(Excerpts)

Good morning. I welcome the opportunity to be here today to talk about the ballistic missile threat to the United States. Assessing and defining that threat to our homeland and interests worldwide is one of the most important intelligence missions in the post-Cold War world. And I must tell you that we consider foreign assistance to be fundamental to the threat, not merely an incidental aspect of the problem. Finally, the threat is real, serious, growing, and dynamic. For example, since our annual report six months ago, the Ghauri, Shahab 3, and Taepo Dong 1 missiles/launch vehicles have all been tested. For these reasons, we are mandated by Congress to report on our assessments of this threat annually.

At the outset, let me emphasize how appreciative we are of the Commission's work. I particularly like the fact that they received approval to publish a relatively detailed unclassified report on the threat. As you have undoubtedly heard, we gave the Commission access to all the available intelligence information, regardless of classification. The Commission made a number of excellent recommendations for how we can improve our collection and analysis on foreign missile developments. Indeed, their report reinforces the DCI's call for a stronger investment in analysis and more aggressive use of outside expertise. Incorporating the Commission's ideas will strengthen our own work in this area.

We and the Commission agree that the missile threat confronts the Community with an array of complicated problems that require innovative solutions. At the same time, the Commission challenges some of our conclusions and assumptions, particularly those in our 1995 National Intelligence Estimate--Emerging Missile Threats to North America During the Next 15 Years (NIE 95-19). Our March 1998 Annual Report to Congress on Foreign Missile Developments was prepared in response to a request by Congress for a yearly update of that assessment.

Under the DCI's direction, the 1998 report responded to legitimate criticisms levied at our earlier work. It also incorporated the recommendations of outside experts who reviewed the 1995 NIE. As a result, the 1998 report already addresses many of the Commission's concerns, especially those regarding how we discuss foreign assistance, alternatives to increasing a missile's range, and approaches to circumvent development. Work is already underway on the 1999 report, and we are looking differently at how we characterize uncertainties, alternative scenarios, and warnings as a result of our interaction with the Commission the past several months and I expect successive reports to be better, addressing additional questions as they are asked.

This morning, I will outline our March 1998 report; discuss areas where the substantive conclusions of the Commission's report and our thinking agree and differ; and discuss what we are doing differently for our 1999 report.

Our 1998 Report

Secretary Rumsfeld has expressed concern that people not judge the Commission's report before they read it. While I share that concern regarding our 1998 annual report--which gives a full appreciation for our views and concerns about this growing threat--it remains classified, and therefore cannot be released to the public. But, I can give you a feel for what the report says.

In our report, we underscore the significant role foreign assistance has played and continues to play--indeed throughout the report are several major discussions of technology transfer. For example, the report begins with several pages discussing the extent of foreign assistance from numerous suppliers to even more recipients. It also notes how foreign assistance has helped specific missile programs, such as assistance with Iran's Shahab 3 missile.

Our report also underlines the immediate threat posed by medium-range missiles, our continuing concern about existing and emerging ICBMs, and the increasing danger that comes from the proliferation activities of countries that possess or are developing such systems. We and the Commission have some different views on some of our timelines for ICBM development, using the available evidence, group debate, and outside expert review. Nevertheless, where evidence is limited and the stakes are high, we need to keep challenging our assumptions--a role we will perform on this issue at least annually.

Let me make three points on our methodology.

• First, we do not expect countries to follow any specific pattern for missile development. In fact, the United States, the former Soviet Union, and China all took different approaches. We frequently caution ourselves against any mirror-imaging. Just because the United States, Russia, or China was able to accomplish certain feats certain ways in a specific period of time-short or long--does not mean another country will.
• Second, we recognize that foreign countries can hide many activities from us. These countries are generally increasing their security measures and are learning from each other and from open reporting of our capabilities.
• Third, our methodologies really are not that different. Given the fact that in many cases we have limited data, we are both forced somewhat to use both input and output methodologies to evaluate the threat. The biggest difference in methodology is that the Intelligence Community must attach likelihood judgments to our projections; the Commission did not. Thus, we project our most likely scenarios and then include other scenarios with likelihood judgments attached. The Commission illustrated several possible scenarios, which we agree are possible, but did not attach likelihood judgments. But let me repeat, we agree that their scenarios are possible, as are many other scenarios we have looked at, including outright sales.

Let me now summarize the body of our 1998 report, which focused on threat projections through 2010:

Theater-range missiles already in hostile hands pose an immediate threat to US interests, military forces, and allies. The threat is increasing. More countries are acquiring ballistic missiles with ranges up to 1,000 km, and more importantly, with ranges between 1,000 km and 3,000 km. As Iran's flight test of its Shahab 3 medium-range ballistic missile (MRBM) demonstrates, this is not a hypothetical threat. It is a reality that has to be dealt with now. With a range of about 1,300 km, the Shahab 3 significantly alters the military equation in the Middle East by giving Tehran the capability to strike targets in Israel, Saudi Arabia, and most of Turkey. The Pakistani Ghauri, also tested this year, allows targeting of Saudi Arabia, Kuwait , and the Gulf.

Foreign assistance is fundamental to the growing theater missile threat. As we describe in the 1998 report, for example, Iran received important foreign assistance in developing its Shahab 3 MRBM. Moreover, countries are seeking the capability to build these missiles independently of foreign suppliers. The growth in the sharing of technology among the aspiring missile powers is also of concern.

While we project that Russia's strategic forces will shrink, they continue to be modernized and will remain formidable. China has about 20 CSS-4 ICBMs, in addition to shorter-range missiles. Most of these are targeted against the United States, and modernization efforts will likely increase the number of Chinese warheads aimed at the United States.

Our report further noted that we judge that an unauthorized or accidental launch of a Russian or Chinese strategic missile is highly unlikely, as long as current security procedures and systems are in place. Russia employs an extensive array of technical and procedural safeguards and China keeps its missiles unfueled and without warheads mated.

Among those countries seeking longer-range missiles, we believe North Korea is the most advanced. Its Taepo Dong-2 (TD-2), which we judged will have a range between 4,000 and 6,000 km, could reach mainland Alaska and the Hawaiian Islands. Our report noted that North Korea could flight test the missile this year and that it could be deployed in a few years. Beyond the North Korean TD-2, we judge it unlikely, despite the extensive transfer of theater missile technology, that other countries (except Russia and China as just mentioned) will develop, produce, and deploy an ICBM capable of reaching any part of the United States over the next decade.

Of course, the key word here is develop. As the report noted, the purchase of a missile, either complete or as components of a kit, is a different matter. In fact, we identified several alternative scenarios for a country to acquire an ICBM capable of reaching the United States sooner than 2010. These include buying an ICBM or SLV to convert into an ICBM, or buying a complete production facility for either. We judge that the current policies of Russia and China make these scenarios unlikely, given potential political repercussions, the creation of a self-inflicted threat, and China's own military needs. Our report points out that we cannot be certain that this will remain true over the long term. Indeed, the further into the future we project the politico-economic environment, the less certain we would be that the 'value' of the sale would not outweigh these factors in foreign thinking. And, as North Korea develops its Taepo Dong missiles, their sales become an increasing concern.

A number of countries have the technological wherewithal to develop the capability to launch ballistic (or cruise) missiles from a forward-based platform, such as a surface ship. Forward-basing from dedicated vessels or from freighters could pose a new threat to the United States in the near term--well before 2010.

Our 1998 report assesses that our abilities to warn about the above-mentioned threats and postulated concerns vary:

• We could provide five years warning before deployment that a potentially hostile country was trying to develop and deploy an ICBM capable of hitting the United States, unless that country purchased an ICBM or space launch vehicle (SLV), including having another country develop the system for them); had an indigenous space launch vehicle (SLV); or purchased a turnkey production facility.
• We could not count on providing much warning of either the sale of an ICBM or the sale and conversion of a SLV (conversion could occur in as little as two years). Nevertheless, if a hostile country acquired an SLV, we would warn that the country had an inherent ICBM capability. I note, however, that both the United States and the Soviet Union used systems we did not consider as ICBMs to place their first satellites into orbit. The satellite we orbited weighed only 14 kg.

These two warnings need to be understood in tandem. Unfortunately, the warning related to sales may dominate in the near term. As North Korea proceeds with its Taepo Dong developments, we need to assume that they will follow their current path and market them; at a minimum, aspiring recipients will try to buy them.

• We probably would obtain indications of the construction of a turnkey facility before it was completed, providing several years' warning.
• If a country had an SLV, it could probably convert it into an ICBM in a few years, significantly reducing warning time.
• Adapting missiles for launch from a commercial ship could be accomplished covertly, and probably with little or no warning.

Finally, our report noted that nonmissile delivery of weapons of mass destruction--chemical, biological, nuclear and radiological weapons--pose a serious, immediate threat to US interests at home and abroad.

Where We Agree

Now I'll go over some of the points of agreement between our 1998 report and the Commission's work. We agree that:

• The threat is real and growing. The medium-range ballistic missile threat to US interests in the world is already upon us. Missile forces of Russia and China pose a significant threat to the United States and this threat will continue to exist for the foreseeable future. Our reports also agree on North Korea's capabilities.
• Foreign assistance and the proliferation of ballistic missile technology is the fundamental reason for the growing ballistic missile threat.
• Foreign denial and deception efforts and resource constraints are making it more difficult for us to monitor foreign missile developments.
• Finally, there are plausible scenarios that could result in an increased missile threat to the United States for which there would be little or no warning.

Where we disagree

I will now walk through some of the areas of disagreement between the Commission and our 1998 report. The Commission's report indicates that intelligence analysts are too dependent on evidence and seem unable to make judgments without it. In actuality, despite the lack of evidence in some areas, our analysts make judgments and projection. I highlight that to allay concerns that we would consider 'the absence of evidence' to be 'the evidence of absence.' Quite the contrary, our analysts routinely face gaps in their evidence and must make analytical judgments to project plausible scenarios. We need to do better. Working with limited evidence and make judgments is central to our job, as long as we underscore where we have little or no evidence. They did so in the case of the critical threats some missiles pose. In fact, we note that successful missile tests would give countries an emergency, launch capability with any missiles in their inventory, even without evidence of deployment.

As I indicated earlier, we are in basic agreement with the Commission on North Korea. While they did not indicate so, I assume they do not disagree with our judgments that North Korea was capable of testing both the Taepo Dong 1 and 2 this year.

The Commission considers Iraq to be behind North Korea and Iran relative to ballistic missile technology. We view Iraq as further along in some ways. Iraq was ahead of Iran before the Gulf war. They have not lost the technological expertise and creativity. If sanctions were lifted and they tried to develop indigenously a 9,000 km range ICBM to be able to reach the United States, it would take them several years. If they purchased an ICBM from North Korea or elsewhere, it would be quicker, depending on the range and payload capability of the missile. If the missile already had the range capability, further development would be moot.

The Commission considers Iran to be as far along in its technological development efforts as North Korea. In our view, that is not the case. The recently tested Iranian Shahab 3 is based on the No Dong and followed North Korea's test, even with foreign assistance, by several years. Iran will likely continue to seek longer range missiles, and would need to develop a 10,000 km range ICBM to be able to reach the United States. If they follow a pattern similar to the Shahab 3 time frame, it would take them many years. On the other hand, if they purchased an ICBM from North Korea or elsewhere, it would be quicker, and depending on the range and payload capability of the missile, further development might be a moot point.

The Commission indicates that our ability to warn is eroding and that we may not be able to provide warning at all. I've covered our views on warning earlier, and I fear further detail would only help proliferators more. They're already learning how to hide some aspects of missile programs, I'd rather they not learn more. I will say this, however. We need to be much more explicit in our warnings about missile developments--not just indicating that a country has an ICBM program and that it could flight test an ICBM this year, both of which are important messages. We need to include clearer language and more details about how we might and might not be able to warn about specific milestones in an ICBM development effort, judgments that will likely vary by country.

1999 report

We are already working on the 1999 annual report and are planning to include significant additional outside expertise and red teaming into next year's report:

• Private-sector contractors will be asked to postulate missile threats that apply varying degrees of increased foreign assistance. These will be in addition to the Commission's postulations and some of our own.
• We are also asking academia to postulate future politico-economic environments that foster missile sales and ever increasing foreign assistance.
• In addition, the Intelligence Community recently published a classified paper that postulates ways a country could demonstrate an ICBM capability with an SLV, and examines various ways it could convert its SLVs into ICBMs. This work will also feed into the 1999 report, as a generic look at some alternative approaches.
• Finally, drafting is underway on a paper that examines how countries could push Scud technology beyond perceived limits. Scientists and non-scientists are involved. Sometimes, those already outside the box can think so more readily.

We also intend in the 1999 report--after discussing our projected timelines for likely missile developments and deployments, as well as our concerns for ICBM sales--to postulate and evaluate many alternative scenarios, including those developed during the Commission's efforts and those mentioned above. Finally, we will be much more explicit in our discussions about warning. All these evaluations will be made through the lens of potential denial and deception efforts, to ensure that as our task gets more difficult, we provide our policymakers with a clear representation of what we know, what we don't know, what we can't know, and finally what we judge based on evidence, the lack thereof, and expertise from inside and outside the government.

Community Enhancement

In recent months we have undertaken numerous steps that will enhance the Community's abilities to tackle the increasingly difficult tasks we face, including addressing the emerging missile threat. For example, we have increased "red teaming" efforts to ensure that we question our assumptions and examine out-of-the-box possibilities. Furthermore, last year the DCI strengthened the Nonproliferation Center to ensure that we have an aggressive, well-coordinated effort to address the nonproliferation target. At DCI direction we are taking actions to ensure that we have the analysts and skills needed to cover those issues of greatest importance. These include:

• Increasing the size of the analytic cadre.
• Creation of the Community executive boards to leverage the best experts on critical issues to drive collection and analysis against the most significant intelligence needs and gaps.
• Introducing new training methodologies, technologies and analytic tools, and improving the mix of skills to address our most pressing problems.
• Creating mechanisms to increase cooperation and better integrate the efforts of all analytic production centers.

Conclusion

This is a serious and complex issue, one of many others that we're working. The Intelligence Community uses many vehicles, including estimates and annual reports, to convey our analyses to policy makers and Congress. We will continue to do so.

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