in exchange competition. to what extent are the two phenomena related. >> i don't believe that there is any relationship between those two. earlier larry testified as to the cyclical and economic issues that are affecting the number of listings in the u.s. versus international listings and i agree with that testimony. the number of exchange in fact has created a larger opportunity for companies to trade in the u.s. and to trade at some of the lowest levels of costs that they've ever had as an opportunity. so i don't see a relationship between the two and i don't think that this merger will have any impact on the number of companies listing. but in fact, quite the opposite. it will be a strong attractor to a company that wants to list

with a global exchange and potentially have dual listings in new york and frankfurt, and more and london and paris. and there is an opportunity on a global basis to create a level of competition that does not exist today. >> well, "the wall street journal" has reported that alleviate antitrust concerns, deutsche boerse may opt to dilute its share by bringing in new bank investors. is deutsche botheerse still considering this strategy? >> ise owns 31.5% of direct edge. when you translate that based on their market share of how much equity volume they trade, that's a little less than 3% of the average daily volume in the equities market. we have shared this information with the department of justice and they're reviewing all of the material that we've provided. it would be too soon to theorize

as to what their potential response would be. and what they would ask deutsche boerse to do with direct edge going forward. >> i thank the gentleman. the gentleman from florida, mr. deutsche, who i guess will disavow any affilation with deutsche boerse is now recognized. >> thank you, mr. chairman. i was just thrilled to see that this hearing is about anything having to do with deutsche. mr. lebowitz, if i may, if you could walk through, please, just some of the, if you could address some of the questions that stem from your earlier comments. you acknowledge that the new york stock exchange has always stood as a global symbol for trade and commerce. i'd like to explore that a little bit, particularly how the new york stock exchange might

be, how that view of the new york stock exchange may or may not be altered after a merger like this. first of all, if you could just walk through. i know you said there would be a building. where will all the headquarters be? >> the headquarters will be as it is now at 11 wall street as well as frankfurt. we're currently duly headquartered in frankfurt and paris and we will instead of headquartered in frankfurt and new york. >> could you flesh that out, how those dual headquarters will function? >> the ceo of our current company is duncan neederhaur, he's going to be the ceo of the successor company and he will still be based in new york. i am the chief operating officer and my main responsibility for all of our equities markets around the world, nyse, paris, brussels, lisbon. i will continue to have those responsibilities, plus the frankfurt stock exchange and i will also be based in new york. the head of the global

derivatives business, is also the head of urex, andreas price. >> and when you add a second headquarters, what impact will that have on american jobs, if any? >> we're actually moving the headquarters from paris to frankfurt so that has no, no net effect on the u.s. >> so the merger should have no net effect on jobs in the united states? >> well not in that, no. >> in some other way? >> well, we're obviously looking at how to combine companies. jobs is not, this is not a deal about cutting jobs. it's about creating value. and we think in the long run this is going to be good for america and american jobs. >> in the short run, in order to create that value, will there be jobs cut? >> there will be some of both. if you look at what happened in the urex merger, we were cutting jobs and investing in businesses, we kraelted nyse life.

which is an exchange. we bought the american stock exchange and increased the number of people who were doing amex options and so on. and we'll be continuing to make investments in our technology business. remember there's not a lot of overlap in the businesses between u.s. businesses and between deutsche boerse and nyse urex. so i wouldn't expect many job losses. >> so in the new company, which shareholders -- how will voting control work? >> sure. this is really, this is a public company and this is common stock. so the combined company should have 55 to 60% u.s. shareholders. and we expect to have a large u.s. shareholder base. because it's an important company for u.s. institutions. >> i'm sorry. if you could walk through that again. you said you expect 55% to 60%. u.s. shareholders. and then you went on to explain

that you would expect there would be a strong u.s. ownership. >> i think it will continue that way, because the exchange space and in particular, our stock has been highly followed by u.s. mutual funds, value stocks. and so i think that that will continue. that's the base that's going to continue to hold the stock in the future. we're currently 85% u.s.-held. deutsche boerse is only 18% german-held. it's 35% u.s.-held. even that one is more u.s.-held than any other shareholders. and the combined stock will start at 55-60. chances are it will probably grow from there. >> and is, is a part of, of this merger, this proposed merger transaction, retaining the name of the new york stock exchange in new york? >> sure. the nyse company will be a company, it will be incorporated in delaware, just as it is today. it will have a supervisory board in the united states. and it will be under s.e.c. regulation, just as it is today. >> right.

will the name of, will the name of the entity be the new york stock exchange? >> the name of the holding company will not be the new york stock exchange. >> well i'm sorry -- >> to be honest with you, we don't know what the name is. we haven't made that determination. it's not like we've made it in secret. we honestly haven't spent our attention on it. >> you can't confirm now that after this mercker, the new york stock exchange will continue to operate as the new york stock exchange? >> no, i said the new york stock exchange will operate as the new york stock exchange. >> that is a condition of the merger that you're agreeing to, that it will forever continue to operate as the new york stock exchange? >> absolutely. the new york stock exchange will stay the new york stock exchange. just like the frankfurt stock exchange will stay the frankfurt stock exchange. >> thank you, appreciate it. thank you, mr. chairman. >> i thank the gentleman, the gentleman from pennsylvania, mr. marino is recognized for five minutes. >> thank you, sir, i apologize for being late. i just came from another committee meeting. >> we're pleased to have you. >> gentlemen, thank you for being here. mr. lebowitz, i was not quite

clear on your question by my colleague on the other side concerning jobs that may be lost in the united states. do we have any indication on how many jobs may be lost in the united states? and how many jobs may be gained outside of the united states? can you give me a number, please? >> so i would expect, i would expect that there will be more jobs lost outside the united states in the short run. there will be few jobs lost inside the united states and then there will be growth of jobs in the united states. and abroad as well. >> okay, could you just go into a little bit more detail on the growth for jobs in the united states? and what you think of, what period? >> yeah. we are growing our technologies business. we had set $1 billion revenue target a couple of years ago. we're about half of that now. that's a business we're investing in intensively. a lot of those jobs are in the united states. we're building a futures business in the united states. it is the main competitor to the cme. it's a very business right now. we have high hopes for it. so those are two of our biggest

growth businesses are in the united states. and we're going to continue to hire in those areas. >> and mr. katz, do you have any comment concerning the lack of or growth of jobs? >> well i agree with mr. lebowitz, that the, the prospects for growth as a result of this company are stronger and have a higher probability than the prospects of a loss of jobs. there are great opportunities to build businesses and innovate. and as we have an opportunity to join with nyse urex, that will even further come to light and develop as we begin do make investments into those new businesses. so i believe that over time, we will continue to grow the number of employees. and in the u.s., and that will be positive for the u.s. it will be specifically positive for new york, where these businesses will be based.

>> and mr. katz, and then please mr. lebowitz, if you would follow up. do you see any negative impact in the united states on other industry, on other areas of job creation? do you see a negative impact where this would create a loss of jobs in the united states? outside your predicted growth? >> we have spent a great deal of time analyzing the combination of these two companies. and we believe that it's a win-win for a number of different constituencies. we believe that shareholders of this business will benefit from a stronger company. we believe that the investors, both retail and institutional, that trade stocks and derivatives on these platforms will benefit from the synergies. it will lower their costs of trading. it will lower the costs for broker/dealers to trade. and as a result, they will be

able to invest their profits into growing the business. and we believe this will be a benefit for the regulator, that oversees all of these different exchange. and we can work together with them to help grow this business. and work together with the global regulators, to harmonize some of the policies and rules and processes. and it will help the regulators grow. so we don't see the negative. we're very excited about the opportunity to move forward. and put these two businesses together. we think that it's going to be extremely positive both for the u.s. and for europe. >> mr. lebowitz, do you concur? >> yeah, i think that was very well put. i think the added, this is largely impacting europe is that we think putting these derivative exchange together will help free up capital that's badly need by banks because of

margin requirements. but in general, this should lower costs for our customers. and that should get passed on to investors. >> i'm going to ask you what an old mentor of mine did when i was in industry. when i went to him, with a great idea. at least what i thought was a great idea. i was able to sit down and state out the logically, the way you are very adequately doing here. but let's play devil's advocate for a moment. what is, if there is any, down side to this? >> honestly, i have a hard time finding a down side, sir. i'm not sure where i'd find it. i think it's very exciting opportunity. >> mr. katz? i'm going to take a stab at this. you agree? >> well i agree, i would say that the down side is not allowing this to move forward. and that will weaken the u.s. it will weaken the financial centers in new york and in

frankfurt. and that will affect the employees, that will affect shareholders. and that will the investors in the u.s. market far greater than anything else. >> thank you very much, gentlemen, i yield back. >> i thank the gentleman, the gentleman from new york, mr. radler is recognized for five minutes. >> i appreciate you holding a second hearing and the witnesses coming back today and sharing their views. now this topic we're discussing today, the role of the new york stock exchange plays in the national global economy is the merger with the european exchange means for these economies is of particular significance for my district as many of you know i represent the financial center of our country, which resides in lower manhattan. and long-term stability and ability for growth of these institutions is important for all of us. but particularly for my district. mr. lebowitz, in your testimony you said that the new york stock exchange is continually had to

meet challenges presented by other mergers. in the creation of new exchange through diversifying and globalizing, because otherwise, the nyse would have been as you say, doomed to become a charming but irrelevant anachronism. >> and you say that the merger with deutsche boerse is meeting challenges for diversifying globalizing. what does the future of the new york stock exchange look like without the merger with db? >> well i think that the business that the new york stock exchange is in, is the most competitive aspect of the securities exchange businesses. and it is more and more challenged. and i think to fortify it and gain more scale and more efficiency and help innovation, this merger is a strong fortifier. without that, we just face more competition and it's harder and harder to maintain the floor and do the things that we do, that keep our brand strong. >> you say it would be harder to maintain the floor. can you guarantee the trading floor will remain open? >> the trading floor is

remaining open. >> how long can you keep that guarantee for? >> well i'm in charge of it. so i am guaranteeing it. >> let me ask you the following. a merger of this magnitude has ripple effects for the various players along the chains. what do you think this merger means for companies small and large, looking for exchange in which to take their businesses public? what does it mean for investors? >> sure. >> they have fewer options? more options? >> no, i think the same number of options will be a stronger platform. we are an advocate. a lot of people think of us as the large-cap stock exchange. the reality is we have an awful lot of companies that are below $1 billion and below $500 million and even smaller. and we've been an advocate for small and mid-sized companies, because we think they are the engines of job growth. and it's very important that we maintain a strong presence in washington on their behalf. and i think that's going to continue in the future. >> a strong presence in

washington? what do you mean by that? >> in washington, in terms of advocating on behalf of policies that help small businesses. whether it's with regulators, such as the s.e.c., whether it's with congress in terms of other, other laws. making it clear that the voice of small businesses gets heard. >> so you regard one of your roles as a lobbyist for small businesses? >> not a lobbyist. i think we're an honest broker. meaning we're not paid by anyone to do that. we are an advocate in certain aspects. because i think when companies go public, they create more jobs than during any other point in their life cycle. and if what we're trying to do is create jobs, we need companies to get to the point of being healthy enough to go public. that doesn't mean companies should go public before they're ready and if they're just based on an idea, not a real business. but it means we need to find ways to get companies public that are deserving to be public. because that's how they get the currency, to hire more people, to grow, to innovate and to continue to develop.

>> five years ago, the company owned by the united arab emirates attempted to purchase the port operations at the port of new york and new jersey. at that time, a lot of elected officials, myself included, raised national security concerns about selling a critical port to a foreign entity. i understand, the circumstances surrounding the proposed sale of nyse to db or the merger, are different, but the sentiment remains. what are the consequences of selling a critical player in our national economy it a foreign country? how does this benefit us or potentially hurt us? >> sure. sure. first i want to, it's a good opportunity to make the difference between this and the dubai port situation. first, the germans aren't buying anything. the german government. they're not involved. this is not a government situation. this is one public company to another. common shareholders, as we said, there are more u.s. shareholders of deutsche boerse than any

other nationality. so first, there's no foreign government involvement. second, it's not a physical security point issue like a port. third, this still falls under the same u.s. regulators, as it did before. whether it's tax law, whether it's security law. whether it's cybersecurity, all of those things are all governed by u.s. law. and so that this does not fall into the same domain. >> you think that -- this would result in more trades being carried out in new york, rather in the united states and otherwise, a as opposed to migrating to europe? >> i think it will make us stronger and allow us to retain more companies. >> thank you. my last question is a very simple question, a verron yant of a questivariant of a questio was asked before. who could this committee invite to give us a contrary view? in other words, we have two witnesses, both of them are saying this is a wonderful thing. if we wanted to hear the other side, assuming there is another

side, who could we invite who is responsible to give us the case against this. you said there's nobody really. but -- >> i'm sure our competitors aren't thrilled. >> and that's the only suggestion you would have, are the competitors? >> i think all businesses have competitors. >> if the gentleman will yield, one of their competitors was offered an opportunity to testify and declined. >> if i could continue, the comments that have been made by the competitors and the largest ones that we deal with to date. have all indicated that this will not change how they compete with us. they will compete vigorously with this combined entity. and so, while given an opportunity to be invited before this subcommittee to take a pot shot, i can imagine that they would. but they have publicly been on record, saying that this will not change how they come in

every day and try to compete to provide the best possible services to their customers to compete with the deutsche boerse group and nyse separately or together. >> but your competitors aside, there's no group, consumer group, public interest group that you know of that thinks that might give us a contrary view? that's a high testimony. thank you. >> i thank the gentleman. the gentleman from north carolina, the ranking member, is recognized. >> thank you, mr. chairman. and i thank the witnesses and probably everybody else, sense that my perspective on this may be a little bit different in the sense that -- am i buzzing? i am buzzing. in sense that i'm not sure exactly what the role of our

judiciary committee -- >> it's a conspiracy. >> it's a conspiracy. maybe i should, maybe i should get rid of all my electronic devices. are you y'all buzzing me back there? what am i doing wrong? you don't know. okay. [ laughter ] >> woooo. >> okay, well i'll just, i'll be haunted for the rest of the day. anyway, it never has been quite clear to me what the role of this committee, judiciary or subcommittee should be in a merger of this kind.

but i want to leave anybody with the impression that i think this merger shouldn't be thoroughly scrutinized. i just think that we passed a law, we know what the antitrust laws are. we know what the consumer protection laws are. and if, and we've given that responsibility to somebody else. and so i'm actually more concerned about the ability of the relevant regulators or justice department or whoever is going to scrutinize this, their ability to scrutinize it from the perspective that we want it scrutinized from. so let me ask a couple of questions along those lines. we always concerned about whether the department of justice, which is a legal entity, has the expertise to

really understand the competition aspects of various businesses. what role does the securities and exchange commission play with the department of justice, in this evaluation? mr. lebowitz, or whichever one of you feels like you're best equipped to answer that. >> sure. i'll start and then mr. katz can chime in here. in this case, the s.e.c. provides a consultative and advisory role. answering questions as to how the industry functions and what the s.e.c.'s role is in regulating the industry. and how they, that would affect the resulting competition. so the doj leads the investigation, asks a lot of questions, gathers information. >> and they're the ones that actually make the final decision about whether this is anti-competitive, antitrust implications. but they get input from the securities and exchange commission.

and you said that you were submitting a bunch of paperwork and answering a bunch of questions from various agencies. 30, 40 you said. in response to mr. conyers question. do any of those agencies do -- what are you submitting to them and under what authority are they asking you for information? >> sure. each of our regulators wants to make sure particularly when there's cross-border or cross-country aspects going on, that the proper regulation is maintained. so for example, there's the anti-competition authority in europe. there's each of the country regulators for each of our exchange in europe. we have a paris exchange, brussels, amsterdam, et cetera. >> i want to focus on the u.s. entities, the regulators within the united states.

you mentioned cftc, the s.e.c., you mentioned the fed. is the ftc involved? >> not to my knowledge, the ftc. >> what other agencies -- >> the sythes committee. we're voluntarily filing. >> anybody else that you can identify that you're submitting information to? >> i just didn't hear you say justice department. >> well we said doj at the outset. they're the big, big enchilada here, they make the final decision. what i'm not clear on is what these other agencies, what their role is. what is, let's just go one by one. s.e.c., obviously provides expertise to the department of justice. but do they have another role

with reference specifically to the new york stock exchange? are you submitting information to them and are they reviewing it? and for what purposes are they reviewing it? >> yeah. they work with the foreign regulators in europe to make sure that the division of labor and there's an m.o.u. between. for example, s.e.c. and the college of regulators, even for existing exchange. it has to do with rules for exchanging information when there are investigations. that are cross-border because we have different exchange and different companies listing in each place and cross-listing for example. we have companies that are listed in both places and so on. so it has to do with exchange of information and the way the rules are promulgated between the territories. >> okay. and if they found for some reason that this merger violated those exchange, what would be their recourse?

>> it's not -- >> or made it more difficult to for them to, to police what they are involved in, what would be their recourse? >> it's my understanding that they can compel us to enter into get, enter into agreements to allow the right kinds of information-sharing and regulatory oversight. >> okay. what about the cftc? what -- you mentioned them specifically. what, what would they be looking at? what would you submit to them to evaluate? >> i think all they really want to do is make sure that this merger does not impact nyse life u.s. which is our futures exchange in the united states. and that there's no ill effects or of this in terms of the regulatory oversight. >> and if they found that it did, what would be their recourse? >> they would, they would compel us to take the actions required that would give them satisfaction. >> such as?

>> either information barriers or oversight boards or procedures that would make them feel that their interests were protected. >> okay. you mentioned the fed. the federal reserve. what, what would you be submitting to the federal reserve? and for what purpose? >> so they have, they have oversight, partial oversight over the clearing house, nypc, a joint venture between us and dtc and they would make sure there's nothing about this merger that would cause a problem for nypc. in the case of cftc and the fed, there's no reason to believe that there should be an impact, given that these are businesses that we're operating ourselves as they are i think they'll probably just validate that there's no change for them. >> and would the department of justice have access to all of the information from the cftc, the -- you've already established the consulting with the s.e.c. what about fed and sytheus?

>> not familiar with how those information barriers work. hang on. >> sorry -- >> we voluntarily provide that information to all of you. >> get us that information so we understand exactly how, what kind review this gets. because in the final analysis, i mean we can, we can educate ourselves about it. but, the primary role, i think we have is if we, if there are, if there are gaps in the review and the regulatory framework, for evaluating a merger of this kind, we need to know that. so we can close those gaps. and maybe we can't close them for this particular transaction. but we need to know it, you know, i agree with mr. conyers, there will be people behind you

probably the reason they don't want to testify is they want to merge next. they don't want to say this is terrible thing for you to be merging because they don't want you to say it's a terrible thing for them to be mernl ingmernlin. >> it needs to be reviewed from a number of different perspectives and we need confidence that the perspectives from which it is getting reviewed. are thorough. and comprehensive. and we don't, we can't exercise that kind of control over the european regulators. i mean you can lock up 80% of the derivatives market over there. and if they said it was okay, i mean nothing we could do to the european regulators.

but we could do something and a lot of this stuff is off the anti- the potential anti-competitive part of what is being reviewed. as i understand it. is offshore, isn't that right? >> that's correct. >> yeah. because it's in -- the derivatives market, and whatever that other thing i mentioned in my opening statement. i got it somewhere. i should know better than to try to talk about this without thinking through it more. but what about sytheus? what are you giving to them and for what purpose? and under what circumstances would they have the authority to say this is a terrible thing? >> sure. well first, we voluntarily filed with sytheus.

it's not clear whether we would have been compelled to. we felt that in this case, given the high profile of our merger and some of the emotions it's raised up, that we should go through that process, we met with the committee, we've answered their concerns and submitted significant amount of information. i think the focus is obviously on physical security. on regulatory, just to make sure that it's all covered. and also on cyberand othkricybe of national security. >> thank you. >> i think this line of inquiry has been very interesting. it prompts me to wonder whether after this is completed or some other merger acquisition that's already taken place, whether we might find it helpful to call in the various regulatory agencies and question them about what they have already done, as opposed to what is going on. where they don't testify. because they're in the middle of doing it. so i thank the gentleman. i thank our witnesses for their

very helpful testimony today. and without objection, all members will have five legislative days to submit to the chair additional questions to the witnesses which we will forward and ask the witnesses respond as promptly as they can. so that their answers will be made part of the record. without objection, all members will have five legislative days to submit additional materials for inclusion in the record and this hearing of the subcommittee is adjourned.

[inaudible conversations]

president obama talked of a program for 10,000 new american engineers every year. he made this announcement at the

cree light in the manufacturing company. he visited in 2008 during the first presidential campaign. this is 25 minutes. [applause] >> thank you. thank you very much. thank you. [applause] thank you so much. thank you. thank you, everybody. please, everybody have a seat. good to be back in north carolina. great to be back at cree for all the employees at cree, thank you for your outstanding work and hospitality. i actually visited this plant about three years ago, still running for office. somebody in the plant showed me a picture of the two of us together. i looked so much younger then. [laughter]

but, so it's true i have a lot more gray hair now than when i visited but i have a better plan. [laughter] but it's a fair trade. that day a wonderful man gave me a heck of an introduction. he introduced himself by saying i am a pre-employee and i helped build the most energy efficient led in the world. that's what i do. in his name is david jones. [applause] where is david? there's david, right back there. [applause] >> owls you can see, david is shy and lacks enthusiasm but nevertheless, so, i got to see david looking at the new production line, which she now runs by the way and it's easy to

see what you are proud of what you do. this company has made amazing progress, and the technology that this company is growing in leaps and bounds. in fact, as i was talking to chuck here cree come he was explaining just since my last visit, to more efficient have they become? double inefficiency just in my last visit three years ago. [applause] just in my visit three years ago. so today the small business that a group of the state engineering students found almost 25 years ago is a global company. next month your new production line will be running 24/7 and you have another 400 square feet of space on a new site next

door. so you are helping lead a clean energy revolution, you are helping lead the comeback of american manufacturing. [applause] >> this is a company the future will be one. so david was telling the truth when he said how great it is to work here and how grateful she is for the opportunity that it provides. but i also remember something else david said that day. he talked about how even with a good job and a great company it was getting tougher for working people to provide for the families without having to cut corners. what it said was where and by squeezing a balloon to make sure my family has flight, that we are moving forward and progressing. now that was in the 2008, before

the financial crisis, before the bottom fell out of the economy. before a officious recession that made things that much tougher for working families. so, the world has changed since the first time david and i met, and for a lot of our friends and neighbors that change has been paid. today the single most economic problem that we face is getting people back to work. we stabilized the economy and provide a financial meltdown and an economy that was shrinking is now growing. we've added more than 2 million private sector jobs over the last 15 months alone. [applause] but i am still not satisfied. i will not be satisfied until everyone who wants a good job that offers some security has a good job that of first security. [applause] i won't be satisfied until the

towns are open for business again. i won't be satisfied until working families feel like they are moving forward again that they are progressing again. that's what drives me every day when i walk down to the oval office. you, your families, your jobs, your dreams and everything that it takes to reach those streams. our economic challenges were years in the making. and it will take years to get back to where we need to be. but for all the hits we have taken we are still americans. we've got the largest economy in the world, the best workers in the world, the finest universities in the world, the most successful companies in the world. we have got everything we need to help our workers adapt and held our fellow americans through the stuff period but it's going to take all of us working together.

the private sector, government, not for profit from academia and that is what i came back to cree to talk about today. i brought some folks with me. i travel with a bigger entourage these days than i did years ago. so the group by rot today is a group called the council on jobs and competitors. these are leaders who have decades of experience in running some of america's best businesses creating jobs, understanding what it takes to grow the economy and strengthen our middle class. they come from the business sector but also labor, universities, most importantly to come from outside washington, and they've decided to dedicate their time and energy to the cingular test, how do we create more jobs in america? and by the way, we put this

together many months ago, not in response to the one jobs report but we understood even though the economy was growing, it wasn't growing as fast as we want, and it wasn't producing as many jobs as we want so i told them i want to hear every smart, forward thinking idea that they had to quicken the pace of job growth and make sure our economy and workers can adapt to changing times so we had an opportunity to meet backstage to talk about how we get our job creation engine running faster. i want to highlight a couple of their ideas that apply to companies like this, companies like cree. the event manufacturing you do year requires skilled workers and you're lucky you got excellent schools nearby like north carolina state and duke -- don't to worry, i'm not forgetting duke.

every time i come here there is some acc thing, but i've got to work through. [laughter] [applause] so, but because you've got these great schools you can hold your own. not just in basketball when it comes to highly skilled workers, and public schools that strengthen that pipeline by forming a school of engineering at sutphen high school which celebrated its first graduating class last week and we are so pleased with that because we want more engineers in america. here's why this is so important. right now there are more than four job-seekers for every job opening in america. when it comes to science and high-tech fields, the opposite is true. the businesses represented here tell me they are having a hard time finding high skilled

workers to fill their job openings. that is because 14% fall undergraduate students enrolled in what we call the stem subjects, science, technology, engineering and math. of those students, one third will switch out of those fields coming in only about two in five will graduate with a degree or certification within six years. so, these are the jobs of the future, these are the jobs china and india, those students are hungry because they understand if they get those skills they can find a good job, they can create companies and businesses, and wealth and in the very fields we know are going to be our future. so we can do better than that. we must do better than that if we are going to make sure the good jobs of tomorrow stay here in america, stay here in north

carolina we have to make sure all our companies have a steady stream of skilled workers to draw from. so last year, in pursuit of this goal we brought together companies and community colleges to forge pipelines directly from the classroom to the office or the factory floor helping workers find better jobs and companies find the right workers. last week we announced new commencement by the private sector as well as colleges and the national association of manufacturers to make it possible for 500,000 community college students to earn industry accepted credentials for manufacturing jobs that companies across america are looking to fill so what happens here now is businesses and trade organizations are going into the colleges hoping to design the training for the specific jobs they know are going to be available in some cases providing the equipment to help

those students trained. the students say you know what, if i do well here i know i'm going to have a job. and today, with the leadership of the jobs council we are announcing an all hands on deck strategy to train 10,000 new american engineers every year. [applause] and our jobs council are doing this not counting on a bunch of federal funding. private-sector companies are teaming up to help promote stem education to offer students incentives to finish those degrees and helped universities fund those programs. they are going to double their summer internship hiding. companies like intel who is ceo is here today and is heading up

the task force for the jobs council and helping figure this out because he understands the survival depends on our ability to get a steady stream of engineers. i've been for the plant out in oregon. it's unbelievable. i pretended like i understood what they were saying the entire time. [laughter] but that is what is going to drive our competitiveness in the future. we know if we are going to maintain our leadership in technology and innovation, the best companies need the world's brightest workers, american workers. that brings me to the second idea that we discussed backstage. at cree, you're putting people back to work in a field that has a potential to create an untold number of new jobs and businesses here in america and that's clean energy. my administration invested heavily in cui manufacturing because i want to see the led

and wind panels and electric cars of tomorrow made right here in the usa. [applause] i want them made right here. [applause] we invested in this company with a tax credit that allows you to boost capacity and lower cost and how your hundreds of new workers. and with a grant from the department of energy you've made incredible breakthroughs in the technology to transmit claim renewable energy across the country more efficiently at less cost. breakthroughs like these have the potential to create new jobs in other sectors of the economy as well. so think about it. cree makes energy efficient lighting that can save businesses and consumers a lot of money, and there's a lot of buildings out there that need upgrades and a lot of workers ready to do the upgrades, construction workers were hit harder than anybody by the

recession. almost one and six construction workers are out of work and that makes no sense in a time we have so much of america that needs to be rebuilt. so this is what led us to create what we are calling the better buildings initiative, putting people back to work, doing the work america needs done, upgrading buildings for energy efficiency could save america's businesses up to $40 billion a year on their utility bills and obviously that $40 billion could be better spent growing and hiring new workers. the will boost the manufacturing of energy-efficient products like those made here at cree. kaput contractors and construction workers back on the job. it is a win win win proposition. so today the members of my job council updated me on their efforts to push this initiative in the private sector and

working closely with a champion for this kind of energy innovation, president bill clinton who was asked to co-lead the effort with them, and as we get this moving it can snowball because right now the big impediment is a lot of companies know they would save money if they had more energy efficiency but they may not have the initial capital to do it and in some cases building orders thinking to themselves if i put in this new lighting am going to be able to recover it through their rent or the leases i am able to obtain come and so what we have got here our premier experts who are going to be able to help us design this program to get this to take off. these are just two examples of the kind of work being done by the jobs council. the had all sorts of recommendations they are talking about, how do we deal with making sure our regulations make

sense so we start eliminating ones that don't work, aren't making consumers better off for improving our quality-of-life, how we make sure small businesses get financing because there's a lot of small businesses of their daughter still struggling to get capital, large businesses are doing pretty well. so they are tackling a whole host of different issues. now, their recommendations are not going to solve every problem that we face, but slowly, steadily they are helping us move forward. we are going to pursue these ideas and any good ideas out there no matter where they come from because even though this is a big country, with great diversity of opinion as you discover when you're president -- [laughter] , we won't agree with each other on everything, we can agree on some basic things. we can agree on educating our

children and training workers to be the best in the world. we should be able to investing in the research and technology that leads to new ideas and new industries. we should be able to agree on developing clean energy and manufacturing jobs that come with it. it makes sense to rebuild our infrastructure and all the jobs it can create. that's what's going to be required to grow our economy. that's what it takes to help people prosper. that's how we're going to get the future we dream about for our children and grandchildren. and the main thing i want to communicate to all of you at cree, everybody here in north carolina and across the country is we are going to get their. i know that because i have seen it here at this company where you are helping to lead the clean energy revolution. i'd seen across the midwest where auto manufacturers are

coming back and hiring again even after reading their own obituaries just two years ago. i've seen it from coast to coast when men and women are testing new ideas and starting new businesses and bringing products to market and helping america come back stronger than before. so i am optimistic about our future. we can't be complacent. we shouldn't pretend a lot of folks out there are not still struggling. but i'm absolutely optimistic that we have got everything it takes to succeed in the 21st century. americans do not respond to trials by lowering our sites were downscaling our dreams or settling for something less. we are a people who dream big even when times are tough, especially when times are tough. we are people who reach for word for lookout to the horizon and remember that together there's nothing we can't do and as long as i have the privilege of being your president, i'm going to be

right there with you every step of the the fighting for a better future in this community in north carolina and across the united states of america. thank you everybody, thank you. [applause] ♪ ♪ ♪

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♪ ♪ ♪ ?owd ?owdz ♪ ♪ >> later in the day, the president traveled to miami to attend party fundraising events. the president is spending the night in florida. ♪

♪ >> this week the national cable and television association is holding its national convention in chicago. this week, we'll show you those events.

>> earlier, agriculture secretary tom vilsack spoke at the national press club giving a preview of next week's meeting in paris. the min stores will meet to discuss how industrialized

nations might assist developing nations to improve their agriculture practices. the remarks including q q&a are about 55 minutes. [applause] >> alan, thank you very much, and thanks to all who are here today. i'll start off with a sobering statistic. today, the united nations food and agriculture organization says that 925 million people were under nourished last year, and improvement from 2009, but still unacceptably high. our goal as a nation and as an international community is clear, to bring down this number by increasing the availability and the accessibility of nutritious food around the world. now, as we look to the future, this challenge grows even more stark. the global population is on the rise and strong economic growth

in developing countries is expanding middle classes and increasing demand for agriculture products. we'll have to increase food production by 70% to feed a larger, richer global population of 9.3 billion people by the year 2050. what's more, agriculture will play a role in meeting the growing demand for energy worldwide which is expected to increase by more than 40% by 2035. the challenge of feeding a global growing population is real, and our success is not necessarily guaranteed. for producers, this is also a time of uncertainty and constraint as they confront the uncertainty of climate change and face the constraint of limited water sources. we need past approaching to solving global hunger, focusing

on food aide, is simply not enough. we have to increase both the sustain the and productivity of global agriculture so food is indeed available, accessible, and usable to people everywhere in the world. now, i strongly believe that our nation, our scientists, our policymakers, and most importantly of all, our farmers, ranchers, and producers have proven that they're up to this challenge. american farmers are the most creative and productive in the word. each acre we farm is more and more productive over the course of the last century. america's moved from farming in the 1920s and 30s to today being the world's largest food exporter. now, this evolution was not preordained. american producers embraced science in pursuit of greater

productivity. technologies emerged from the imagination, creativity, and hard work of scientists from usda, from land grant universities, and from the private sector. i would say that principle number one as we address this issue of global food security lies in innovation, arising from research and development. higher productivity need not come at the expense of conserving our natural resources. american farmers have taken steps to care for the resources. in fact, in the last 30 years alone, usda helped producers to prevent soil erosion by more than 30% and it's gone from the number one cause of soil loss to restoring land. they helped climate change and farmlands and pastures through proper conservation efforts help preserve our water resources and

clean our air. principle number two in this effort to find a solution to global food security is that it need not be and should not be at the sack figs of -- sacrifice of efforts to conserve our natural resources. two years ago, world leaders in italy committed to making sustained increased investments in agriculture development. the ministry that i'll attend next week continues to reenforce and move this agenda forward. in the two years, the focus and cooperation has been remarkable and it's mirrored here in our own u.s. government. the united states government pioneered a new coordinated approach towards working in global food security. feed the future, a presidential initiative led by the u.s. agency for international development is smarter and more

efficient because it's focusing on raising the productivity and incomes of small holder farmers through country-led strategies. it is focused on specific regions and value chains within 20 countries so that we can significantly invest in priority areas where we will bring about a comparative advantage. in bringing together the capabilities of multiple parts of the u.s. government, feed the future is also working with multilateral partners in the private and government sector as as well to build agriculture productivity, improve nutrition, and also foster regional trade. through feed the future, u.s. is also closely coordinating efforts with the usaid and usda. in times of limited resources, times are focused or core competencies. in our goal, there's three core

areas identified. innovation through collaborative research, in country capacity building like regulations, natural resource management, trade and extension, and efficient market development through information, analysis, and statistics, so the third and important principle dealing with global food security is focus on country identified needs and the core competencies of agencies as well as other developing countries and other international organizations. as we've seen for decades, innovative research is the best opportunity for game-changer results in global agriculture. research and a climate changing era works to development and improve technologies and methods for agriculture water use official sigh, soil conservation, and the land on which seeds a sewn. we are changing plant breeding

by giving us a better understand ing of stress resistant crops. we are using discoveries about genetic information to better predict and accelerate the results of breeding. selected untested lines not based on labor consuming field trials. they helped review the blueprints of a host of plants and animals including corn, soybeans, apples, pigs, turkeys, and depress with a -- grass with a great potential as a biofuel crop. we published a full genome sequence of two pathogens that cause wheat diseases that damage crops around the dploab. this work allows us to by pass generations of selected breeding and develop disease control methods to rapidly bring about

more abundant nutritious nudes to tables around -- nutritious foods to tables around the world. this also impacts the threatening challenges, the wheat steam rust known as ug99. this fungus is spreading across africa, asia, and the middle east with the potential to threaten crops that feed 1 billion people. united states is playing a key role in the effort to reduce its effect in damage. we have provided more than 14,000 lines of wheat to be screened for resistance, have plots at the kennian institute, and thanks to jen nettics, prescreening lines of wheat before sending them to field tests increasing the frequency in which kennian researchers find rust resistance in our wheat and move us closer to new ug99 resistance.

today, we're taking another step to strengthen our capacity to combat ug99. usda and u.s. aid celebrate the ground breaking of a new usdaug99 research greenhouse at the university of minnesota, a significant commitment with the government under feed the future to provide a stable grain supply worldwide. other science led us to a flood tolerant rice variety that shuts down flooding conditions, but resumes growth overwards. in conjunction with the university of california and the rice research center in the philippines, new varieties help transform the food security in the feed the future focus countries and bangladesh. in the form up last week, usda and usaid were proud to

announce, the u.s. government will support an african-led partnership focused on controlling toxins. over 145 million people consume this dangerous toxin. it's paid for by private organizations and foundations and the government. this will help us develop comprehensive regional strategies to limit the effects of this toxin on health and economic growth. other usda projects are looking at heat and drought tolerance in beans. at this time i want to take note of dr. carter's research. he and ars at the university of north carolina worked on drought resist tent beans, and he'll be acknowledged at usda. dr. carter, thank you for your continued efforts. we've had funded projects addressing vitamin a and other deficiencies that cause problems for millions of children with

new corn and potato varieties and creates specialty crops. this advanced develop holds incredible potential for sustainable production and nutrition and raising farm incomes here at home and across the globe. because of our belief in the value of agriculture, the information at the base of the work is already available publicly, and every year usda distributes at no cost over 150,000 sessions from our seed banks to researchers at home and around the globe. this research effort is not just a domestic effort. much of the best research is done in conjunction with the international partners and nonprofit funding. as tight budgets threaten this at home and abroad, it's critical we not only advocate for continued investment in this

innovation, but encourage private funding as well. i look forward to engaging with my counterparts on how to continue sustained support for critical research and innovation globally. frankly, research ray loan will not feed the world. people will. farmers and ranchers and the chapes of individuals who help prepare food will as well. to meet future challenges, we must help farmers adopt the latest seed technology, improve irrigation systems for land and animal management techniques, help them apply fertilizers and herbicides if need be and regulate the safety of their food systems and engaming in the global trading systems so the food supply can reach the demand. it must be country led and country given and focused at the

local and community level. we want to engage small holder farmers and villages to learn their ideas about developing their agriculture sector so that we can help them with the technologies, techniques, and crops that fit their culture and lifestyle. our focus must also reflect an understanding of the role of women in farming who account between 60%-80% of food production in most developing countries. chris, i want to take this opportunity to thank land o' lakes for your participation because that's having a profound impact and effect for folks not only in that country, but across africa. while we improve productivity, we have to ensure food makes it from the farms to the mouths in need, help communities and nations build safer water systems, post harvest infrastructure like roads and cold storage, have to continue

to ensure food safety, and encourage vibrant local markets with transparent information and improved financial services. national and regional governments have a role to play in this effort. in the united states, our land grant universities and extension agents helped producers practice successful farming management and marketing and helped them form cooperatives. the usda foreign agriculture service engages with ministries of agriculture in over 150 countries around the world to enable trade to support policies based on sound science and help sound management practices in less developed countries. today through feed the future initiative, we're focused on building capacity in countries like bangladesh, haiti, ghana, tanzania, africa, and central america. these regions were selected because the strength of their political institutions and

vision for confronting hunger, and they all committed to increasing their own investment in agriculture so our investments generate leverage. ghana loses 30% of its grain supply because of inadequate storage and handling facilities. to help tackle this challenge, usda is collaborating with specialists to develop and deliver a series of training and capacity building programs to improve storage systems on and off the farm to minimize moisture losses. our own fellowship programs expose our international counterparts to innovation. at the same time, it supports human capacity that underpins our growth. for example, in kenya, the foundation helped the inspector

service adopt a port of entry inspection system similar to what we use here in the united states providing direct benefits to the kenyan economy. as kenya has been trained but the usda program teaching risk procedures and assessments to government agriculture officers at other east african nations. u.s. food aide programs are driving agriculture productivity. increases in raising the incomes of farmers. this year alone, they'll benefit more than 5.2 million people in the developing world. our food for progress programs in guatemala and tanzania build cooperatives, support extension, linking producers with buyers, and increasing market information and developing financial systems. the program invests in the

future by increasing school attendance, literacy, and food availability for children. this is occurring in over 30 countries around the world. we're also at the same time building capacity to design, manage, and fund sustainable national safety net systems like the one we have in the united states with our snap program and school lunch program that have been so successful in america. as we worked to develop agriculture economies, we have to remember the sound grulgt policies here in the united states and in other g20 countries and in the developing world. they are founded on good information. that's why another priority for food security, which i look forward to discussing with my counterparts next week, must be increasing transparency in agriculture systems. that means establishing data collection, information, and regulatory systems so that nations can make informed decisions to establish sound policies, respond to change in food supplies, and reap the many

benefits of agriculture trade. the united states supports the u.n.'s efforts to improve global agriculture statistics to provide accurate and timely market information and forecasts, and we support in country efforts to improve data collection and analysis in many countries. we're also working to bolster here in the u.s. national agriculture data assistance and institutions in the feed the future nations so that countries can carry out their own food security assessment, monitor and analyze functions in their own country. in nigeria, usda is helping with a pilot project to improve sampling methods and data collection techniques, and in places like guatemala, supporting systems so that farmers there can make informed decisions. as these new capabilities and systems take hold around the world, we believe that there's less waste and fewer hung gri

people, but we can mitigate and respond to crop failures and father and famines. countries can make more informed agricultural choices as we watch a substantial increase with global commodity praises for the second time in the last few years, and it's a good reminding in embracing transparency and the free movement of food supplies. these measures get food to the people who need it most and help smooth price spikes. the bottom line is with transparent systems in place farmers around the world from central america to large rogue operations here in america will be able to respond to changing markets and grow what is most profitable for their families and most needed by their neighbors, their country, and the globe. the policies adopted by the international community are critical to creating a successful environment to collectively meeting the challenge before us. at the g20 meeting next week,

we'll establish priorities, agree on ways to the effectiveness of global systems, information, and investments. i think it's significant that the g20 leaders have singled out the importance of food security and grappling together with how to address the problems of high food prices. i know they are interested in long-term solutions, and i'm hopeful there's constructive conversations about additional thoughts on meeting the growing demand for food over time. i'll head to g20 optimistic about what can be accomplished and committed to the role of innovation and improved nutrition around the world. in the end, progress on the issues is also good for us here in america. it means improved economic opportunities as developing nations grow economically and engage forcely in global trade systems, and it means more

stable nations and fewer threats to our national security. working to eliminate food and security across the globe through innovation, hard work, and partnerships will provide incredible economic benefits and natural resource enhancements to developing and developed countries alike, increase political stability in conflict and poverty stricken regions, and put countries around the world in our global community on a path to global prosperity. agriculture's role goes beyond feeding and clothing the world. producers are increasingly called on to help provide ru newble -- renewable sources of energy as well. here in the united states, looking at biofuels in particular to provide sustainable energy supplies generates economic growth in rural communities. in some cases, the same goals can be method by biofuel's production in the rest of the world. as the food security project has

shown, bioenergy production and use in the developing world is not automatically good or bad. instead, when managed carefully concerning not only energy needs, but environmental needs, economic growth, and food security, bioenergy promotes food and energy security by driving investments and increasing incomes in rural areas. to help developing countries reach the right balance, the partnership recently announced a set of measurements and tools to promote the production and use of bioenergy as a way of encouraging sustainable development. this is a clear reminder that we have to move beyond the all too common debate which pits food against fuel and figure out how to meet both challenges, energy security, and food security. the truth of the matter is that corn-based ethanol does not deserve the scapegoat reputation folks assign to it. in the great run up of food and

commodity prices in 2007 and 2008, american by yo fuel production contributed to 10% of food prices. combating hunger and feeding the world, particularly the world's children is one of the great challenges of our day. giving the child the opportunity for a brighter, more productive future affects not only that child, but the community where that child is raised, the country where he or she lives, and the entire world. this is a moral issue, and we are proud to be engaged in work that gives children and their families around the world an opportunity to follow their dreams. thank you. [applause] >> thank you for your time. there's no shortage of

questions, but please feel free to submit more. first question, on the discussions you'll have in the next coupling weeks with other ministers, do you think that europe and the united states will agree at some point to reduce agricultural subsidies enough to satisfy china and india and enable a restart? >> you know, i think the challenge with dohau is not the lack of willingness to the support structure and systems. i think it's obvious in our fiscal condition and circumstances that's likely to happen. the problem is that there's not a cor responding willingness on china and india to be definite and concrete on how open their markets will be. as we look at rounds and any trade agreement, we want to be sure it's fair and balanced. we can quantify with great specifity what we are willing to do with our support structures and systems. we need the same specificity from china, india, brazil, and

other countries in terms of how open their markets will be to ensure we're getting a fair deal. >> one of the paradoxes of booming u.s. exports is that some of the most food import dependent nations are the ones with the greatest food insecurity, they have import prices and when there's price spikes, they bear the brunt because of their own lack of a crop. how do you balance your charge really as secretary of agriculture to help boost u.s. exports, at the same time, some of the poorest nations need to become less dependent on those exports. >> well, i think first and foremost we're interested in making sure the developing countries are able to create rural economies that are strong and can provide greater financial benefit to those who live in the rural areas. i won't forget for quite some time visiting a farmer in kenya

growing both corn and beans virtually in the same place on his farm at the same time. his theory, roger, was that beans would provide the nitrogen to allow the corn that emerges later to be better. we tried to convince him that rotating those crops would be more effective, increase yields, and allow him to buy another cow to create surplus and he could then expand his operation. it's not about imports and exports as it is making sure the productivity of the countries are maximized and folks understand how to best expand their operations. at the same time, i think it's important for americans to recognize that our rural areas of this country have suffered for an extended period of time. 90% of the poverty counties in the country are not urban centers, but rural counties. the per capita income difference from rural america to elsewhere

is about $11,000 per person. it's important and necessary for us to look at ways to create economic opportunity in our own country, at the same time, there's a consolidation of farms to the point that now less than one tenth of 1% of americans produce 85% of the food that we consume so as we look at strategies to embrace and to enhance economic development in rural areas, we have to understand that we have to have strategies for helping small landholders in the u.s. who might benefit from local and regional food systems or who might benefit from having an opportunity to be part of a co-op producing biofuel. at the same time, we have to continue to allow the commercial-sized operations providing a good part of our food an opportunity for prosperity. that's a come by nailings of meeting our needs and using the excess, if you will, to provide export opportunities. i honestly think we can balance this properly, and with the demand on the food and energy side, i think there's more than

enough opportunity for folks in developing countries to emerge and expand their operations, and at the same time allow the united states to continue export, continue to look at ways to produce other kinds of products with our crops in addition to food and food. >> you spoke in your address several times about government initiatives to boost agriculture especially in subsaherra africa. these pledges can be lacking with budget cutting. how much can governments be expected to accomplish in the fight against food and security? >> well, the g20 nations have made a significant commitment, the united states committing $3.5 billion above and beyond our food aide stance. we made good on roughly $#.5 billion -- $2.5 billion of the $3.5 billion. this is an opportunity to focus

on the difference between reducing budgets in order to get control of the deficit circumstance and recognizing an additional strategy is growing the economy and investing in the future. there has to be a balance, and there are opportunities here for us to develop a stronger relationship with other countries, to create stronger middle classes in other countries that in turn create demand for products that the united states can produce both agriculture and otherwise, and as i said earlier, it provides greater political stability in those countries that means we have less threats to attend to from a national security perspective which should allow us to take a look at our priorities, our budget priorities so we would be foolish to reduce our commitment to global food security because if we think we have concerns and challenges today from a national security perspective, wait until we have more serious food shortages and water shortages

around the globe. at that point, we'll see how expensive it can be. we are much better off investing now in expanding systems and encouraging development in the developing countries to be sure they use their agriculture to the fullest extent possible in their countries. >> following on that, a question from an e-mail. are you concerned that the european unions antigmo anti-pesticide stance is exporting hunger? >> you know, i think there's a need for us to continue the dialogue and conversation with our euro partners in terms of the strategies that will work to address global food security. i don't think there's any question that we can't turn our back on science. this is a significant challenge when you think about increasing food production by 70% when the amount of land available for producing crops is not going to grow and likely to shrink with

expanding cities and communities. what are you going to do? you have to figure out how to do more with less. the only way you do that is to figure out ways you can use land that's not productive and make it productive or use land that's productive and make it more productive. that's what we have found in the united states. in the 190s, we were are sub sis tense farming country. if you didn't grow it, people didn't eat. in 50 years we've gone from that point to the place where we're the largest export. why is that? because farmers embraced science and new technologies. initially, there was reluctance at the notion of hybred seeds and tractors. over time, we overcame the concerns, took the risk, and found enormous benefit. i think the same thing has to hold true in other parts of the world.

there has to be a greater embracing of science, a process by which folks commit themselves to a regulatory system based on sound science, and we have to obviously get away from some of the parochial views we've had. we're seeing that happening in the united states of the there's a discussion now about our subsidy system which i think is healthy. we're going to continue to see more of that, i think, as we try to confront this major challenge that we in this case as a -- face as a globe. this is not one country's responsibility, but the entire globe's responsibility so it's very, very important for people to have an open mind and to take a look at science, and i think we're beginning 20 see, particularly in the eastern european countries, a greater acceptance of the science, and i think that's ultimately going to lead to greater embracing. >> the journalist, hl menkin, once said for every complex

problem there's a solution that's simple, need, and wrong. [laughter] what are simple neat solutions to the problem of food security that you see as wrong? >> well, one solution is some countries have decided to sort of rain in and take the position that they're going to limit the capacity to export, and they develop bans an exporting commodities which in turn distorts the market, creates a potential for higher cost than would otherwise occur. i think at the time when there are difficulties, the initial reaction i think of folks is to sort of look up ward, -- inward, to try to hang on to what you have, and i think that's precisely the opposite of what we should be doing. this is a tremendous challenge, but a great opportunity for us in the united states to develop relationships if we are willing to look outward.

the same thing ought to be true for other countries, particularly some of the major players. major plays consider export bans, as i said earlier, distorts the market and makes it difficult for the rest of us to have the transparency, the market information necessary to properly price and properly forecast and properly estimate the status of food which in turn makes it harder for the developing countries rather than easier so that would be one example. >> we have several questions about food safety and the e. coli scare in germany. in the wake of the e. coli scare in germany, how important is exploring the strains in the united states? there's a proposal before omb. how important is it that that proposal advance? >> well, i think this is another important question. i think americans deserve to have a safe food supply? we have been fortunate, i think, on balance of having a

relatively safe food supply, but until we do not have a single incident of contamination, a single incident of people getting sick, or unfortunately and tragically dying, we still have work to do. that's why i think it is important for us to take a look at ways to continue to focus on a prevention effort. that means for us as we learn more about e. coli, as we learn more about strands that cause problems, we ought to be willing to step forward and begin the process of testing to be sure we can prevent illnesses and diseases rather than responding to them. i think what's happened in europe is a wakeup call. it requires us to be continually vigilant about food safety. it's an every day responsibility, and if you relax for a moment, it can cause devastating consequences. our hope is that we work with the industry which is just as interested as usda is, the

government is in having a safe food supply because they are concerned as we are of the safety of individuals. >> would the u.s. be better off with a single food inspection agency, why and why not? in the current budget discussion, of course, house ag appropriations is on the floor this week, what proposed cuts to the fda budget and other measures have on the safety of the u.s. food supply? >> well, i would just point out at least relating to usda, our food safety inspection system looking at meat and powell ri and processed eggs, most the budget is people. some parts of usda's budget we talk about programs, assistance to local programs and farmers, but in the food safety rain, it's inspectors, people responsible who make sure the food we eat is as save as can

be. when you reduce your commitment to food safety and the budget of food safety, you impact a number of people responsible for food safety which makes it that much more difficult. we're going to continue to work, continue to do the best job we can. we are challenged to look at the processes, ways to do more with less, ways to be more efficient and more effective with food safety? are there inspection processes and systems that would be better? if so, we are now challenged to look at those things very carefully and to embrace them. you know, the reality is it's still 325,000 people in this country get sick every year from a food related illness. that's far too many, and there's a consequence to that. there are health care expenses that are consequences, loss of productivity as a consequence, and tragically and unfortunately 5,000 people die. we need to continue to work on this. we need to continue to improve our safety systems.

it doesn't necessarily matter whether you've got one system or one department or two departments or multiple departments as long as those departments have the same philosophy and same approach. when i came into office, the president instructed me and kathleen at health and human services to look at how we can improve food safety. we put together a food working group, and what we found was the need for usaid and usda to have the same preventative philosophy, not a mitigation philosophy. if the act is properly supported, you'll see fda have much more of a preventative focus, similar to what usda has been doing for some time. i believe that singular focus is the best thing we can do today to ensure a safer food supply. >> this audience member asks, 70% of all antiby yachtics

abused in the u.s. goes to farm animals. why can't the usda do more about this? >> the simple answer is and the bureaucratic answer is that's the responsibility of the fda? [laughter] >> they can be wrong. [laughter] >> well, i would never acknowledge that fda is wrong. [laughter] having said that, i think it is important for usda to work with farm groups and those representing a care about agriculture to be sure what we talk about when we talk about antiby yachtics is the use and appropriate use of anti antibioctoberrics. we have continued work to do, and we are continuing to work with the owners it's their best

interest to use antibiotics. working with farm groups will continue to improve on that. >> the united states is the world's largest producer and exporter of ethanol. after 30 years of tax credits and trade production, does ethanol need the subsidies, and can the federal government even afford them in >> well, what we found out when we reduced or eliminated subsidies too quickly, we find out there's an unintended consequence that production capacity is compromised and ultimately jobs are lost. at a time in the country where we need more people working, not fewer people, we have to be careful what we do relative to the support of the biofuel industry. they are directly or indirectly i'm told over 400,000 folks employed in that industry. when the biodiesel tax credit was allowed to expire a year ago or so, 50% of capacity ended

immediately and 12,000 jobs were lost. i'll remind you of the circumstances in rural america where unemployment levels have historically been a lot higher than in any other parts of the country and poverty rates higher. if we're going to address that inbalance in the economy, we need new opportunities and al tern tiffs for job growth and income growth in rural areas. if we're to meet the president's challenge of reducing our reliance on foreign oil by a third, we're going to need a robust biofuel industry. to do that, we have to move away from corn-based ethanol that everybody recognizes and that we're doing. usda is sponsors a variety of alternative feed stacks from grasses and algae and others to create new supplies and new ways to produce ethanol. at the same time, we have to make ethanol more readily available making sure our

pumping and distribution systems are throughout the united states that make it convenient for consumers. if we had not had an ethanol industry, if we could just sort of wave a wand and the entire industry leaves the country, everyone would pay on average 90 cents a gallon more on their gas. it gives a sense of competition and innovation, gives an opportunity for job growth and an opportunity for rural communities. when we reach the 36 billion gallon threshold that congress set at where we need to be within the next decade or so, we'll reduce our relicense on foreign oil by about 17% which just happens to be the percentage we import from middle eastern countries, an area of the world that's unstable, and that reflected itself at the cost at the pump. if we want to stabilize that cost and energy costs in the country, provide more economic

opportunity, then we have to have a robust commitment to biofuels. does that mean continuing subsidies forever? no. does it mean that they have to be continued until we reach the 36 billion gallons? no. i think we have to be very careful about the way in which we go about reducing those subsidies, and i think the time has come to redirect some of that support towards helping the industry provide more convenient supply and een couraging detroit -- encouraging detroit to consider the small investment of $100-$150 per car to be flexible fuel vehicles. if we increase that percentage significantly, it provides additional market opportunitiesment one other thing about this industry. there's a national security imperative here. the navy signed an mou with the usda to work towards producing 50% of its fuel needs in

biofuel. why? because it's not comfortable meeting our national security needs by relying on unstable sources of oil. they prefer relying on our own capacities within the united states, so while i understand people's desire and understand the need for us to be fiscally responsible, let me say that we don't want to cut our way out of a growth opportunity. there are a million jobs at stake here potentially as we expand the industry, and over $100 billion in capital investment soarly needed in rural areas so get more economic activity in those areas so i think we have to be very careful about that. >> okay, following up on that. you have a three-legged stool, 45 #% blenders credit, a 54 sent tariff on ethanol imports from brazil, and then you got a mandate, 13.2 million gallons of

corn ethanol this year rising to 15 million. you have a mandate that requires more than 13 billion, and i think last year's production was what, 13.6? when you're looking at that, why can you not simply get by with the mandate that requires about the same sort of production level and save taxpayers $5.7 billion and -- >> first of all -- >> i covered this. [laughter] >> yeah, you did. [laughter] you have to be careful about the savings to the taxpayer because if you compromise the jobs currently in the industry to the extent you compromise the capital investment already made, you may see a loss of revenue as a result of job losses. you have to be careful in terms of numbers you use. it's clear that the tariff with brazil is phased out over a period of time. brazil has their own

difficulties meeting their own needs and had to reduce ethanol in their vehicles because of challenges they had with their own production processes. the reason why you need assistance and help is because you're bumping up the thing you didn't mention in your question which is the 15 billion gallon threshold that corn ethanol is tapped out at in the fuel standard meaning the next 21 billion gallons come from something else other than corn based. you have to work to a point where they are sufficiently produced and they need help and assistance to get there. again, the benefits to the country of more jobs in rural america, more capital investment in rural america, stronger bottom lines for producers, alternatives to use nonproductive land more productively, opportunities for new innovations to occur, also by-products that occur that help

the livestock industry and other businesses, tremendous opportunities there, and there is also a trade component to this so, you know, i think you just have to be careful in terms of this debate that we don't limit our capacity to grow our way out of a deficit. usda has done a good job so far in terms of responding to the deficit. we knocked out $4 billion of the crop insurance cost and applied that to the deficit reduction last year. it was passed by congress, hit usda about as hard as any department, and the house is considering another 13% on top of that. we are helping, but i think i'm very concerned that we're going to limit our capacity to grow our way out of this deficit in addition to cutting our way out of it. >> one final question on ethanol because it's such a fascinating topic. >> as you covered. [laughter] a >> a lot of people have

questions about it as well. i think it's the crowd we're talking to. the limit to be hit in 2015, there's another component put in there that's waived every year because the capacity of the industry is not up to that point. when that 15 billion comes in a couple years and corn continues to be productive and u.s. farmers continue to have bumper crops, will people say, well, we don't need this ethanol, there's more corn for it. any discussion of that in a few years, and if not, why not? >> i don't think so because i think the key for the industry is to be national. what's happen happening now is located in the midwest. our goal is to make sure every part of the country has an opportunity to produce biofuel in the way most convenient and effective for them. it may be in the northwest you use woody biomass, but in the southeast you use grasses, or

other areas algae is available. there's tremendous things occurring in this space that are going to lead to new opportunities. i mean, just consider how it is that america built a strong middle class, the strongest economy in the world. it was because we were in the business of innovation. we were in the business of making and creating thins. for far too long, we've been out of that business. the biofuel industry is one way to get back into that business, and if we get back into in a robust way, we produce not just biofuel, but there's a multitude of coproducts and biproducts that arise from the process. in shanendoah, iowa, they are producing ethanol. the starch is use to make the fuel and the protein feeds the livestock.

what do you do with the co2? they decided to make, use the co2 from heat with the production process and reclaimed water and produce algae. they harvest algae every day through a sort of vertical and hoer horizontal farmer. you'll be able to on a small number of acres have a tremendous crop of algae that can be used as an aqua culture feed, used for cosmetics, and feed stock for fuel. that's algae. there's unlimited opportunities. the formula the president wants to rebuild the economy is a simple one. the government spends less, but wisely, an economy that makes, creates, and innovates, and because of that, we'll be able to export that opportunity to the rest of the world and we'll be able through those exports to

create wealth in this country. it has worked in agriculture. it has worked in agriculture. less debt in agriculture, more productivity, larger exports. today, income levels could be at the highest they've been in quite some time. >> a lot of questions of conservation and the environment. to combine some local and international. first, what is the role of the current sweep of conservation programs towards feeding tomorrow's population, and secondly, what, if any strategies, are the usda and other leaders doing to preserve enough land for food given population growth? >> well, conservation is about preventing soil erosion and improving water quality, and we're beginning at usda to see how we use our conservation programs within the suite of programs and assess how well we're doing in soil erosion and

how things get in the water that makes it complicated to preserve and reserve water. farmers are voluntarily embracing conservation, conservation is making a difference with soil erosion being reduced, less pesticides and chemicals getting in the water, but there's more work to be done. it's important and relevant in terms of water quality in particular that we combine a suite of conservation practices, not just rely on one single conservation practice, but utilize a sweet of practices, and they must be combined for biggest effect with nutrient management plants. when you combine those two things, you see the largest and most significant gapes. we assessed this in the chez peek bay area and i think we'll find that message constantly supported. cops vaition is about -- conservation is about supporting the quality and the capabilities of the soil, and we're working

with international partners to make sure that conservation is part of the discussion, the training, and the education that we are undertaking with feed the future and our agricultural efforts in other countries. we don't want to do it, we don't want productivity to be at the expense of the richness of the soil because if the soil is not rich, it will stop producing. >> we are almost out of time, but two important matters to attend to. first, reminding our audience of future spoomers. tomorrow, the former security counsel chair under president ford speaking at the journalism awards here. on june 24, sheila bear, the chairwoman talking about the federal response to the crisis, and on june 30, the actor announcing the formation of his foundation, a charity dedicated to raising funds for charities supporting the military.

second, i would like to present our guest with the traditional national press club mug. >> oh, thank you so much. [applause] >> how about a round of applause. [applause] you're a three time speaker now, you can hand them to your chirp when you have breast fast m i'm sure they're appreciate that. another issue was the release of the my plate food icon relacing the 19 years of pyramids in various forms. if you have not seen it, it's a plate with different portions symbolizing, i think it's grains proteins, fruits, and vegetables, and -- >> dairy. >> dairy on the side, yes, a cup of dairy on the side. next to that is there's this fork, and there's nothing coined as a value for the fork. my time question to you is what is the symbolism of the fork? [laughter]

>> well, alan -- [laughter] >> it's what we use at usda to eat with. i don't know what you do -- [laughter] [applause] having said that, the my plate is a great opportunity for us to send a concrete simple message to folks about proportioned sizes and a balanced diet which this country obviously needs to really pay attention to. >> thank you secretary vilsack. [applause] >> and thank you to all for coming today. we want to thank the press club staff and operation center for organizing the event. you can find more information on our website, and if you want a copy of program, check out our welcomes at www.press.org. thank you so much for coming here today. this meeting is adjourned. [inaudible conversations]

[inaudible conversations] [inaudible conversations] >> next on c-span#, a discussion on pakistan's interservice intelligence agency known as isi, and then a hearing examining the proposed merger between the new york stock exchange and the deutsche boerse companies. ..

what the middle east institute hosts a discussion on pakistan's main intelligence agency, the isi and its alleged involvement in recent terrorist attacks in pakistan, india and afghanistan. we will try former cia analyst and a senior national security correspondent for "the washington post." this is about an hour and 40 cents.

>> good afternoon. my name is wendy chamberlin president of the middle east institute, and on behalf of the members and the staff of the middle east institute, i would like to welcome you to this joint program that is being coasted with johns hopkins site. those of you who are members, welcome. your dues and contributions has helped make this possible. those of you who are not members know who you are. [laughter] , and we are happy -- we are more than delighted to have you here and we would like to welcome you to our website, you can see other programs that we have and we will encourage you to become a member and a donor. this is a very special event today inside the isi is certainly a topical, extremely

topical program. we all opened up the newspapers this morning and saw the double suicide bombing and read karen's article sunday about our own cooperation there. so we have much to learn from this excellent panel today. i'm going to sit down a second. i would like to introduce my long-term colleague and dear friend dr. walter anderson when i was preparing to go out to pakistan in august of 20011 of the key people at the state department that tried to prepare me was walter and i am deeply grateful to him and he's up the south asian studies program, and also one last thing que and that is to be in mac and peter for the middle eastern programs based on the lunch available to

all of us. so, walter, thank you for moderating and thank you to a super panel for this discussion. >> thank you, wendy. this is the first of what we expect to be several collaborative programs with the middle east institute and other institutes. as you can see from the turnout, this is a topic obviously of high interest in this town. this program as i mentioned is the first of collaborative programs between us and the middle east institute and it is about the service's intelligence institute agency which is the largest and most important intelligence agency in pakistan. from the beginning the most senior post of the agency has been held by military offices

and the agency is under the control of the chief of army staff. and any doubt of that was removed in the summer of 2008 when the prime minister john mauney announced that the isi would be transferred to the ministry of the interior, a decision that was retracted almost immediately when the army protested. the isi as you all know has been the subject of intense scrutiny in the u.s. and elsewhere including pakistan assault because of the group's links to militant groups like the afghan taliban that attack the u.s. and nato troops in afghanistan as well as groups that have been identified as terrorists like that and charged with the attack in mumbai in november 2008. the recent killing of osama bin laden by a u.s. navy seals and the location close to one of pakistan's major military academies and fairly close to the capitol city of islamabad

gave rise to intense criticism of the isi either because it didn't find him during the years he was resident in this place or perhaps they have even been involved in enabling him to remain. the even to the u.s. carried out as you know without informing the pakistanis, without informing the isi underscores a level of distrust between the u.s. and the organization. but, what ever questions there are about the link to the militant groups like the afghan, then, the isi has a record of working closely with the u.s. to pursue the remnants of al qaeda and its continued cooperation will play an important role in the outcome of the events in

afghanistan. the question, however, and i'm sure the panel is going to get into this, is whether pakistan has a deliberate policy toward afghanistan, and by extension towards the united states. that is is is supporting the notion of stability in afghanistan on the one hand and simultaneously supporting some militant groups that could give pakistan -- that could advance pakistan's foreign policy agenda in afghanistan and india. now we have perhaps the most knowledgeable people in washington to talk about that topic today, and let me introduce the speakers here. shuja nawaz who i've known almost since the day he landed in washington and i get in touch with him ever since was for many years with the international

monetary fund and he headed three of its divisions over the ten year that he served with them. among his many writings about pakistan and the military are three books, and probably the best book on pakistan's mother terrie, cross swords, pakistan, its army and the war within. second speaker is arturo munoz senior research scientist at the rand corporation and prior to that he was for 29 years in the cia both the director of operations and the directorate of intelligence and responsible for planning and implementing programs on counterterrorism, counter insurgency and counternarcotics. the third speaker is karen deyoung, senior diplomatic correspondent and associate editor of "the washington post" and directed the post award winning coverage of the white house, the congress and foreign news operations, and as

mentioned, she wrote a really fantastic piece in the post over the weekend regarding the activities or the devotee of insurgent groups to vacate bombing making facilities after they had been informed after the pakistan authorities had been informed of the location of these facilities. my name is walter andersen and next year i'm going to be heading the south asia program here. now most of you have come here to get answers to important questions regarding pakistan's premier military organization, and i have a few myself. let me throw them out and hopefully the speakers will answer them and we can get to them in the questions and answers. first is what is the nature of the relationship with of the isi organizations like the afghan taliban of mullah omar, the haqqani network? and related to that is is manly to gather information or involve

support including operational support. second, if they're our relations with the militant groups, at what level of the isi are these links maintained? and to what extent do offices who are tasked with working with jihadis face a choice between loyalty to the military and loyalty to the cause? still another related question is whether the chief of army staff's appointment of the close confidante was the general as the head of isi resulted in any changes of the mission of the organization, and the larger issue is whether the isi needs to be reformed. and fourth is does the announcement in late 2008 of the determination of the political cell and the isi mean that it ceased to involve itself in

pakistan's domestic politics and fifth but maybe the hardest to answer because of the classification involved, what is the likely nature of the relationship of the isi and the cia and are the present tension between the two organizations likely to continue. i could almost given answer to that right here. [laughter] but nonetheless, we can start -- if you could speak from here in the podium. >> thank you, walter and all of you for coming. i have to start with a disclaimer which is i am not an expert on the isi. my relationship with them is what i would call transactional which is the word that the pakistanis always use in a negative sense about their relations with the united states

that the united states is interested in its specific goals and what it wants and when it wants it but not anything long-term. mauney relationship with them as transactional because i want to know what i want to know and when i want to know it. and sometimes the day and our own intelligence people cooperate and most of the time they don't. but i want to talk just a little bit by way of introduction to the true experts on this organization about current events and where the isi fits in and what u.s. intelligence thinks about them. it's important i think to make a couple of initial points, and one is to acknowledge how much we, being the the united states, don't know. i think the cia, as walter indicated is constantly frustrated with isi, has really very little knowledge about what operates, and where its pressure

points are. there are certain things they believe about the isi but very little fat they actually know, and to understand this, i would ask you to consider the reverse situation. if pakistan wanted information and assistance hour of the united states had sent a level of intelligence operatives and drones and overhead surveillance in this country in order to find out what they wanted to know, reporting that, the organization of the cia, who was who, who was giving the orders to what extent they were tied to organized crime in this country, politics or anything else, how accurate do you think that information would be and how deeply do you believe they would be able to penetrate the intelligence organization here. the second point is one that is lost in the discussion of the

isi because we tend to compare it to the cia and that is not that the isi is related to the military in pakistan, it is the military in pakistan. it is not an independent agency also as i am sure among the points we will make today that there is the belief that some people act independently. they are believed to be rolled agents, but i don't think that it is a rogue agency in that sense. its agents and officers are largely from military as walter said its heads are in fact military officers who in the recent past did not come from intelligence backgrounds but from active duty military backgrounds. they are not necessarily trained in intelligence, so it's a puzzle for u.s. policymakers and

u.s. intelligence to try to understand where the dividing line is between what is road and not, what is the objective of the pakistani military versus the objective of intelligence. most recently as was mentioned we have the case of osama bin laden, and the united states as it tries continually to figure out who knew what in pakistan has focused fairly intently on the leadership of both of the military and the isi, and you won't be surprised to learn they sometimes listening to their conversations and they were particularly interested in how much surprise was expressed by the general army chief and the head of the isi when they learned of the osama bin laden operation, and i think they actually did some voice analysis

to determine how genuine that surprise was. of course there were surprised that osama bin laden was dead, but the conclusion was that they also were surprised to know that he was there. but clearly somebody knew that he was there. not only as was mentioned as the military town with lots of military and isi installation, isi in general is very involved in domestic security. it watches people, it watches diplomats, journalists, it watches political figures, it watches foreigners and pakistanis. as many in this country said it simply defies logic to say that nobody with the power to help maintain this compound knew about it, but the question is who knew and how heidegger within that organization? a few weeks after bin laden's death, marc grossman, the special representative for afghanistan and pakistan and

mike morrill, the deputy cia director traveled to islamabad to speak to the general and the civilian leadership. they were given lots of complaints as u.s. officials always are about the u.s. level of cooperation saying essentially that you americans are always telling us you know where these bad people are, but you never give us the proof of it and you never tell us where you know they are so how do you expect us to find them so grossman and morrell said they were prepared to open a new level of cooperation and intelligence sharing with the pakistanis, and among other things, they showed them a video surveillance that had been taken by satellite of to ied factories , one of them a girls' school which is the main city in north waziristan and a mother in

south windsor stand. the one in the north they believed was run by the haqqani network which is one of the afghan groups based in pakistan, and then the other they said was run by people affiliated directly with al qaeda. they also gave them a further graphs of information about various weapons. it was in the first time the had given them photographs in a number of meetings over the years the americans have said look, you keep saying you can't find haqqani which they do, they maintain that the haqqani spends more than half his time in afghanistan, and that the americans certainly have a lot of soldiers and why can't they find them and how do they expect the pakistanis to find them if they can't find them to have on a number of occasions americans given the pakistanis photographs of what they have said is the haqqani network and a madrassa where there also is a pakistani

military installation. and get to the pakistanis haven't done anything about it. within days of this meeting that they had in islamabad, further satellite surveillance shows the buildings being evacuated, and by the time the pakistani military actually did go there some three weeks later they found that the factories had been abandoned. so clearly somebody tipped them off but who? nobody really thinks that. but who? pakistan is obviously very proud of the isi. this is the origin from the founding of the pakistani state. as i said, it's in charge of foreign intelligence, but also to a great extent domestic intelligence. it coordinates the intelligence function of all three military

services, the army, the navy and air force. it conducts surveillance over its own people and those of interest inside and outside of the country, and it's also very importantly charged with protecting pakistan's interest as a regional power base in south asia. and that i think is a subject that has led to a lot of the problems now. protecting pakistan as a regional power base has meant many things. it meant when the soviet union occupied afghanistan, right next door, pakistan and the isi saw it in their interest to cooperate with the united states and others in funding, training and in pakistan's case providing facilities on the ground for the mujahideen forces who were fighting the soviet occupiers. it means pakistan undertook a similar strategy facing off india and kashmir and set up groups of militant fighters in that region to fend off the

indian threat. as far as pakistan is concerned, both of those threats to the national security continued. as pakistan sees it, india remains its national security threat. and afghanistan is a subset of the same threat. and so pakistan continues in the varying degrees to support those groups. as far as the united states is concerned, disbanding and shutting down the groups is a no-brainer. certainly it would make the u.s. task in afghanistan much easier and to the u.s. officials, the ongoing enmity between pakistan and india simply makes neither political or economic sense for pakistan to read the affiliate's however now pose a threat to pakistan itself launching terrorist attacks that have not killed high-level officials and a lot of pakistani civilians, but also had struck against the pakistani military itself.

but pakistan trusts neither the united states nor india to crack down hard on them. and to some extent, if u.s. officials and many experts are believed, the pakistanis have actually lost control to some degree of these groups. and that is where we get back to the question of whether the current activity maintaining the haqqani network and other groups with a bullet in the seas and guest houses in kabul and tried to assassinate president karzai and launch attacks in mumbai based inside the institution of the isi or the worker of the rogue elements. assuming that these groups are not actually under the control, and assuming that the pakistani military would like to put its own house in better order, recent events such as the raymond davis affair and the killing of bin laden meek that all the harder. the pakistani military owes its political and economic power to the perception of the country under threat from the east and

from the west and that is the most professional institution in the country. in harassment like these in recent months undermine the perception and their favorite position within the pakistani society and lead them - to dig their heels even further in their relations with the united states. thank you. [applause] >> thank you three much, walter and wendi for inviting me here and for your introduction, walter. it forgot to mention that we first met in 1975 when i moved to washington. so we didn't cover a time span. so we are both long term natives of the city, and also important to mention that i am now the director of the south asia

center at the atlantic council just down the road i am going to begin by acknowledging something that karen deyoung already said which is one needs to approach this with a certain degree of reality and humility. which is that if you go to any decent or half way decent country and intelligence agency if it is during its job, it is not going to secrets to you. in the interest of the truth in advertising, - one should acknowledge that when they say that they are talking about inside the isi today, perhaps there are very few people that can actually take you inside of the isi. so it's like the blind man and the elephant. the three panelists perhaps some more than others would be able to put their hands on different parts of this animal and pronounced a horse or a camel.

[laughter] an issue that is constantly raised and karen has addressed is whether it is autonomous and a rogue agency. the answer as you put it and i agree with is no. the reason for that is hysterically the isi was under the military and then it became responsible to the prime minister of pakistan which occurred during the government of the prime minister and it was mr. bhutto that created the first political wind of the isi which focused the entry from the intelligence and the external agency to one that was used as a tool by government to keep track of the political opponents and manipulate the political system to the advantage of the

government. so, in the history of pakistan, those civilian and military rulers, and the military rulers have ruled the longest if you look at the two long states and then president musharraf have both civil and military rulers have effectively seen as the isi as a tool for controlling domestic dissent and have used the intelligence capabilities of the agency in order to keep tabs on and manipulate the system to their advantage including elections. however, if you look at the overall record of the agency, which is comparing its counter operations on its external operations with disability to monitor and gauge what is happening inside of the country i come out in favor of an

effective organization in terms of penetrating the country's effectively and gathering intelligence on the neighboring countries much more effectively than discerning what is happening inside of pakistan. and to the isi historic kleeb this may be changing, have no idea, we will find out in the next elections come that if you look at the election of starting off in 1970 the isi was actively involved in trying to manipulate and election and try to bring in a certain party or a certain result which was to have a decided parliament it failed miserably in predicting the right results. after that almost every election the isi's predictions have been 180 degrees off target which means this is not their

strength. however, like many in the sporting league sometimes you don't want to change your game and so there has been this persistent effort at trying to spread far and wide in the country as possible. now, interestingly, the isi does have in the capital's the rank of brigadier who looks after what is happening inside of the province. but, pakistan is a huge country. the population of 185 million. there is no way on earth that any agency including the isi would be able to keep tabs and to be able to control information both particularly in today's age when technology, the cell phones are making it impossible for the autocratic rule to exist in most of these countries. there has been a kind of

perverse effect on this relationship between the offer tyrian rule and the isi. again, whether it is the civilian or military. and that is the boundary between the military and politics, and it's made in my view less effective overtime because instead of relying on the world the best intelligence policy natural, the isi over time was brought in to policymaking and policy advice by different rulers in pakistan. and when that happens, it gets into the kind of second-guessing we saw for instance even in this country where the slam-dunk approach to the iraqi invasion. when intelligence tries to second-guess what the political leadership wants, that is when the mistakes are made and that is when even good analysts and good intelligence on the ground level is ignored in favor of

what policies the leadership wants to see in demand. so, that's something that has affected the isi over time. in terms of the current relationships on i would agree what karen said primarily today under the direct military control, which means it is taking its instructions more from the chief of army staff and not even the chairman of the joint stuff even though the joint center services agency, and it is certainly not taking its instructions from the prime minister. one reason for that is quite clearly the civilian government in pakistan has ceded the control over many aspects of policy to the military. it failed to muster the support within it's extremely fractured coalition to be able to have a voice on the relationships with india, afghanistan, the united states or the nuclear issues.

so is this ground as a result the isi now terms for instructions. the reason why the general was selected as was said before he didn't have an intelligence background. most primarily because he was a close confidante of the general and continues to be close to him. he was a reluctant appointee to this post, and i gather he was reluctant to accept the extensions also. only he can clarify what the situation is. but the fact that he was brought from outside between the army chief and the head of the isi, and this by all accounts the traditional approach where the army chief presented a final of three to the pri minister and then the prime minister made his choice either from the panel or from outside of the panel, which is what happened at the time

when the prime minister chose someone completely outside the world at of the choice is given to him by the military chiefs at that time. and interesting illustration of this distinction between the civil and the military occurred recently after the osama bin laden grade which was a joint session of parliament. the second such session where an attempt was made to cobble together a single voice on how to approach relationships against terrorism, militancy in the united states in the wake of the raid. what was fascinating about this was that wasn't the army chief who were the two most closely involved in the defense of the country brought in to brief the joint session of parliament, but it was the head of the isi

brought in, and it was also fascinating that for the first time in pakistan's history, the director-general of the isi actually publicly has reported to have also been the resignation. and i was not accepted. now whether this was state managed or whether this was a reality is hard to discern. but the fact that this happened was first in the pakistan history. another change that has occurred recently has been that the isi which traditionally was seen as a kind of backwater for appointment accepted the head of the isi, all of the other people would essentially go there pending retirement and then they would be superseded and that was the end of it. but now as a routine this follows the fact that he was promoted to the army chief after having been the director-general of isi to read some of the key

court commanders in the pakistan army today are those who have held the major post inside the isi. and i should mention, again, structure of the organization, if you really want to be confused you just have to go to the internet and see many of the pieces written by my friends in india who seem to have every detail about how the isi is structured. you have to follow them from year to year and get completely confused by how it is structured. i am going to confuse you further. based on whatever i can find out and i can't find out a lot because i never penetrate the isi i believe that there are six wings and there are six major generals did come under the command of the jerked general. when these generals are either superceded at the end of their term or promoted and when i

prefer to the ticker refer to the promotion the key commanders including the ones in law or as well as bouchard our major generals from the isi is seen as a very necessary professional step in the progress of one's career within the pakistan military, and it no longer has the stigma that was once associated with it. because once you are linked to the isi is a dead-end for your career. now, i spoke about the effectiveness of the externals aspect of the isi. internally, the weaknesses primarily due to the fact that there is no nexus between counterterrorism and counter insurgency inside pakistan. and that the military side is divided. the isi and the military intelligence which reports directly to the army chief and reside in the army headquarters

are fully a autonomously and i am not sure that they have the kind of coordination that would be ideal. so in public shiastan for instance there is a very powerful military intelligence presence and there probably is also, there's often the crossing of wires between them. what is worth is there are at least 19 other agencies inside of pakistan that come under the civilian set up and these are different police agencies including the federal investigative agency and almost no coordination of counterterrorism or counter intelligence inside the country so there are probably in the number of stovepipes that exist that make the job of any and all of these agencies so much harder i should say it is entering the 21st century and has become extremely conscious of the media

involvement and relationships with the media and think tanks reaching out trying to arrange visits and so on, and this could be a good thing but it also can enhance its own sense that it can control the media. and sometimes my feeling is that the isi may think that the foreign media come under the same briefings and controls some pakistani media are susceptible to at home and that creates a difficulty in the way that the isi country as whole inside pakistan and others the new suspicion is active and running around the country asking questions than he must be cia. now of course their recent raymond davis case and there may be others to come to light and

between the u.s. and pakistan is going to further strengthen that paranoia. there's also a legal issues which deal with the fact that all the very extended period of autocratic rule by the general musharraf to structures and constraints that existed on the military and the isi in dealing with the population of pakistan being removed. so there's no legal authority for any military organization or the isi to be able to arrest people. they do not have constitutional cover for that. but this became so routine because the military and the the civil government for all in one hand. was general musharraf who victimized government and were the head of the chief of army staff as well as the president of pakistan. so it didn't matter. the government wasn't going to complain, and that legacy is

creating problems even today for pakistan. where the military obligations of the abduction and mistreatment of journalists and the killing of journalists, when the public starts complaining about it creates a new legal problem and the question is when will flow supreme court take more notice of something like this, and when that happens, pakistan's already very fragile is going to be further factor and we don't know how badly. i'm going to stop here and hopefully announce the questions we can provide some more insight as a group. thank you. [applause]

>> i want to start my remarks mentioning that the isi when it was first created was just a military intelligence service like any other in the world. i read that a british officer actually played a key role in organizing the isi of the beginning. but the isi changed dramatically during the regime, and of the event that was critical in changing the isi was actually the action program in afghanistan against the soviet union. because isi became the key intermediary, the key interlocutor, the key mechanism

by which american aid by the mujahideen. the americans by and large didn't give the assistance talk about weapons, money, so forth directly to the mujahideen they did it through isi sophos isi's role greatly increased its size greatly increased, its function greatly increased during that period, and i wouldn't say solely because of the court action in the soviet union but i would say that is a major factor. so ironically, as we contemplate years later all the conflicts between ourselves and isi it's important to keep in mind that their origins are very much

mixed up with our foreign policy. you know, from their beginnings. there's a question that has been raised is the isi intelligence competitive with us or cooperative? well, i would say it's both in my mind, because as the whole world is asking how could they not know about bin laden? how is it possible isi didn't know? and i found most people conclude of course the new. however, we should not ignore the fact that khalid sheikh mohammed, abu zubaydah and many other al qaeda leaders into operatives were captured or

killed in pakistan with the assistance so they have been providing assistance, and one explanation of this competitive versus cooperative issue i think seth jones or what's his name and address is it in 2001 when we pressure the pakistanis to help us participate in the war on ticker, we did not insist that they would drop prize with the taliban at time. we were very much focused on al qaeda.

isi said find, we will cooperate on al qaeda, but they didn't say anything of the taliban or the other groups. it wasn't brought up and we didn't insist. so, the isi continued their relationship with these groups will be targeted al qaeda in assisting us. and the impression that i got during the that period was there was something else to it besides what i just said, and that other issue was the defering threat perceptions of the pakistan is regarding the threats that they face, i think the isi consider some of these al qaeda individuals as threats to them to pakistan and the isi because they are not under control but

they did not consider the taliban as a threat. and if you look at all of the arrests that were done with the assistance of the isi, a lot of them were in the settled areas in the cities, the urban areas, because i think the isi consider these al qaeda leaders and operatives a threat in the pakistani urban areas to pakistan. however, they didn't consider the taliban guerrillas in the mountains of the northwest frontier province as a threat. and by the way, yes, the northwest frontier province. i think that perception continued until recent times

when some of these groups have now begun to target the pakistani military and target the civilian populations putting bombs in marketplaces, blowing up the trifles and attacking the military directly and more just military uniform but families of the military because they did an attack at a moscow which is basically attacking the families of the military who recall that incident a couple of years ago this is an attack on muslims praying in a mosque in the military sector so now the terrorists are attacking the military so i think the perception is changing as to what is the terrorist threat to pakistan. now let's ask about specifically

the isi role in the taliban. a lot of people have written that the taliban is a covert action of the isi. to have a lot of evidence to support the thesis, and there were some quotes if you read seth jones he has a series of quotes which is documented basically the isi created the taliban. the taliban after the russian withdrawal. but i would present some contrary evidence because it is a wilderness of mirrors it's hard to say with certainty

anything yet in my conversations with the former taliban they don't mention the isi at all. the only talk about what they did organize themselves. on the isi, their view of themselves is ahmed -- he was a former television foreign minister and he studied in pakistan in the madrassa but it was not a sign of the madrassa financed by the saudis, it wasn't a madrassa controlled by the isi it was just a madrassa and was funded by followers of the tauscher who had been killed by the communists. a local and in southern afghanistan. i don't remember the name. and he studied at fi madrassa to

become a malawi and he would always say i don't understand why americans insist on calling me when my man of wally. it's a high your level. it's like a college degree first is a high school degree. you can say it but forever more we use in our literature. anyway, so, he described the timing of the turban ceremony in the madrassa when he was graduated, and this was in pakistan in the area of qatar, then he returned to his home town in the long pull trajectory this was the day of the civil war after the russians left and there were roadblocks set up by

the militia and the warlords and they would steal from people in the buses and cars, they would kick up women and young ablaze and was a disaster. it was a breakdown of society. there was war lord and militia and criminal bands and complete absence of law and order. when he returned he was an absolutely disgusted as to what had happened to afghanistan during his absence. then he heard about the group of islamic students, the taliban the performing and he said i'm going to join them because we need to impose islamic law and order and then he described how he sought out the taliban and joined them. nobody recruited him because there was the need in afghanistan for something. now in his whole story in the rise of the taliban, the isi is

a big player. they are there but they are not really important according to him. now he does describe whole lot of isi officers would wear turbans and blackbeard's, well, beards, not necessarily black. [laughter] black turbans and beards. there we go. [laughter] because they were trying to pass themselves as clerics. so sure, the isi tried to shape this movement, but the taliban themselves would dispute at least the ones i know or have talked to the widespread assumption in the literature, the academic literature that the taliban are in isi, let's come

to the present. now in terms of current isi support for the taliban, there's a lot of evidence on that. for example, jones says the u.s. and nato officials in which they provided intelligence to the taliban and other insurgents at tactical and operational and strategic levels they tipped off taliban forces at the location and movement of afghan coalition forces and undermined several military operations. isi operatives were highly aggressive and collecting intelligence on the movement and activity of the afghan u.s. and nato forces. the members share some of this information with the taliban. they also provided training and

list where so they provided training and intelligence, they provided strategic and operational at guice through the taliban nowadays, and the ultimate manifestation of that came with a july 7, 2008 bombing of the indian embassy in kabul where the u.s. intelligence assessment concluded that isi agents who were involved in planning the attack which killed 54 people including the attache and that what president karzai to complain formally. the big issue is is this a rogue operation and that's hard to say. some observers argue that these

lower ranking officers wouldn't do what they do if they didn't have the approval of their superiors. and it's kind of hard to imagine the scope of the assistance to the taliban is the work of the rogue agents that's not approved at the highest levels of their organization. if the other issue that is debatable was what degree does the isi answer to the army? people argue on different sides. some former army officers described isi as a long to itself that doesn't take its orders from the military, and the even gone so far as to say they are implicated terrorist attacks on military personnel. and then i would ask why would they do that?

let me close my remarks with addressing the issue of why and the strategy, this dual strategy of the cooperation and competition because i would argue they still cooperate even now they still cooperate and compete. why do they pursue that strategy. a lot has been written about the fear of a circle and by india and the view of the islamic militants as proxies' and with india there's been a lot written about that they're concerned about activities in afghanistan, road building, funding to political parties and figures,

india's culbert action the opening of consulates to borrow a phrase from the ayatollah khomeini spy is so this is what they view is going on north of their border, so it's kind of defensive actually, their strategy. they don't mind. they are not the bad guys. they are just protecting themselves or protecting afghanistan by using the surrogates. i would -- there's been a lot written on that. i think that another element that hasn't been as much written about certainly not known i was a disappointment with the u.s. and lack of faith in liability. everybody will tell you about the negative things that

happened when we lost interest in afghanistan and pakistan when the russians were driven out. and so that is well known. but another episode that isn't as well-known, and i remember it well because i was involved in the period, and i witnessed this myself but it happened in 2005 and a devotee of the audience is thinking 2005, what happened in 2005 that should have disappointed anybody or promoted lack of faith in us well, it is when nato was given command for operations in afghanistan and they said that is the beginning of the end. the americans are not going to stick it out. the fact that the americans place nato at the head of the

military effort formally it's the beginning of their withdrawal. and actually i think they are right. and now of course we had our own political reasons for doing it and we certainly didn't do it that way but i think the afghans and pakistanis received it that way but this lack of resolve on america's part to stick it out, to be there for the long haul and then of course the negative perception from 2005 has been tremendously exacerbated by the recent announcements and debates about how fast are we going to withdraw. i mean, we set a date 2014, and now all of the dates in the u.s. about how much, how soon, how

fast, how can we stop financing the war, how fast can we pull out? all of this reverberates back in pakistan and afghanistan, then i think this increases the isi thinking we are in this on our own and it's useful for us to have relations with taliban commanders. for our own security come here after the americans leave, so it's actually not that day, you know, just to be provocative it's not so much that we are involved, it's the we are not involved. why they take the independent stance that they take. i know a lot of people would disagree with that but it's something to think about. let me and with that. [applause]

>> if you have a question to ask we have a microphone. what about that there. we have microphones on each side and we will start with a first question i saw a hand here and let me get somebody over here appear in the front. then we will go back. okay? >> my question is for shuja nawaz. what extent is it guilty of imaging when it analyzes its competitors or partners in the u.s. and india and elsewhere for example of the publish an article in "the washington post," does the officer think that it's part of a cia agenda and the same way they deal with their own media and what does that say but the analytic