and we're also trying to expand this to other elements of the intelligence community. I mean, unclassified environment, you know, access to people and technologies we would never otherwise see; great ability to sort of really get into a world that otherwise would not be open to us. And the technology is applicable to all kinds of problems.

So we feel that it's been very successful as a model. But certainly, sir, some centralized testbed may be, you know, helpful to all.

MR. WATSON: Senator, I think that would be very helpful in the fact that there are departments and agencies within the federal government that cannot communicate electronically, have different systems. And certainly in the information-sharing world, which we're moving into, it would certainly be very beneficial.

SEN. WYDEN: We will have draft legislation to show you with respect to this process of testing for technology. I do think In-Q- Tel is on to some very important initiatives. One of the things that triggered my interest in this is that they've said that they have really been at a loss as to try to figure out how to evaluate all these products.

We'll show you the legislation in draft form shortly.

Thank you, Mr. Chairman.

ADM. WILSON: Senator, I do want to mention, in Defense we have the C4ISR battle lab in Suffolk, where we try to integrate the best ideas , and in the Joint Task Force commander and, you know, war- fighting setting; the Joint Interoperability Test Center, which does the same, technically make sure things interoperate.

So certainly it's been a long-term challenge for us, and we have some steps that are important going in the direction you're talking about. It may not be national, but they may be built on.

SEN. WYDEN: Well, you all have worked very closely with us. Dr. Weinegar (sp) testified yesterday. My concern is you've got 20 agencies now that are working in areas, for example, like bioterrorism. I've been concerned that you if you have a bioterror attack in a given community, it's not possible today to get in one place a list of experts who can assist with this. And what you have, essentially, are all of these agencies proceeding with their own kinds of rules. We'd like to bring this together in one place.

The administration's been very cooperative in terms of working with us. We'll show you the draft legislation shortly.

And I thank you, Mr. Chairman.

SEN. GRAHAM: Thank you, Senator. Senator Rockefeller.

SEN. JOHN ROCKEFELLER (D-WV): Thank you, Mr. Chairman.

Question for Mr. Watson. You know, when we talk about the sort of al Qaeda and we talk about the White Aryan Nation, talk about different forms of groups that are terrorists or capable of doing terrorism, we tend to sort of divide them into categories. And actually I've never heard anybody address whether or not there is any interaction, either within our country or internationally, amongst those groups. Now granted, the White Aryan Nation probably doesn't have a very large role in Saudi Arabia, let's say. But the whole concept of terrorist groups, potentially terrorist groups, groups that are -- I mean, we have groups in our own country that are organized in 34 states, and you know the one I'm talking about. And my question is, is there any interaction amongst these types of groups on the national level and, to whatever extent Director Tenet can tell us, in terms of international.

MR. WATSON: Specific communications, we do see some interaction and communications between groups. But with the explosion of the Internet, we certainly see white supremacist groups in contact with people in Europe, particularly in German, et cetera. We see on the terrorism, on the international terrorism front, we see people here and overseas communicating mainly via the Internet and talking back and forth and communicating that way. Again, we get -- we the FBI, a lot of people come in and say, "You've got an individual down in West Virginia --" (laughs) "-- or Houston, Texas, that's complaining against the regime of government." And these are friends of ours. And we have to look at that and take a look at it, and that's something that's protected under the Constitution.

But there are groups that do communicate. We see more and more of that. I don't think you were here when we were talking about the cyber-threat, but that is a real area -- a growth area, and we'll see more of that.

SEN. ROCKEFELLER: So there's not in effect direct communication vis a vis higher-ups or middle-level types getting together and talking, but they use third-party, i.e. the cyber world in order to do their communicating. But is it communicating of a planning nature, or is it just keeping in touch?

MR. WATSON: I'm sure we'll talk about this in the closed sessions. There are a lot of indicators and key things we look at as well as the intelligence community about codes, et cetera. I mean, what are they talking about, what does this mean.

And the agency has done a great job -- the CIA, you know, has done a great job of trying to figure out what they're talking about, if they're talking about key words. They do communicate electronically. And I don't want to mislead you in any way to say they do not. But they do.

SEN. ROCKEFELLER: Director Tenet, the -- there's always the talk -- I made a trip recently, and -- to the Middle East, and I kept bringing up the subject of Iraq. And I did that provocatively in order to get -- elicit response. And -- always the question of the power of the coalition, of the disintegration of the coalition was brought up in stronger or weaker terms. But is that not something that we can assume, that the United -- for me, I'm looking at 20, 25, 30 years of this. And isn't it probable that as we look at coalitions, we cannot assume that they're going to sort of stay stable, that they're going to ebb and flow, that some countries will wander off, that Saudi Arabia may, you know, come close to not being particularly friendly to us, not -- maybe perhaps not breaking relations or anything of that sort. But then in two or three years, a series of events could happen, perhaps within that country or whatever, which would bring the coalition back into another form. So it's an ebb and flow type situation, and we shouldn't -- we shouldn't try to measure the power of our effort always according to the aggregate sum of whatever value attach -- you attach to a coalition?

MR. TENET: No, I agree with that. I think the other thing, particularly in that part of the world, is, as you probably -- you got a private message and a public message. And there's always -- you always see two forms. But I think in isolation, without knowledge about what you're thinking, I mean, everybody is very careful. But I think that --

You're correct. I mean, when you lead, everybody follows. Nothing ensures coalition success like success. And so the replication of -- particularly in the war on terrorism. If you take any -- Iraq may be a separate -- it's a separable issue, but there's nothing that succeeds in coalescing people when they see progress being made and real results and real will to pursue whatever policy objective you set out. It's when you get into the stage of languish and other things start to undermine what the original focus was that things start to drift away from you. So that focus and leadership brings people to you. And you should always start from the perspective of -- and this is a policy issue; I shouldn't be talking about it -- what my leadership means in bringing everybody to me rather than worrying about it from the other side.

SEN. ROCKEFELLER: So another way of putting that is where unilateralism is used, sometimes. And I'm not asking for comments at this point, but the point is that if a country is showing absolute resolve, that that has an effect on what it is that countries who may be somewhat more on the fence or are somewhat worried will, in fact, choose to do with respect to how they coalesce.

MR. TENET: Absolutely. And it also has an impact on others whose behavior you're seeking to modify. (Off mike) -- success, they have to be mindful of it. They have to look at the power of your operations and your policy, and they have to -- you know. So that kind of success also has an impact on behavior you want to change someplace else. So it should not be underestimated.


SEN. RICHARD C. SHELBY (R-AL): The U.S., as we all know, has accomplished something extraordinary with its military operation in Afghanistan, clearly in ways and with capabilities that no other country can match, at least today. How will our successes to date affect other countries' assessments of our role in the world and their relationship to us? And Director Tenet, especially how will such assessments perhaps affect our military intelligence relationship with other nations?

MR. TENET: I think that all of these relationships be affected very positively and powerfully by what we've done.

SEN. SHELBY: Out of respect?

MR. TENET: Yes, but in -- but they also have seen the power of information-sharing, coalition war-fighting, intelligence-sharing. They've seen benefits. And quite frankly -- we can talk about this in closed session -- the Afghan scenario has revolutionized modern warfare. Just in terms of technology and its application and the mating of human capabilities on the ground and Special Forces and your air war, there are very --

SEN. SHELBY: The ability to project force -- (off mike) --

MR. TENET: -- there are lot of interesting lessons here that we're all obviously going to study. It never gets applied in the same way in the next place or other places, but I think it's had a powerful impact.

SEN. SHELBY: But these positive lessons learned --

MR. TENET: Oh, absolutely, sir.

ADM. WILSON: There's certainly multiple consumers out there that watches our military and intelligence community act, and they think of ways to fight the next war as well. And so we must not rest on the laurels of precision strike and all that stuff, but continue to move through and analyze and understand how our strengths can actually be used and -- as weaknesses.

The other thing is, I think there is some concern expressed by even friends about the widening gap between the U.S. military capability and their own, and that we can do the heavy lifting and then they're in the peacekeeping and the mud and slug and all of that.

SEN. SHELBY: Heavy lifting -- you mean project force and --

ADM. WILSON: You have the ability to do -- it's a widening gap in military capabilities, and so, as we continue to build coalitions, we need to work hard to capitalize on military, political, intelligence coalitions that can work well together.

SEN. SHELBY: To go to another area that the director and I have worked together on over the years -- that's leaks -- the security of our intelligence activities in the fight that we're in is clearly a great concern to the president, to the secretary of Defense, and, I know, to you, Director Tenet, and the FBI director. All of you have spoken out against leaks of classified information. How damaging have such public revelations been to the intelligence community's efforts, Director Tenet?

MR. TENET: Well, sir, I think you know what I'm going to say here.


MR. TENET: But I mean, I think that --

SEN. SHELBY: Well, we're going into a classified hearing later, and --

MR. TENET: Yeah. I just need to reinforce that when you throw this information out, if often appears innocuous to someone who's leaking information. That's not the prism to look at it in. It's the adversary's counterintelligence capability --

SEN. SHELBY: That's right.

MR. TENET: -- and his ability to put together the pieces of the puzzle that put at risk your human operations, your technical operations, your analytical products, and jeopardizes investment that we've made to protect the American people.

So it's a --

SEN. SHELBY: It's a problem, is it --

MR. TENET: It continues to be a problem, sir.

SEN. SHELBY: Mr. Watson --

MR. WATSON: I absolutely agree --

SEN. SHELBY: -- on behalf of the bureau. Go ahead.

MR. WATSON: Yes, absolutely, and it limits our ability to obtain additional information, because people are real leery about providing information if they think that's going to get found out.

SEN. SHELBY: Compromised, you say.

Admiral Wilson?

ADM. WILSON: I think it could be devastating.

SEN. SHELBY: And it has at times, hasn't it?

ADM. WILSON: (Inaudible.)

SEN. SHELBY: (Off mike) -- Ford?

MR. FORD: Couldn't agree more.

SEN. SHELBY: We have a vote on the floor. Of course, Senator Graham, the chairman, has gone to vote. So I'm going to need to vote. I'm not going to adjourn this committee, because we're going to come -- because Senator Graham's coming back, I'm going to -- we'll stand in recess till Senator Graham comes back. Is that okay?

MR. : Yes, sir.

SEN. SHELBY: Thank you.


SEN. GRAHAM: The hearing will reconvene. We are in the midst of one vote, and there'll be another vote following immediately. So we'll probably just have a few more minutes of questioning, and then we'll adjourn until 3:30 this afternoon, when we'll reconvene in closed session.

The issue that I'm interested in pursuing is, what are some of the lessons that we learned on September the 11th, and how are we applying actions against those lessons? In my first round, I asked about the question of deterrence, based on the information that apparently Osama bin Laden did not believe that we were committed to retaliating, and therefore, that he could take the actions that he did with a sense of impunity. And I'm going to be interested in closed session in pursuing further what we're doing to communicate to other terrorist organizations and nations which might harbor terrorists or provide them with advanced means of weapons of mass destruction, so that they do not make the same mistake that bin Laden did relative to what our intention would be.

A second area that has been mentioned is the fact that terrorists crossed our national borders and gained entry to the United States fairly easily. I was surprised to learn that, if a U.S. consular office with someone standing in front of them requesting a visa wanted to know what was the criminal background of that individual or if that individual had a criminal background, that, insofar as Interpol is concerned -- the international police organization -- that for about half the countries in the world, many of the countries that we would be most concerned about, there is no capability of providing that information.

What steps have we taken or would you recommend that we should take at every step in the process of a person gaining entry to the United States, such as the grant of a visa, screening at the point of entry into the United States -- would harden our boarders against entry by potential terrorists?

MR. FORD: Mr. Chairman, there is, as you know, a number of mechanisms already in place through the consular service, through the visa process, through an office in my bureau, which we call TIPOFF. And it's a community resource that provides a list of both known terrorists and also, in some cases, international organized crime figures. This status supplied by liaison services, by CIA, by FBI, DEA -- whoever -- and so that each of our consular posts has a electronic hookup with our database, that when someone on our list shows up, it doesn't always tell them what the problem is, but it says "You don't give a visa to this person unless you check with Washington first." And then we can provide them with the information.

SEN. GRAHAM: Was that system in effect prior to September the 11th?

MR. FORD: It was.

SEN. GRAHAM: All right.

MR. FORD: So that, obviously, it's not foolproof. If you have not been picked up as a bad actor by one of our law enforcement agencies, intelligence agencies or one of our ally or friend's agencies, you won't be on the list. You also can have an alias. And you have to balance that in terms of, one, both the economic and other interests that people all over the world have in traveling to the United States. The sheer numbers of people that go through the process, I find staggering. And secondly, there are a lot of countries that do not require us -- we do not require visas, they just simply have to have a passport. So that those people also are very difficult to track.

SEN. GRAHAM: But were any of the terrorists involved in the September 11th from a country where a visa was not required?

MR. FORD: I'll have to take that question. I don't think so, but I'll check.

ADM. WILSON: Senator, I'd like to follow this up in a closed session about a cooperative program that we have ongoing with the Immigration and Naturalization Service, first for counter- intelligence, but has immense applications in this world that we're pursuing rapidly.

Also I wanted to just comment -- you mentioned about lessons learned since September 11th. And if I had to cite one thing, it would be the value of being on the offense, the value of getting prisoners, the value of getting documents, the value of operating in their lairs, the value of moving -- having them move and run and talk and all this. It gives us so much more leverage and options than when you're purely on the defense. And so there's a tremendous value to that, and that's a -- I'm not sure if the lesson's learned, but the lesson's reinforced.

SEN. GRAHAM: Well, I'm going to hold the further discussion on the immigration issue for the closed session, but to go to the issue of value of being on the offensive, I was interested that in the speech that he gave last week, Secretary Rumsfeld used the term "preemptive strike," that we would be prepared not to wait until we've been attacked, but if we saw developments that were threatening, to move in a peremptory manner. What are the implications of that commitment to act peremptorily to our intelligence agencies, starting, Admiral Wilson, to the --

ADM. WILSON: First of all, I would say that, you know, most people think of about preemptive strikes in terms of the military, and certainly that is one venue for attack, but I suspect that the secretary was talking about preemptive strike with all of our national capability: intelligence cooperation, security forces, you know, financial attacks. And it's also combined with this offense, in terms of not just being working on warning and threat levels, but also targeting options, targeting packages, the kind of work you have to do in the military. We talk about preparing the battle space. So we have certainly increased dramatically our efforts in the areas of preparing for future attacks.

MR. FORD: It's very difficult to go on the offensive without having good intelligence. It's always important. But if you're going after specific groups or individuals, whether through law enforcement or whether it's through military action or diplomatic pressure, you have to have the evidence, you have to have the information to act on. And so that the pressure on all of us has grown considerably after 9- 11. We got to get better.

SEN. GRAHAM: For instance, one of the things that we've talked about that al Qaeda used were training rounds. They prepared a whole cadre of people who then they placed around the world to be ready to initiate action. And I think were not all of the 19 hijackers graduates of one of al Qaeda's training programs? That would seem to be an example of preemptive strikes. Are we gathering intelligence on the training facilities of other terrorist groups, and are we preparing ourselves with the kind of military, but also other, capabilities to peremptorily take out those training capabilities?

MR. : Absolutely.

SEN. GRAHAM: Maybe that's something you'd like to discuss in more detail in closed session.

MR. : Maybe. (Laughter.)

SEN. GRAHAM: Are there any other lessons that we have learned from the events of September the 11th that have an implication to our intelligence capabilities?

MR. WATSON: I think there are some things we probably should talk about in the closed session, some other trends that we saw as a result of the 19, Senator. Be glad to do that this afternoon with you.


There are some implications of what happened on September the 11th that I would describe as being the over-the-horizon threats. As an example, we know that Afghanistan had been the world's largest producer of heroin. We destroyed a substantial amount of (it warehoused, in our ?) attacks, and I would doubt that this is going to be a friendly growing season for heroin production in Afghanistan in the year 2002. That raises the question of will the world's supply be thus diminished, or will there be other locations that might step forward to take a part of the production that Afghanistan has traditionally provided?

A major heroin producer, relatively recent heroin producer, is Colombia. What do we know about the possibility of a significant increase in heroin production in Colombia to replace what has previously come from Afghanistan? And if our intelligence indicates that is in fact a possibility, what steps can we take to deal with it?

MR. FORD: Mr. Chairman, I'm not ready to write off so quickly that Afghanistan will no longer be a problem for our counter-narcotics efforts.

SEN. GRAHAM: Even in 202 (sic), with the kind of international presence that's going to be in there?

ADM. WILSON: I think actually -- I've seen some assessments that because there's relatively more freedom in Afghanistan than there was under the Taliban that there may be -- and people are struggling economically, that there may actually be not a change or even a surge in heroin cultivation.

MR. FORD: And there is also the storage of crops from before, and that --

SEN. GRAHAM: That's inside or outside of Afghanistan?

MR. FORD: Inside Afghanistan.

So while I think that it will continue to be a problem, my guess is that 2002 may be a little bit better than 2003, 2004. But it's still a problem. But there's always someone somewhere who seems to find a way to make up for any shortfalls, unfortunately. There's so much money involved that people are prepared to take almost any risk to continue to provide heroin. We're just going to have to keep on top of it.

MR. TENET: Senator, why don't we provide you an assessment for the record on what the Crimes and Narcotics Center -- take all these facts and put them forward to you in a piece of analysis. I think it might be helpful.

SEN. GRAHAM: All right. And I'm going to hold the rest of my questions until after we reconvene at 3:30. Senator Rockefeller, do you have any final questions?


SEN. GRAHAM: We're going to reconvene at 3:30 in a closed session.

If there are no other questions, first, I would like to say that I think one of the lessons that we've learned since September the 11th is just how good our intelligence agencies are. The infrastructure that was in place in Central Asia that allowed us to conduct the military operation didn't just happen in the afternoon of September the 11th. It represented a vision of where the United States would have the need to develop information and the maintenance of an infrastructure that put us in a position to have the information when we needed it.

The fact that the first people on the ground in Afghanistan were intelligence officers and that the first casualty in terms of loss of life was an intelligence officer are examples of the dedication and courage of the men and women who represent us through your agencies. And on behalf of the American people, there is a deep recognition and appreciation of what you have done.

And I recognize that much of the commentary, including some today, has been phrased in terms of questioning what happened or what didn't happen. But I hope that the American people understand that those questions are being asked in the sense of how, together, do we take a strong set of agencies and make them even stronger in the face of the new threats that have now become so apparent. And I want to personally express my appreciation for your individual leadership and for the people that you lead so effectively.

MR. TENET: Thank you, Senator.