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

February 22, 1996

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SPECTER: The Intelligence Committee hearing will proceed. Today, we will be hearing from the Director of Central Intelligence, Dr. John Deutch. And we also have with us Lieutenant General Pat Hughes, Director of the Defense Intelligence Agency and Toby Gati, Assistant Secretary of State for Intelligence and Research.

The hearings today are our first in 1996, which marks the 20th year that the Senate Select Committee on Intelligence will have been in existence. And with the end of the Cold War there has been considerable speculation and discussion about the need for intelligence with the end of the Cold War and the demise of the Soviet Union.

And as I look over the subject matters which are on the agenda today, they are numerous and critical: the question of India and Pakistan and their nuclear programs; issues about the potential confrontation between China and Taiwan; the question about Iran's nuclear weapon capability; the recent return of Saddam Hussein's sons- in-law to Iraq; the question of the proliferation of nuclear weapons by the Chinese and what are the appropriate sanctions to be imposed by the United States;

The monitoring of the North Korean framework agreement; the expanding Intelligence Committee role in counter-narcotics; critical issues facing the United States and our relationship with Mexico on the impact of the drug trade;

Current developments in Colombia with the President of Colombia being under serious questioning, to put it mildly; the mounting problems of economic espionage; the generalized problems of the ballistic missile threat to the United States; intelligence support for the War Crimes Tribunal -- a very important subject;

And other issues of importance, such as the allegation recently, or disclosure of a Department of Defense memorandum about ethnic spying in the United States; and the questions recently of national concern about the use of the intelligence community of news men who are clergy.

All of those issues are matters of enormous concern, so that in my mind, there is no doubt about the need for a very active intelligence community for the United States. We confront, at the same time, very serious issues about the operation of the United States intelligence community -- whether the Director of Central Intelligence has sufficient authority.

SPECTER: We're about to have a report by a commission headed by former Secretary of Defense Brown. This committee has been working on possible structural changes in the defense community. Problems are continuing on our agenda arising out of the Aldridge Ames situation, the dissemination of materials from tainted sources, the questions recurrent in Guatemala and other locales about the propriety of activities by our intelligence-gathering agencies, all in a context where intelligence gathering is vital.

We don't want to tie the hands of our intelligence gatherers, but the overall comportment has to be within the context of the ethics and morality of the democracy of the United States of America.

I have a more extensive statement which will be placed, without objection, in the record, and at this time I yield to the distinguished vice chairman, Senator Kerrey.



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


KERREY: Thank you, Chairman Specter. I will do the same -- include a statement in the record, and pass along to Mr. Deutch my condolences for the loss of your father whose life really AUDIO GAP not only was an exemplary one, but speaks a great deal about the changes that we face in this century and the challenges that we face in the century and the success that we've had in this century meeting those challenges.

I'm impressed by all three testimonies. I must say, in particular, I'm impressed and look forward to having the opportunity to follow on some questions of the new Director of the Defense Intelligence Agency, new three-star general, Pat Hughes. The purpose of having you all come before us is to both in written and oral form describe to us, in your view, based upon your experience, what you see the threats to be, what you see the challenges to be, and how you think we need to organize the efforts in order to protect the safety and health of the people of the United States of America.

I appreciate your making that effort and look forward to your testimony.

SPECTER: Thank you very much, Senator Kerrey. Senator Robb, would you care to make an opening statement?

ROBB: Thank you, Mr. Chairman. I will only say that I too share in (OFF-MIKE) condolence in the Director. I had a similar loss not too long ago and I understand. We thank you for coming today.

Obviously, the threats that you are going to be addressing worldwide are of enormous interest. Not all of them can be addressed in the detail that we might like to pursue here in open session, but I think this is a valuable opportunity for us to hear some of the concerns and some of the matters addressed, at least in a preliminary fashion that might be useful for everyone concerned, and I thank you for appearing, particularly under the circumstances. Thank you, Mr. Chairman.

SPECTER: I join my colleagues in expressing our appreciation for your appearance here today. We know your work schedule and we had made available whatever time you saw fit. But we do appreciate your coming in as planned because there's a great deal that we have to look forward to in the days ahead. So the floor is yours, Dr. Deutch. Your full statement will be made a part of the record and you may proceed as you see fit.



Director, Central Intelligence Agency


DEUTCH: Well, thank you very much, Mr. Chairman, and thank you, Senator Kerrey and Senator Robb, for your expressions of sympathy. I want you to know, all of you, the tremendous personal gratitude that I have for the sympathy that has been expressed to me by the Chairman.

DEUTCH: By the members of this committee in the matter of the passing away of my father, who was a great and wonderful man.

I'm here today to outline the threats to the United States and its interests now and into the next century. The post-Cold War presents great challenges, greater challenges than we might have expected during the Cold War. There are serious threats to our interests and great uncertainty beyond our borders. In many regions of the world, stability is threatened. There is ethnic turmoil and humanitarian crisis, for example, in Bosnia and Rwanda. Two great powers, Russia and China, are in the process of change, and we must watch their evolutions closely.

Free nations of the world are threatened by rogue states -- Iran, Iraq, North Korea and Libya -- that have built up significant military forces and seek to acquire weapons of mass destruction: nuclear, chemical and biological. There is a growing threat to our nation from international terrorism, from drug trafficking and crime.

Mr. Chairman, I would like to divide my presentation into two parts. First, a very brief description of near-term concerns we face throughout the world. Then I would like to briefly mention some longer term concerns and explain what we in the intelligence community are doing about them. In the interest of time, I will not cover every issue and I would like to submit my written testimony for the record for a more complete discussion.

SPECTER: Your written testimony will be made a part of the record, without objection, and dividing your testimony as you see fit is fine, Director Deutch.

DEUTCH: Thank you, Mr. Chairman. Let me begin with near-term concerns: the Indian sub-continent. The relationship between India and Pakistan continues to be unsatisfactory and the potential for conflict is high. Since each of these nations possess nuclear capability, every effort must be made to support our U.S. policy makers, who are seeking to avoid military confrontation. We are concerned that India is considering the possibility of a nuclear test and we have judged that if India should test, Pakistan would follow. We are especially concerned about Pakistani efforts, some in cooperation with China to acquire additional nuclear technology.

China. China continues to emerge as a major economic, political and military power in East Asia. We believe China is preoccupied with its leadership transition after Deng Xiaopeng, who at the age of 91 is no longer involved in daily decision making.

Maintaining political control, while at the same time continuing to liberalize the Chinese economic system, is the primary concern of the current leadership.

There are important issues that divide China and us and deserve close watching. Let me mention a few. Relationships between China and Taiwan. The present deployment of Chinese forces across the straits from Taiwan indicate the seriousness of this issue. The potential for hostilities due to miscalculation and accident is great. China's military modernization is also troublesome. It includes acquisition of modern weapons from Russia, for example, Su-27 fighter aircraft with large combat radius.

China is proceeding with economic reform without moving towards democratization or increasing respect for individual rights. Human rights in China remains an important issue for us.

DEUTCH: China continues to provide inappropriate weapons and military technology assistance to other countries:

Nuclear technology to Pakistan, for example, which is not a Non- Proliferation Treaty signatory, cruise missiles to Iran, and as we all know, there are also a number of outstanding trade issues with China.

These unresolved issues lead the intelligence community to be very concerned about the course of U.S.-China relationships through the end of the century. And we are placing a special priority on supporting our foreign policy leaders in this country, our foreign policy makers, in dealing with U.S.-China relations.

North Korea. North Korea is perhaps the most isolated and xenophobic society in the world. We need to learn more about the forces that influence where this country is going. The North Koreans continue to maintain a massive military force that has the ability to launch an aggressive assault on the South.

Political and economic circumstances continue to deteriorate in North Korea, and a collapse of the current regime is quite possible, although we cannot be sure whether this would happen in a peaceful or a violent manner. As a result of the October 1994 nuclear framework agreement, the North Korean nuclear program appears to be frozen, but it is not yet dismantled.

Russia. The June presidential election marks a critical juncture of Russia's post-Soviet evolution. The Russian people welcomed democracy and the move to a market economy in 1991, and Russia has made progress towards these goals over the last few years.

But market reforms have brought economic hardship, and the growth in criminal activity has led many Russians to question the benefits of reform. Accordingly, the June presidential election is an important junction for Russia. We believe that even if a hard-line government takes power, Russia will not likely be transformed back into the Soviet Union, which collapsed because of the failure of their economic system.

Democracy and a market economy have created new interests in Russia which will not easily surrender their gains, and in addition, much power has been dissolved from Moscow to Russia's outer regions. But we believe that whoever becomes president in the next Russian election, Russia will in the (AUDIO GAP) term slow the pace of reform and be less willing to cooperate with the U.S. and the West.

The Middle East. It's the second region after the Indian subcontinent that is most unstable and presents the greatest threats to world security. In Iraq, Saddam Hussein continues to pose a threat to Kuwait and the Arabian peninsula. He shows no inclination to improve the conditions of the Iraqi people or to stop seeking to acquire weapons of mass destruction.

Iran. Iran is a major sponsor of terrorism throughout the world in Bosnia, the Sudan, Lebanon and Saudi Arabia.

We are alert to Iranian efforts to acquire modern weapons and technology that they need to advance their weapons of mass destruction programs. We view with the greatest concern the assistance that Russia is providing Iran to build the Bushehr nuclear power generating station. This project could be used by Iran to acquire nuclear technology that could be diverted to a nuclear weapons program.

The one bright spot in the Middle East is the progress that is being made in the peace process between Israel and its neighbors. The intelligence community is proud of the role it has played today and in the past in supporting the Secretary of State throughout the peace process.

. . .

ROBB: One last little matter -- it's not a little matter but one specific item -- that with respect to the presence and strength of the Iranian Republican Guard in Bosnia, there have been newspaper reports on that topic.

What can you tell us in open forum about that situation and how it is progressing given the fact that under the terms of the Dayton agreement, they were all supposed to be out in mid-January.

DEUTCH: Senator, that's exactly right. Under the terms of the Dayton accord, the Bosnian government had the responsibility for getting rid of the Iranian Republican Guards which are there in Bosnia. We continue -- I continue to be absolutely concerned about this matter. Not a day goes by that I don't discuss the progress that is being made with at least the Secretary of Defense and the Secretary of State, so I consider this still a very, very important matter with respect to the safety of our troops and the IFOR troops in Bosnia.

ROBB: How confident are you of our ability to monitor that situation accurately?

DEUTCH: I'd rather take a pass on that, Sir.

ROBB: I understand and I think that I won't pursue any other questions at this time. Mr. Chairman, thank you.

SPECTER: Thank you very much, Senator Robb.

Director Deutch, turning to the War Crimes Tribunal in the Netherlands, at the outset on the subject, I thank you for your cooperation. Senator Shelby, who is the presumptive chairman next year if we have a Republican majority, and I had occasion to travel together recently and the final stop on our trip was in the Netherlands at The Hague to talk to the prosecutors on the War Crimes Tribunal.

And there is the potential, I think, for an enormous achievement in establishing a War Crimes Tribunal as a prelude to having an international criminal court which institutionally could be the event of the century if we're able to carry it through.

And a good bit of the success is going to depend upon the ability of the U.S. intelligence community to provide key evidence which may be usable against some very key people.

I wrote to you on January 18th after we had had a chance to talk on January 5th, which was just the day after the day I got back having had a meeting just the day before on January 4th, and it is a very touchy situation internationally because to carry out the Dayton accords, there has to be cooperation from Serbia and there has to be cooperation from the Bosnian Serbs.

SPECTER: There's a very unusual situation where the President of the Bosnian Serbs, Radovan Karadzic, is under indictment, as is the military leader of the Bosnian Serbs, Ratko Mladic.

And the current arrangement is a curious one, where the Dayton agreement provides that the NATO forces will not seek out these individuals under indictment, but if the NATO forces come upon them, they'll be taken into custody and turned over to the War Crimes Tribunal.

Recently, there was an international incident where two men were turned over to the War Crimes Tribunal not under indictment, with the conclusion being that if the War Crimes Tribunal had them indictment, they could be turned over. And that, of course, has an enormous potential impact upon the cooperation of the Bosnian Serbs, and Serbia generally.

My question to you before getting into the intelligence aspect is a broader one; and that is, what is our overall capability to gather the intelligence in support of indictments already issued against these two top Bosnian Serbian leaders?

So there is already sufficient evidence for an indictment, but the prosecution team there wants to have what they call a Rule 61 hearing for the International Criminal Court, and that takes more evidence. Could you comment on that issue?

DEUTCH: Well, first, Mr. Chairman, as I've mentioned to you, and is certainly the policy of our government, that is, the assistance that we can provide to the War Crimes Tribunal from intelligence is going to be given. That is something that I've stressed and I think is very important for the same reasons that you do.

I do not believe that it is likely that we would find -- we have looked -- or could collect material which would be compelling in a legal proceeding that would have the kind information that we would normally be able to get. Where we come across it...

SPECTER: But it could be...

DEUTCH: ... we provide it.

SPECTER: It would be corroborative evidence, when you talk about the gravesites, far-removed from the battle lines, so that there's no question about those deaths having been inflicted in combat.

DEUTCH: We are perfectly in a position to provide that information. And as far as I know, and I spoke to Justice Goldstone just a couple of weeks ago, I think that this is not only being provided in a way that they find useful for their investigatory efforts but also we have a process in place which would allow them to use that information in a legal proceeding in a way that is appropriate for them.

So I think that this is on track and we are -- if we've had information about Karadzic or Mladic or we had corroborative information and they requested it or we thought it would be useful, we would hand it over to them.

SPECTER: Well, I thank you for your statements and I think it is very important that the international community, including the parties to the Dayton agreement, understand the determination of the United States in pursuing these prosecutions with the War Crimes Tribunal so that justice will be done against these atrocities and the acts of genocide.

SPECTER: I had an occasion -- President Clinton called me before the vote on the resolutions on Bosnia to talk about Senate support, and I had occasion to talk to him about the War Crimes Tribunal. And he is four-square behind them from what he said to me privately and what he has also said publicly.

And I believe that the likelihood for congressional support for what is going on today will be enhanced by vigorous prosecution of these cases.

It is my hope that some members of the Intelligence Committee will have an opportunity to visit Bosnia. There is an effort to limit the number of trips there so as not to interfere with the military operations, but this committee has already been active in supporting the prosecutions and we intend to pursue it, and we appreciate your cooperation.

Let me move quickly to a number of other subjects because there is so much to talk about and so limited -- a limited amount of time. I want to pick up the question of China: our intelligence-gathering facilities, the issue as to what is happening with China and Taiwan. Last summer, the People's Republic of China test-fired short-range ballistic missiles near Taiwan. And last fall, it conducted military exercises which had every indication of being directed to intimidate Taiwan right before their parliamentary elections.

We have the issue of China's having agreed to provide by the provisions of the missile technology control regime. Yet last year, Secretary of State Christopher commented publicly about a large body of evidence that China had sold M-11 missiles to Pakistan. And now there are reports of China selling missiles to Iran and transferring nuclear weapon technology to Pakistan.

Picking up on the Taiwan question first, I believe it is very important that the People's Republic of China not misunderstand U. S. resolve that Taiwan not be militarily attacked or intimidated. What is your assessment, to the extent you can disclose it publicly, about the intentions of the People's Republic of China with respect to their belligerent activities toward Taiwan?

DEUTCH: Mr. Chairman, there has been a military buildup in the area. We follow it and monitor it extremely closely. I am not only concerned about Chinese intentions against Taiwan or some of the smaller Taiwanese-held islands in the area. But I am also very concerned that in their process of carrying out exercises in the area before the Taiwanese election, that by accident or miscalculation, an event occurs that could bring hostilities.

So I would say to you that this is a matter which the community is following on an inter-agency basis extremely closely, on a minute- by-minute basis.

SPECTER: Well, because of the sensitivity of that subject, I will not pursue it further. But I think it is important to have that public statement about U. S. concern and about U. S. following it very, very, very closely.

SPECTER: Then you have the proliferation issue. What is happening there, again, Director Deutch, to the extent that you can publicly say? Because if the reports are accurate, it seems to me that we ought to be taking very stiff sanctions against China. It's a tough issue, given their psychology and the nuances of international relations. But if we don't show them we mean business about the laws on sanctions which the Congress has enacted, then it's open season on the proliferation of nuclear technology. What do you think?

DEUTCH: Mr. Chairman, the intelligence community continues to get accurate and timely information on Chinese activities that involve inappropriate weapons and military technology assistance to other countries:

Nuclear technology to Pakistan, M-11 missiles to Pakistan, cruise missiles to Iran. Our job is to obtain this information and provide it to our policy makers in this country to make a determination on what policy actions should be taken. I would say that the community is doing its duty here and doing it well and clearly.

SPECTER: Director Deutch, I turn now to some reports we've had about espionage by foreign governments which are inspired by ethnic considerations and by relying on ethnic groups in the United States.

By letter dated January 31st of this year, Senator Kerrey and I wrote to Defense Secretary Perry, calling his attention to a DOD memorandum which states, quote, "The strong ethnic ties to Israel present in the United States coupled with aggressive and extremely competent intelligence personnel has resulted in a very productive collection effort". And the memo goes on to say, quote, "Many of our military friends are our economic industrial threats. Some of these countries we deal with on a day-to-day basis," and then parenthesis referencing France, Italy, Israel, Japan, Germany, United Kingdom, et cetera.

There are six incidents cited in the memorandum relating to Israel, which strongly suggests that it is more than a casual memorandum, although the Department of Defense issued a general disclaimer saying that it was the view of somebody fairly far down the line. None -- no incidents specified as to France, Italy, Japan, Germany, the United Kingdom or any other country.

My question to you is -- well, I'd like your comments about the situation generally. We are still awaiting an answer from the Secretary of Defense. I would have thought that on a matter of this urgency, we would have one within three weeks, but since we don't, I would like your comments on it.

DEUTCH: Well, first I want to say, Senator, that this memorandum did not come from any part of the intelligence community.

DEUTCH: It came from another organization in the Department of Defense, I believe Industrial Security, if I have the correct reference in mind.

SPECTER: Were you the Deputy Secretary of Defense at the time the memorandum was issued?

I ask that only because of your disclaimer.

DEUTCH: No -- probably.



SPECTER: Well, let's not focus too heavily on lines of command.

DEUTCH: But it is a terrible document, simply put. It is a terrible document, because it makes assumptions about how individual Americans might act, which I think is inappropriate, and I think that the response that you will get from the Department of Defense will be of the same nature. It is also true that we do have a counterintelligence responsibility to monitor what other countries actually do in this country to try and inappropriately penetrate our national security facilities or our national security operations. And we do take that very seriously.

But the kind of counterintelligence assessment that we would give you is of a quite different nature than is contained in this memorandum.

SPECTER: Senator Kerrey and Senator Robb are anxious to question others. I wonder if I might ask just two more questions and let the director go. Or would you want to proceed now by...

KERREY: Well, I tell you what, Mr. Chairman. I mean, one of the things that I appreciate, Director Deutch, your wanting to lead off and take responsibility, as you always do. But what I find, particularly in reading General Hughes' testimony, is there's some very provocative suggestions that I think are important.

Now, maybe General Hughes is wrong -- it'd be the first time that he's wrong. But he's done exactly what I was hoping would occur on repeated opportunities to get an assessment of threats, which is to sort of say, OK, this is the way we've done it in the past, but the world's changing on us, and if we're trying to not just figure out what are the threats today and discuss current events, but what are the threats going to be 10 to 20 years from now, which is what we're going to be facing with the kinds of investments we're making today.

We're basically building tomorrow's technology today and developing tomorrow's people today. That's been said enough times that it doesn't need to be repeated. But it's tomorrow's threats that are as big an issue as today, it seems to me, as we try to decide what our budget's going to be and how we're going to appropriate money and all those kinds of things that we're going to be doing, follow-on this year.

And I see in this testimony, for example, some things that I'd like to ask you about as to whether or not you see the world the same way, as opposed to merely following on and hitting General Hughes with the questions.

For example, repeatedly throughout here in the testimony there are -- and I presume you've read it; am I on safe ground here? And I'm not trying to get a battle going. I'm really trying to inform myself. I'm trying to get a sufficient discussion going here that I can make good judgments. As I read this, for example, one of the things that I hear myself saying is that I should direct an increasing amount of my attention to economic issues and to the whole question of what our foreign aid looks like as opposed to merely trying to figure out what kind of satellites to build and what kind of authorization to give you throughout all the intelligence agencies.

I mean, I hear myself saying -- for example, on page 17 of the testimony, I think a rather remarkable beginning under terrorism, "Defining terrorism in the future is going to prove increasingly difficult."

KERREY: That's how it starts off on page 17. In follow-on on page 18, it says: "As a result of increased economic disparity, we can expect to see increasing alienation and a growth in related terrorist acts."

Well, that seems to be positing a cause here. Now, I don't want to get into a, you know, into a discussion as to whether or not that's the only cause. But do you, Director Deutch, see in the future -- as you look into the future, do you see this kind of diffusion of power that General Hughes is suggesting, this kind of possibility that chaotic events that we currently don't even have on a radar screen could emerge on a radar screen in the future and produce problems for war fighters that may have to go in after the fact?

That's what I was suggesting earlier with Bosnia. I mean, nobody in 1990 had Bosnia on the screen, or at least very few people. I doubt that it was a part of the threat assessment at the time. And yet we've got 20,000 troops over there today.

So, do you -- go ahead.

DEUTCH: First of all, we are enormously fortunate to have General Pat Hughes as the new director of Defense Intelligence Agencies.

I have the highest regard for him and I, with you, have found him rarely, if ever, wrong on any subject. So we should listen to him with the greatest of attention. He not only has practical background, he does have this ability to cast things in important ways. That's the first thing I want to say.

The second thing, and right on the point that you are mentioning, I've been absolutely, I think, consistent with Pat Hughes on the kinds of threats that we're going to have in the future, of which the terrorism that you mentioned is one. And certainly something that I have been very vocal about is that terrorism is a growing threat to the international community, not just to the United States.

I don't believe that the source of that terrorism comes only from economic forces. It comes from other forces as well, ideological and extremist ideological trends. But I also believe that when our military forces are used, as we've seen in Haiti, as we saw originally in Somalia, and as we're seeing in Bosnia, they are coming in a situation, as I have said here and publicly elsewhere, not just military force alone, but coming together with a need to provide economic and humanitarian assistance and diplomatic efforts as well.

I think that we are giving a consistent message here from all parts of the administration, whether it's the intelligence community or the military or the Department of State, on these issues.

KERREY: Let me follow on two additional questions. I apologize to General Hughes for asking you about his testimony, but it is very provocative testimony, which is -- I mean, I was hoping to get this kind of testimony offered today.

General Hughes says on page 7 that, "There are those who speak of China as a future peer competitor of the United States, and argue this would be possible only in the very distant future, certainly beyond 2010.

"At best, China is going to enter the new millennium with relatively small, but key portions of its force equipped with late- generation equipment. Much of the force will still be very old. It remains to be seen how successful this military will be in the assimilation of newer technology."

Well, that suggests a sizing of China's problems as largely a political problem -- perhaps through miscalculation in regards to Taiwan, perhaps provoked by us.

KERREY: That is why I suggested earlier that if members of Congress don't understand what our policy toward China is -- what's in the Shanghai agreement, specifically, it's possible for us to take action that could provoke China, that could create the very thing that we're describing that we want to try to avoid.

So if this sizing of the threat is accurate, then it seems to me that we need to be talking about China in different terms.

And sometimes it's done. I mean, I've heard China described as a threat to the United States. Do you think that China is a threat to the United States?

DEUTCH: A military threat to the United States?

KERREY: A military threat to the United States.

DEUTCH: It certainly has missile systems which can be a threat to the United States. But in terms of conventional military power, no, it is not.

KERREY: Well, so you think that its military capability is not a threat to the United States; its missile capability could potentially be a threat to the United States. But in general terms, do you think it's much more of a political threat to the United States?

DEUTCH: Yes, that's what I think I testified to in providing you a range of situations, other than with Taiwan. It's not a threat to the United States. It's a threat to world stability, though.

Running through what are the concerns that we see about China, they range from providing assistance to other countries and gaining weapons of mass destruction.

KERREY: On another piece in here, General Hughes says that the prospects for the existence of a viable unitary Bosnia beyond the life of IFOR are dim, and then goes on to list a number of problems in here.

He does not suggest by that that IFOR won't still be a success. He does not suggest beyond that and by this statement that IFOR is a waste of U. S. effort. It most unquestionably, in my mind, will not be a waste of effort simply because of the statement that the prospects for Bosnia beyond the life of IFOR, as he states in here, are dim.

Is that your own view, that we should -- that the American people should not expect, given the current situation on the ground, that Bosnia as a unitary viable nation will survive?

DEUTCH: I don't know enough, Senator, to reach that conclusion today. I would not express it that way, no sir.

I think it depends on what happens between now and when IFOR goes a year from now.

KERREY: Certainly it's a goal of the President and the United States to have Bosnia survive as a...

DEUTCH: That is correct, and we would hope that our political and economic efforts would make that -- as well as the good will, if you can call it that, of the people of former Yugoslavia -- that we would influence that. Yes, sir.

KERREY: And do you believe that the list of things that have been identified in General Hughes' testimony comports with the sorts of things that we ought to be concerned about if our -- if we as a Congress want to support the administration's effort and NATO's efforts to achieve a viable unitary nation state in Bosnia? The efforts of the Muslim-led government to assert authority over the whole of Bosnia will be aggressively resisted, which we are obviously seeing in the suburbs now, with the evacuation of -- the Bosnian Serbs' decision to evacuate and to urge the Bosnian Serbs to leave the suburbs of -- I mean, are these the sorts of things that you think that we should be...

DEUTCH: Absolutely, sir. We are seamless in this, in our views on what is of concern in Bosnia.

KERREY: On page 16 of the testimony, again there's what I consider to be a very provocative statement and I personally think an accurate statement, but one that I'm tempted to follow along as well. I mean, it's easy to have somebody get up and describe a threat, and the next thing you know, the audiences say: Well, gosh, that sounds pretty good. They've got their facts right. They sound pretty good. They seem to be getting it right, maybe we ought to spend four, five or whatever billion dollars in order to defend against that threat.

I mean, that's part of the problem in the post-Cold War era is that threats aren't as clear as they used to be. But the testimony, you said, I would recommend the committee be leery of anyone who appears to be emphasizing a particular Russian system or appears confident that that system will be fielded in military significant numbers.

Again, General Hughes does not say that Russia is not a threat, but simply describing in this particular context their capability, their economic capability of being able to develop any particular weapons system. In the testimony, he said that Russia will stay at START I. The DIA's assessment is -- public assessment is they're not even sure economically if Russia can build what is necessary to meet the requirements of START II -- even if START II's not ratified by the Duma.

So even if START II's not ratified by the Duma, the question is whether or not Russia's got the capacity to build and maintain the levels that would be required under START II. And thus, in that context, one of the conclusions is that the committee should be leery of those who would take a particular weapons system that could be a threat to the United States, if that's all they were building, if that's the only thing that they were working on.

But in the context of their general economic condition and their general inability to train, and so forth, that we should be leery of someone who would take a particular weapons system and build that up as a threat to the United States. Would you agree with that?


KERREY: One statement that was made in regards to North Korea earlier, on page 5, that I would also like to ask you about -- that I've got some questions about. And that is the military posture in North Korea remains very dangerous. I've got some questions as to whether or not the military of North Korea is very dangerous. What -- do you agree with that statement and if so, why?

DEUTCH: There's no question that I agree with that statement, but I want to make a very important point here about the North Korean military posture, which I believe my friend, Pat Hughes, would fully subscribe to.

We traditionally think of the military threat from North Korea as being an all-out invasion of the South. But that's not the only military incursion that could take place. And because of the growing instability and uncertainty in that country, one could find the North Koreans taking actions that were short of a major invasion of the South which would present us with a tremendous problem, but be short of an all-out invasion of the South. We have to be prepared to deal with those kinds of situations as well.

And they can do so very quickly. That is, we would not have a lot of warning before such an event took place.

KERREY: Dr. Deutch, I would indulge the chairman and give a 60- second editorial, which you've heard before. My first round of questioning that I was engaged in with you suggests something you and I have discussed before, which is that, you know, I believe that democracy functions the best when the citizens are informed, as a fundamental principle.

And secondly, I tend to be pretty aggressive when it comes to informing the citizens.

And thirdly, I'm deeply concerned about our capacity to make foreign policy decisions, not only if we do not use the technologies that we have that enable us to inform the citizens but if we don't come to the citizen aggressively and say, Don't count on your military defending you. The military is strong. We're going to keep it strong. We're going to keep it well-trained. We're going to fund it, we're going to build and supply it with the best technology that we possibly can.

KERREY: But the first line of defense is an informed citizen. And I'm really -- as I look at the array of things, particularly the transitional difficulties that we face today, it falls upon the people of this country to make the effort rather than merely trusting that somehow members of Congress or our military are going to get the job done for them.

DEUTCH: I understand, sir.

SPECTER: Thank you, Senator Kerrey. Senator Robb.

ROBB: Thank you, Mr. Chairman. So as not to make the testimony of General Hughes and Secretary Gati anti-climatic, I will not interrogate you about their testimony at this time. I have constraints, and I look forward to hearing it.

One question, a follow-up to the question that was posed by the Chairman relating to M-11 and Pakistan and China. There has been a great deal of public comment on this question. You indicated that you had provided very detailed, precise information, or whatever, or you were capable in monitoring. Whatever the case may be, you didn't respond to the ultimate question.

I'm not even going to ask you the ultimate question, but may I ask you, have you provided specific information to the executive branch on that question?


ROBB: Is there any ambiguity in the information that you have provided to the executive branch?

DEUTCH: There is always some ambiguity, sir. There is always some ambiguity, but not terribly much in this case, I would judge.

ROBB: I think that's where I'll leave that one.

And Mr. Chairman, I thank you and I look forward to the testimony. I thank Dr. Deutch for his testimony. And I know that he visited with each member of the committee and gave us an opportunity to explore a number of other matters in greater detail. And for that, I want to add my thanks as well.

DEUTCH: Thank you, Senator Robb.

SPECTER: Director Deutch, you testified in response to questions from Senator Kerrey that you are reasonably confident that the U.S. intelligence community could detect nuclear weapons in foreign hands?

DEUTCH: The development programs for nuclear weapons, sir. I thought I was...

SPECTER: The development of programs?

DEUTCH: The development nuclear weapons programs by other countries is the question I thought I was addressing, sir.

SPECTER: And that you could also be reasonably confident that you could detect ballistic missile development?

DEUTCH: Programs. Yes sir.

SPECTER: Well, does that leave anything out, then?

Do you have a reasonable level of confidence that at least that area of weapons of mass destruction you are able to detect?

DEUTCH: Yes. It leaves out chemical and biological weapon programs, development programs.

SPECTER: What is our level of ability to monitor and detect biological weapons, chemical weapons?

DEUTCH: It's a lot more uncertain, sir, because of the fact that much of the technology used in those programs is dual-use. So the equipment and the technology can be procured for another purpose and then diverted, and it's hard to track and it doesn't require large facilities. It doesn't require special nuclear materials. It doesn't require tremendous electricity or other signatures. So it's much more a matter where we have to have the ingenuity of our intelligence, mostly human intelligence services discover it.

SPECTER: Director Deutch, you identified the Indian Sub- continent as being the most volatile hot-spot in the world?

DEUTCH: Yes, sir.

SPECTER: Sometime ago, Senator Brown and I had occasion to visit in both India and Pakistan. We talked to Indian Prime Minister Rao, who expressed his hope that the subcontinent could become nuclear free. We later had a chance to talk to Pakistan's Prime Minister, Benazir Bhutto, who was surprised to hear that. She even asked if we had it in writing. I was surprised to hear that the Prime Ministers of India and Pakistan do not communicate with each other.

What would your sense be about -- and this may be a little bit out of strictly the intelligence gathering line; but perhaps your intelligence gathering does bear on it -- for an initiative to try to bring together the officials of India and Pakistan, very much the way the United States has brought together the officials in the Mid-East?

It might be that a morning in the Oval Office -- an invitation that few can resist -- could have some very dramatic effects of bringing those two countries to talk to each other.

DEUTCH: I think I'll take -- if I can, sir -- a pass on that. I think that's really a question about what is the way we want to carry out our policy with India between -- on the Indian subcontinent. And I don't think that I'm really in a position or the right person to address that question, sir.

SPECTER: Aren't you still a member of the President's cabinet?

DEUTCH: That's correct, sir.

SPECTER: We had a long discussion about that when you became a cabinet officer. I thought that opened the door to questions like that, Director Deutch.

DEUTCH: It certainly opened the door but not to the right answer, sir. I try very hard, as you know, not to allow myself as a principal intelligence officer to get involved in policy formulation.

SPECTER: OK. It does open the door, subject to being closed.

DEUTCH: Thank you, sir.

SPECTER: On the intelligence line, what is the threat assessment, as to Pakistan's development of nuclear weapons; the current strained relations; the likelihood of some military action between those two powers?

DEUTCH: I think that the tensions between those two countries -- the animosity that exists, the problems that are present in Kashmir -- all point to a very, very tense situation and one that we watch very closely. Hostilities there certainly are a possibility.

SPECTER: Director Deutch, you commented that the United States intelligence community ought not to take activity to give any company an economic advantage in international trade. There is a collateral concern about economic espionage and the ability of the U.S. intelligence community to protect -- not a sword, but a shield -- to protect U.S. competitive interests. How serious a problem is economic espionage today in its potential adverse effects against U.S. companies?

DEUTCH: I would have drawn the most serious concern to be from foreign corrupt practices in particular negotiations which may take place abroad in commercial contracts as being the most serious threat to unleveling a competitive playing field.

I think that the economic espionage against U.S firms' individuals is much less prevalent, but something that we try and assess. We do assess in foreign policymakers when we find that something is going on.

SPECTER: If you find that a U.S. company is the victim of economic espionage do you pass that information on to the company?

DEUTCH: No, sir, we would not do that. We would pass it on to a policymaker to make the judgment about the manner and way to ...

SPECTER: When you say a policymaker, who do you mean?

DEUTCH: Secretary of Commerce, Secretary of State, depending on the circumstances.

SPECTER: Well, I had intended to ask you next and will now about the subject that you broach, and that is of corrupt practices. We have a Foreign Corrupt Practices Act which properly prevent U.S. companies from bribing of public officials.

Other nations do not.

DEUTCH: Correct.

SPECTER: Senator Bennett Johnson, a member of this committee, and I have been talking really his initiative and his idea to introduce legislation which would impose a sanction on such a company in a foreign country. And perhaps impose a sanction on the country itself for not taking steps to stop those corrupt practices. What's your view of that?

DEUTCH: I'm not sure. I'd have to see the legislation and think it through. It's certainly, again, not an intelligence matter what legislation is adopted. I will say to you that I think that our community, intelligence community, should be monitoring parts of the world where corrupt practices do lead to an unfair marketplace for American business.

SPECTER: Well, those corrupt practices do come to the attention of the U.S. intelligence community, do they not?

DEUTCH: Yes, they do.

SPECTER: And how do you handle those? Pass them on to policymakers?

DEUTCH: That's correct, yes, sir.

SPECTER: Do you know what the practice of the policymakers then is by way of notifying the U.S. companies?

DEUTCH: I think that they are aggressive in that, but we can get you a more complete answer. I'm not prepared to do that now. Just, I'm literally not prepared.

SPECTER: With respect to our relations with Mexico, Director Deutch, just how serious is the narcotics trade out of Mexico? We have not adopted a policy of sanctions against our very close neighbor, but how serious is the drug traffic coming out of Mexico?

DEUTCH: Well, I think the Mexican government and we are of a single mind on this.

And that is, that it is very serious indeed. That there is a growing passage of drugs through Mexico. A growing manufacture of certain kinds of drugs in Mexico. It's very serious for the American people. It's very serious for the Mexican people and I think our two governments are quite together on the difficulty that this poses for us.

SPECTER: Well, in addition to being of a single mind on it, how effective is the Mexican government in acting against the drug traffic?

DEUTCH: We are working with them through our law enforcement cooperative agreements. Through the embassy down in Mexico City, through the State Department, to help them in their efforts to fight drugs.

DEUTCH: I would say that they are not as strong as we would like them to be.

SPECTER: Well, that's not -- I understand the limitations of your response, but that's not a very precise response. It seems to me we really -- I see you furrowing your brow. Do you want to supplement that or disagree with me?

DEUTCH: I'll be happy to be very much more precise in closed sessions.

SPECTER: Well, is the Mexican government really serious about stopping the drug traffic?

DEUTCH: I think the Mexican government and President Zedillo is very serious about it, yes, sir. Their intentions...

SPECTER: Are they effective at all on it?

DEUTCH: Not as effective as they should be, sir.

SPECTER: Well, I'm going to -- this is going to be my final round. There are some further questions I have as to Iran and Iraq, and perhaps I can pose the question and ask you to respond in writing, not to take any more of your time.

I would be interested in your assessment as to the level of cooperation with our allies on sanctions against Iran. We have adopted a policy of sanctions against Iran, and we are undertaking no discussions with them to try to isolate them.

From my observations, I do not see that as very successful because our allies are not supporting us in that. I would be interested in a written response on that subject, if you could provide it.

DEUTCH: Absolutely, Senator, absolutely.

SPECTER: And on the question of Iraq, I'd be interested in an updating as to your assessment as to how strong Saddam Hussein is at the present time and what the implications are of his welcoming back -- or at least the public reports about his sons-in-law returning.

DEUTCH: Yes, I'd be happy to do that, sir.

SPECTER: And I've been advised by my staff, and we want to pursue this further, but I want to put this issue to you publicly, that staff advisors at the NRO did not know the aggregate carry- forward and did not make those disclosures, and that that's demonstrated by the NRO now changing its policy on the amount in this account.

And also, staff advises, the NRO did not report to Congress these balances every year. What I'd like you to do is to take a look at those factual matters and let us know. And to the extent that you can provide those responses in an unclassified form, we would appreciate it, so they can be publicly disseminated.

DEUTCH: Yes, Mr. Chairman.

SPECTER: Senator Kerrey?

KERREY: I have no more questions.

SPECTER: Senator Robb.

ROBB: I look forward to the next witnesses. Thank you, Mr. Chairman.

DEUTCH: Thank you, Mr. Chairman.

SPECTER: Thank you very much, Director Deutch. If you would wait just a moment, I'd like to talk to you privately. And we will now call Lieutenant General Hughes and Assistant Secretary of State for Intelligence and Research Toby Gati.

Welcome, General Hughes and Secretary Gati. Let me, let us turn -- is there someone between you?

SPECTER: General Hughes, we turn to you first. To the extent that you can abbreviate your remarks, we would appreciate it. Whatever statement you have submitted will be made a part of the record, as will yours, Secretary Gati. And that will open up the time for questions and answers. Thank you.

HUGHES: I have no opening statement.



Assistant Secretary of State for Intelligence and Research


GATI: If I could, I would just like to follow up on some of the points that were made about the balance between military threats and the response by our country in order to diminish the threats to our country. And Senator Kerrey, it follows very much on your points.

In my testimony, I talk about one of the threats to our country being the lack of resources and capabilities to overcome problems and to not deal with opportunities. And I point to two specifics, one in Bosnia, and North Korea. And in my view, these demonstrate two things. One is the importance of intelligence, which is very clear in both.

And the second is the consequences if we had not had robust diplomacy and come through with successful negotiations. In North Korea, we have an agreement that has made it unnecessary for us to consider the use of U.S. troops, and I think therefore saving America enormous resources and tensions on the Korean peninsula.

In Bosnia, the successful negotiation led to the use of troops, but in a situation that is much less dangerous than the other alternatives that we faced. We had a crisis last week in the Aegean where intelligence was critical to preventing a crisis, but it was also true that diplomacy was critical to avoiding a crisis.

And so in addition to the identification of threats by the intelligence community, I did want to underscore that the threats that we've spoken about are made much more dangerous and the likelihood of having to turn to the military much greater because we have degraded the other responses -- our diplomatic presence, our foreign service officers -- programs that we cannot leverage to have countries respond in a way satisfactory to us without using the threat of military force.

Foreign service reporting is the lowest-cost, lowest-risk source of information and intelligence. And if we don't get information that way in parts of the world where we don't have other sources of information, we will turn to higher methods -- higher-cost methods and higher-risk methods. And I think, therefore, the connection between the two ought to be very direct.

I was just in Sarajevo, and certainly the military out there understand that the implementation of the Dayton agreements will determine the success of what happens in Bosnia.

Our troops are doing a very dangerous job and doing it exceptionally well.

GATI: But all of them understand that they are part of a much larger process -- a process that, I might add, is not funded to the extent that it needs to be.

Ask any intelligence personnel and they will say that a shrinking foreign affairs budget has direct and very detrimental consequences on intelligence capabilities. We lose information, we lose expertise, we lose the ability to deal with countries. And I think that's very important and follows very much, Senator Kerrey, on what you were saying.

KERREY: Secretary Gati, I have one question I wanted to ask on behalf of Senator Graham, who was concerned about intelligence documents that were seized from the government of Haiti, from the Cedras regime, by the multinational force during October '94's intervention.

The question that Senator Graham has is, when will those documents be returned?

GATI: Many of those documents have been returned. The concern we had was American names in those documents and making sure that it was returned without some of the information. Some of it has been returned, and there are plans to return the rest of it.

KERREY: Does the document implicate Americans in human rights violations?

GATI: No, it doesn't. Most of the information has connection with FRAPH, as opposed to human rights violations.

KERREY: What's the response of the Haiti government to our insistence on redacting American names?

GATI: They have not accepted the documents because they do not accept the premise of redaction. But the documents are there, and we are working to make sure that the rest of the documents do get down there. The American names will be taken out.

KERRY: General Hughes, if I could, the testimony that I had that you were going to give apparently has been -- you've made the decision not to present that testimony?

HUGHES: That's correct, sir. That testimony was prepared for my predecessor. I did not have a chance to look at it until yesterday and decided to withdraw it and submit new testimony that more accurately reflects my views.

Having just come from the J-2, and having done this work for a long period of time, I probably wouldn't have characterized my view of the global security environment in exactly the way that that prepared statement was written. So I hope that you will grant me the ability to resubmit a new prepared statement that more accurately reflects my views.

KERRY: Whose views are these?


HUGHES: They reflect the views of the author of the document, a Defense Intelligence Agency analyst, who did a very good job. And most of the paper I will probably endorse, but some of the viewpoints and ideas reflected in the paper I will change, and some of the words and the method of presenting ideas in the paper I will modify to meet my personal goals and desires.

KERRY: But, for example, do you view the world, the security concerns of the United States right now in a significant transition?


KERRY: And is a consequence of that transition, in some ways, a greater risk simply because we don't have the capacity to forecast as we have had previously? It's much more difficult to forecast today than it was 10 years ago.

HUGHES: At the risk of appearing somewhat frivolous, I'll quote from Casey Stengel, I believe, who said that forecasting is risky business especially about the future.

It has always been difficult, and it is difficult, perhaps, in a different way now than it was in the past. We no longer have the monolithic opponent, the former Soviet Union, but instead have disparate elements and groups around the world to have to look at in a more complex way.

So it is more difficult, but it is not...

KERREY: But some basic facts are changing.

HUGHES: Some of them are.

KERREY: Well, let me put a fact that is in the testimony...

HUGHES: Yes, sir.

KERREY: And tell me if it's a fact or not, if you perceive it to be a fact. It is a fact that as a percent of the world's GDP, defense allocations are dropping...

HUGHES: I do not agree with that statement.

KERREY: You do not agree with that?

HUGHES: I do not. I repudiated it yesterday. That is in fact one of the key reasons I withdrew that testimony. That statement, as far as I'm concerned, is wrong.

KERREY: So, how would you describe it? As a percent of GDP, the amount being spent on military is the same, you expect it to remain the same?

HUGHES: I don't dispute necessarily -- in fact, I don't know for sure whether or not the percent of gross domestic product spent on militaries around the world has indeed declined in every case, or in key cases. In fact, I have reason to believe that in some cases, it may have declined not because of national policy but because of ability. But the point is that we still have nuclear threats extant in the world which potentially can be used against us, or against our national interest.

We still have armies, regionally if not globally, which are threatening to our interest. We still have conflicts ongoing, and potential conflicts in the offing, which have little to do with the expenditure of gross domestic product at this time, or in the near term. They are going to continue.

KERREY: Well, yeah -- the testimony, the statement does not suggest that military is not important. What it is suggesting is that as we try to assess the risk, we can't look to the dependability of tyrants as the arbiter of what that threat is going to be.

HUGHES: Certainly, correct.

KERREY: And what is occurring is, that as a consequence of power is, perhaps not as a consequence, it is certainly occurring simultaneous with it. The power is shifting away from the government, from the person that is in charge of the government. We have a dictator in Russia. That dictator has got power and that dictator controls the military and that dictator controls a great deal of what is going on -- today you don't have a dictator in Russia.

You, in fact, have a president whose popularity is decline as a consequence of the military action of Chechnya, which was largely unsuccessful.

So that's a big change for us. It's not a small change, it is a very big change. I don't know exactly what it means, but it seems to me that as we look to Russia right now our number one question right now is: You know, what's going to happen after the election in June?

It's a political question. A question that gets to their history, it gets to their culture, it gets to questions that are much more difficult to answer than were previously -- than we were previously trying to answer. And they are answered in different ways.

It doesn't mean that you're still not using technology resources and intelligence resources to answer a set of questions that remain inside of Russia.

KERREY: But it does mean that we're shifting, that we're in transition and I think a factual analysis is very relevant in that regard. So if this is factually incorrect I hope in your revised testimony that you'll give us some sort of sense.

I mean, how much of the world's GDP is being deployed to the military? What are the consequences of having fewer numbers of dictators? If we have fewer numbers of dictators. I presume we do, we say it often enough. Certainly in the most relevant country to the Cold War, the Soviet Union, that is the case. But as we try to assess the threats, the more factual that we can get it seems to me that more likely it is that we're going to both authorize and appropriate, not only the resources that we need today, but resources that are likely to be needed out there in the future.

HUGHES: Sir, my goal is to provide you factual information, now and in the future and that's what I intend to do.

KERREY: Well, I was casting fun with your testimony here, General Hughes. I'm not going to be able to, I look forward, I guess, to getting the additional testimony. But I would appreciate, in particular -- you've heard some of the comments that I was making earlier to Director Deutch.

You know, about what we should consider to be a threat to us. What sort of signals out there are we looking for. I mean, I too, as Dr. Deutch did, would enumerate more things in economic disparity when you're looking for a causative agent to terrorism. But if this chaotic scene that we witness, with population growth and inability to govern themselves that we witness constantly, I mean, we witness that on a relatively regular basis. If that is of concern to us then it seems to me, and if it is a concern that has with it a threat to some vital U.S. interests potentially out there in the future, it seems to me that we at least ought to table it for a discussion. We at least ought to table it and say, "We may come up with an answer that's inconclusive."

We may come with an answer that may say, "The United States can't have any impact at all." But to ignore it when somebody that prepared this testimony, at least, was of the opinion that out there in the future that could become a concern. To ignore it, it seems to me, would be foolish. I mean, we would hope that history forgets that we ignored it.

HUGHES: Let me assure you that we're not ignoring it and the characterization that you've made about the dynamic of deteriorating conditions inside nation-states or regionally, which do, sometimes, degenerate into combat, is one that I agree with.

KERREY: Do you agree with the statement that's made in here that says Iran is neither interested in nor capable of directly challenging the United States militarily?

HUGHES: If you're talking about a direct challenge against the United States, I probably agree, with the exception of their involvement in international terrorism where I do believe they are directly challenging and have directly challenged U.S. interests. If you're talking about U.S. vital national interests in the Arabian Gulf and in the Persian Gulf, depending on which side of that body of water you happen to be on, then I do believe that they are capable of and perhaps have an intent to, if conditions are right, challenge our vital interests.

And we have to be aware of that, be certainly interested in it and have the ability to react appropriately or to act in advance to deter them from taking precipitous action that might lead to conflict.

KERREY: Ms. Gati, do you or Secretary Gati, do you think that our foreign aid package reflects the threats that were identified earlier by Secretary Deutch. He identified South-West Asia as being the top of his list, Middle-East being second. Do you think that we are on the foreign aid side meeting the threat in a complimentary fashion?

GATI: Well, I think in some areas we clearly have used assistance in the Middle-East for example, to husband the peace process the along. And we've been very successful in that regard and in other areas, we don't have the tools to use as much.

Perhaps in Asia, where many of the economies don't need it. China would need, of course, assistance as a developing country through international institutions. But I think the area where we probably -- I would have to give you a negative answer is Africa where our assistance is clearly not up to the task of forestalling some of the problems there. We spent several billion dollars on humanitarian crises in Africa and on sending America troops and troops of other countries. No where near the amount was spent in preventive diplomacy or in assistance which might have forestalled some of those actions. And most people looking back on it would say the opportunity was lost at a much less cost to avert some of those crisis.

SPECTER: Thank you Senator Kerrey. General Hughes, I had to step outside for a moment or two where I chose to talk to Director Deutch and I did not hear the testimony about this paragraph on redefinition of power. And I understand you have -- I hear the term repudiate? Is that the term you used?

HUGHES: That's correct sir. The statement, the entire statement was prepared for my predecessor. And during the last few days of transition, I was able to read the statement and yesterday decided that it did not reflect my views. I asked the committee for the opportunity to resubmit prepared testimony within the next few days.

SPECTER: Does your predecessor agree with his statement.


HUGHES: I don't know, sir. I never had a chance to talk to him about it.

SPECTER: Well, I have studied in more detail this paragraph since I heard you repudiated it and I like it.


It reminds of the statement that Professor Strauss-Hupe might have articulated. I took political science at the University of Pennsylvania and Dr. Strauss-Hupe was a professor at that time. He has since had an illustrious career in the State Department and this could -- redefinition of power could occupy a political science class for days, perhaps weeks. And as I studied it as I say in detail since you repudiated, I passed it off kind of casually before. I think it's worth reading.

"Redefinition of power. As we look beyond the turn of the century, we can expect to see a continued redefinition of what constitutes state power. As the percentage of the world's GDP direct at the defense continues to drop and as the world's present day tyrants pass from the scene, the military component of state power is going to get smaller still.

SPECTER: Of course, military issues still matter, but perhaps somewhat less than they used to."

In January, Senator Shelby and I had occasion to talk to Prime Minister Peres, and one of the interesting things that Prime Minister Peres said, and he says many in the course of a short discussion, was that 100 hotels are more important than 100, and his voice dropped. And I'm not sure whether he said tanks or weapons or whatever.

But your statement about redefinition of power reminds of what Prime Minister Peres said. And it may will be, as we move into the next century, that economic issues and regional economic activities and a warm peace, if we can get one between Israel and Syria, may provide a great deal more security than those missile systems and the missile defenses. So maybe you ought to reconsider your repudiation.

HUGHES: Well, I will reconsider and I'll submit a written statement.


I will tell you, sir, that I have no idea, if it's in fact true, that the gross domestic product of many countries, particularly aggressor nations around the world, had indeed dropped. I also do not believe that to draw a parallel from the spending of resources on military activities by some countries means that the military component of national power is less important or less critical than it ever has been in the past.

I'm unwilling to draw that form of logic out in my thoughts. Instead, I'd point to the ongoing conflicts around the world to the potential for conflicts outlined by DCI Deutch, which I concur with. And there's no sign to me that the world is somehow become or will become safer merely because we have achieved some greater economic power throughout the world.

I do agree that good economic conditions are a precursor, in many cases, to peaceful conditions. I think it's critically important to have good economic circumstances, but there are many other issues involved, and I don't wish to treat it in such a simplistic manner.

So if you'd allow me, I'd like to submit different testimony and I will consider carefully my words on this topic.

KERREY: (OFF-MIKE), Mr. Chairman, I think one of the ways that we might conduct these hearings in the future is to have all witnesses present the testimony of somebody else. Because, I mean, it's pretty good...


HUGHES: It might be an interesting idea.

KERREY: Well, I mean, because in truth, in this I think rather thoughtful analysis, I don't know if it's accurate either.

I mean, that's the purpose of these testimonies is to provoke us to think about what the threats are and how we all know we need to reorganize in some fashion. That's not the question. The question is how.

The question is not is there a threat, the question is, what is the threat and how do we meet it. And this individual who goes on to say, whoever he is, probably the person who wrote "Primary Colors," I'd guess, wrote, says that there is an asymmetric response.

There is a problem out there, a new threat from potential enemies that have the option to challenge us militarily using an asymmetric option as a choice. In other words, using something that might inflict politically unacceptable casualties.

I mean, it's a different kind of threat, and so you're quite right. I mean, there is no, it doesn't necessarily mean because, and let's presume that as a percent of world GDP, military expenditures are going down. That doesn't necessarily mean that the threat is going down in a similar fashion.

It means that you've got a different kind of threat out there, a different kind of ball game than we've had in the past. I just, I suspect, knowing, General Hughes, your own views of the world and your own willingness to tell it like it is that your own testimony is going to be similarly provocative.

KERREY: Provocative in a good way. I don't mean provocative in a devil's advocate way, but I mean provoke us to rethink some of the old (OFF-MIKE) that we've held onto for years and years and years.

And to rethink them in a fashion that'll make not only the United States safer, but hopefully the world safer, too.

HUGHES: I hope so, sir.

SPECTER: Senator Kerrey is always well prepared and he always reads the statements in advance.

I haven't seen him come with one so heavily interlineated as he has on this one. This is marked up like a fourth-hand copy of a law school textbook and he could barely wait to get Director Deutch so he could start to ask you questions about it.

In fact, he was so anxious he even questioned Dr. Deutch about your statement. I've never seen that done before and quite that way.


And I've seen quite a few witnesses questioned about statements. But that was very provocative. And if the author of this statement is in need of employment, send him around to me. I think he's got some good ideas.

KERREY: (OFF-MIKE) I was beginning to follow on that, Mr. Chairman. I do think one of the challenges that we've got is to, you know, is to take a clean-slate look.

SPECTER: Staff's very unhappy over here. They wonder who's going to be replaced.

KERREY: We know that the current organization is inadequate. We've got a taskforce out there, headed by Harold Brown. He's going to make some recommendations to us. We know we have to change the organization. Director Deutch knows, you know, all of us that have looked at it understand that that change needs to occur.

And the change needed to occur not just because we can improve our organization, but because the world's no longer static as it once was and there's a lot of things going on out there that are apt to appear 10 years from now to be very predictable that we probably aren't thinking about today.

And I hope, as I said, and fully expect given your willingness to tell it like it is.

That when you modify this statement and make it in your own words, words that you can defend that you'd be similarly provocative.

HUGHES: I will. Let me just say so there's no misunderstanding here that the author of that paper is Mr. Russ Travers, an outstanding Defense Intelligence Agency analyst, who's sitting behind me here and we want to keep him.

SPECTER: Author, author ...

HUGHES: The author ...


HUGHES: The very timid secondary gentleman sitting here.

SPECTER: I'd like to know if the author prefers to have been identified or would have preferred not to have been identified?


Too late now to find that out.

I had the lights turned off because I didn't want Senator Kerrey to feel too bad about using so much of my time.


Secretary Gati, I have a couple of questions for you and then we'll adjourn. We've run very long, but I think its been a very, very productive hearing.

With respect to the question of sanctions against China on the missile issue and you're an Assistant Secretary of State and this may not be your precise bailiwick, but why not really get tough with China? And really impose the maximum sanctions available to show them we mean business on nuclear proliferation, especially at a time when China is so bellicose toward Taiwan?

And there are not a whole lot we can do about imposing sanctions, perhaps I shouldn't presume that? Can we impose sanctions on China for what they're doing as to Taiwan? I guess we could. But focusing on the missile issue, why not really be tough on the imposition of sanctions there?

GATI: I think as a policy judgment that would have to be made by a different Assistant Secretary and by the Secretary himself. From our point of view ...

SPECTER: How about the President?

GATI: And the President, of course, with our recommendation.

GATI: From our point of view, we have been providing the information that the DCI talked about, about Chinese violations, trying to come up with a case that would indicate certain patterns of behavior.

And we have presented that information. I think you would want to consider Chinese behavior on that issue as one of the most serious issues we deal with Chinese. And if sanctions are required, we would call it straight and give the recommendation that the intelligence was absolutely clear on that point.

We had not made that determination in the department. And the Secretary is now looking at that issue.

SPECTER: Well, I hope that the administration will act promptly on it because it has been very much a matter of enormous public concern. And I understand what happens. You have a media report and then you have a denial, which the White House press officer did last week. And -- no, those facts are not confirmed, no, we haven't made a decision as to what we're doing. But the more time that passes, the more it -- the more problem.

And this issue of nuclear proliferation is second to none on the problems which this country and this world faces.

We've been working -- a number of us on the committee have, on trying to centralize authority on nuclear non-proliferation. In an administrative check, the chart on the executive branch handling of nuclear proliferation is more complicated than the chart on the Clinton health care program, if that's really possible.

But if we don't get tough on this one, I think it's an open door to the world, on people who would flout the proliferation regimes.

Last question, Secretary Gati.

On Iran -- and this is a subject that I have discussed with the Secretary and the number two man. And I understand the State Department view about isolating Iran. But I've always had questions about the advisability of that. And you folks are the experts.

But can it possibly work if our allies don't join us in the boycotts, in isolating in Iran. And from the intelligence point of view that is your bailiwick specifically. Are our allies cooperating with us on isolating Iran?

GATI: Our allies have a different view on the policy toward Iran. That does not mean they don't cooperate on certain aspects, provision of credits, provision of certain materials to Iran. So it's not a black and white question of cooperating.

SPECTER: What is the color, deep gray, deep purple?

GATI: I think they view our policy as one -- they would prefer a different option. But I do believe that they are convinced. And I think that actions in Bosnia, for example, convince them more, that Iran poses a danger through terrorism, through its support for extreme action, its opposition to the Middle East peace process. And our actions, I think, do provide a model in certain areas. Credits would be one of them.

Support for development of the oil industry would be another. But we do have a policy difference on that. So our determination, in the intelligence community would be what is Iran's danger to the international system. And we have shared that as much as we can with our allies.

SPECTER: Can our policy possibly succeed if our allies do not cooperate?

GATI: I think parts of our policy can succeed. I think ...

SPECTER: How, can it succeed in isolating Iran if our allies do not join in the isolation?

GATI: I think the job of intelligence is to provide information which is persuasive so that over time the logic behind a policy of isolating Iran would become more and more in the open.

But it is a question whether you can isolate any country unless everybody cooperates.

SPECTER: That's the question I started with. Can you isolate any country, including Iran, unless everybody cooperates? And I think the answer regrettably is no. And if you cannot isolate Iran, shouldn't we rethink our policy?

GATI: Well, we have slowed down the acquisition of materials that would help Iran's industrial base or its weapons base. The economic situation in Iran is certainly worse than it would be if we had not had our own policy. So I think we have had a measure of success which the intelligence community can measure. Would the policy be more successful if it was joined by everyone? The answer is undoubtedly yes.

SPECTER: Well, of course that is the case. They are not as well off economically as they would have been had we traded with them. Would our policy be more successful if other countries joined us? Sure.

But does the policy have a realistic chance of succeeding or should we reevaluate the policy in the light of the high improbability of success without more cooperation from our allies? Now, that's a very important question on the docket in Arizona tonight on the Presidential debate.

Thank you all very much. That concludes the hearing.