i said, he did it. why do you suppose? i don't know, very disappointing. probably did it to make the country run, another sick idea. and let's just look at the aarp. just this morning i saw that ad. that is the most disgusting, the most disgusting ad i've ever seen. i don't know what the people got paid, especially the actors, but i can tell you this: they're well paid. they said we are 50 million, we're watching you, we remember, and we vote. i tell you, that is a really ugly thing. but let me tell you about the aarp. let's, let's remember what they will be when they do nothing. we ask them what they would do to help, and they said we have two things we'll tell you, they never did. ..

anything but that. interest rates will go up, inflation will go up by the failure and guess who gets hurt? the little guy, the vulnerable guy that everybody babbles about day and night will be the one hit with a hammer on the shnoz. remember the definition of politics. in politics there are no right answers come only a continuum flow of compromise among the group's regarding the public decisions for appetite and ambition to compete openly with knowledge and wisdom. thank you very much.

for president kennedy during the cuban missile crisis in former governor of illinois and twice ran as the democratic nominee for president and lost. adamle stevenson is the teacher this week on the series the contenders from the stevenson family home in libertyville illinois live friday at 8 p.m. eastern. for a preview including more ofp the speech and other videos gopp to the special web site for the series, c-span.org/thecontenders

malae hearing none international organized crime, money laundering interest financing. witnesses included an apologist for a bureau of the alcohol, tobacco and firearms program that allowed guns to cross the u.s. border into mexico. this is a little less than an hour and a half. >> good morning. the hearing will come to order. i appreciate the witnesses having taken the time to join us. i'm not sure if any of our republican members will be joining us, but i have been given the nod by the minority staff to go ahead and proceed. so i will begin with my opening

statement if anybody else does arrive we can proceed to their opening statements if they care to make one. every day, as we know, overseas criminal networks target americans, weakening our economic prosperity and compromising our safety. today's hearing provides an opportunity to evaluate our current statutory authorities, law enforcement tools and resources for protecting the american people from the serious and ever-growing threats of international organized crime. the international organized crime networks we confront today are significantly different from a third criminal networks we confronted in the past. criminal groups in pleasingly operate internationally, taking advantage of globalization of the internet and of new technologies to engage in

sophisticated and expensive crimes targeted at the victim's an ocean away. overseas networks of cyber criminals have hacked into the computer networks of innovative american businesses, stealing their valuable intellectual property in order to produce cheap competitors or counterfeits. large-scale criminal enterprises are openly engaged in the online sale of massive amounts of stolen american movies, music and software. and an entire criminal the industry has grown up around stealing and selling credit card numbers coming to count passwords and personal identification information of american consumers. criminal groups involved in human trafficking or smuggling narcotics and weapons are dangerous to our communities often engaged in kidnapping and

extortion and related of acts of violence along the way. some overseas crime networks are linked to terrorist organizations. these foreign criminals overseas base of operations, flexible network structures and use of the internet and other modern tools create significant challenges for u.s. law enforcement. investigators tracking and international crime group must regularly work in and with several different countries to build a single case. the law and practical circumstances in each country pose obstacles to uncovering evidence, to interview witnesses, to locating criminal suspects. and the high-technology tools used by criminals require the law enforcement experts to use complex and often costly for in six to identify those responsible for a crime. even once investigators pieced together a case against a

dangerous group and found other suspects, additional hurdles may stand in the way of bringing foreign criminals to justice. criminal statutes for a sample may not apply to criminal groups based overseas and some of our most powerful criminal law is for the organized crime may not capture the type of fraud and theft that international criminals engaged in today. our rico statute for instant does not apply to computer crimes and thus does not help combat overseas hacking rings. overseas criminal groups demand heightened attention and resources from many elements of the government. investigative and law enforcement agencies must work together to detect and disrupt overseas criminal plots. they must also collaborate with our economic, diplomatic and intelligence communities to share threat information, cut off criminal networks access to funds and supplement criminal

prosecutions with other approaches in keeping the american people safe. it is good that the administration has announced an aggressive strategy to combat international organized crime and prepared a specific which is slated for recommendations on which congress can act. today we are joined by representatives from the department of justice, the treasury department and those who are well-positioned to discuss the threats we face from foreign criminals if taken and what we in congress can do to provide law enforcement with the tools it needs to confront this challenge. protecting american citizens and business from foreign criminals is no partisan issue members in congress in both parties agree that we must strengthen our ability as a nation to take down these overseas criminals. our ranking member senator qaeda was unfortunately not able to join us today because of his important commitment on that

committee but i greatly enjoyed collaborating with him this year on the legislation concerning cybersecurity and of other hearings and i look forward to working with him and other members of the committee on this important issue. since there is no one immediately present to make further opening statements, we can get right to the meat of the hearing which is always a good thing. i would just go right across the panel beginning with -- and breuer, the assistant attorney general for the criminal division at the department of justice. before joining the the justice department, he was a partner at covington and burlington llp at washington where he served as the co-chair of the white collar defense investigation practice group. previously he served as an assistant district attorney in manhattan and as a special counsel to president clinton he received his b.a. from columbia college and we're pleased to have him here today.

mr. breuer please proceed with your testimony. >> good morning mr. term and it's a pleasure to be here. think for the opportunity to appear before you today along with my partners from the the part of treasury and homeland security to discuss the justice department's efforts to address the threat posed by transnational organized crime. transnational organized crime posed a great and growing threat to our economic and national security and safety of our citizens. these groups create a staggering array of crimes all the way from credit card fraud is cybercrime to violent crime and drug trafficking. they penetrate and undermine government institutions. they threaten the world financial system and they subvert legitimate markets. for these reasons, the task of combating the transnational organized crime's have never been more urgent.

the fight against transnational organized crime is among the highest priority in this administration and the justice department is proud to play a leading role in that effort. the department has made great strides in attacking transnational organized crime groups as the case is highlighted in my written testimony illustrate, our work often depends upon our close relationships with foreign hot all enforcement. it is often impossible to identify, arrest and prosecute offenders working in critical evidence without the assistance of our allies. to give just one example, our prosecutors and agents work with romanian law enforcement to target organized criminal groups operating in that country to threaten american citizens and institutions. just last month, i traveled to

romania and saw firsthand how closely the two nations are working together and that work is paying off. for instance, earlier this year joint investigations resulted in the rest of over 100 organized cyber criminals in our two countries. but the challenges to pursuing these groups remain significant. for the civil, law enforcement in some countries is unable or unwilling to cooperate with our investigative efforts. in addition, finding the assets of sophisticated criminal organizations often involve on ruffling a web of sophisticated web of the corporations used to it as a disguise the profits, and even if we are able to build a case securing that, securing extradition of the defendants often poses a significant obstacle. the attorney general holder and

i have taken important steps to better position the justice department to confront 21st century organized crime. in 2,090 attorney-general announced the creation of the international organized crime intelligence international center which coordinates the efforts of my and federal law enforcement agencies against transnational organized crime networks the excess supply recommendations to merge to organized crime and sections within the criminal division to the effective use of the resources to go after organized crime groups both here and abroad. the support of congress, that merger took effect earlier this year. the organized crime requires more than effective law

enforcement. to that end, in july the administration announced a cutting edge strategy that for the first time brings all of the resources and tools of the federal government to bear in a coordinated way against transnational criminal groups. one of the centerpieces of the new strategy is a package of the essentials legislative updates designed to ensure that we have the tools we need to confront these evolving threats to read this package includes changes to the money laundering and forfeiture of these to improve the ability to break the financial backbone of criminal organizations. we also seek to modernize our racketeering law yes. and we propose other amendments aimed at addressing the increasing global reach of the organizations. we believe that these legislative proposals will enhance our ability to attack

the transnational criminal groups wherever they are to protect the american people from this global threat. thank you for the opportunity to discuss this important issue with you and i am pleased to answer your questions. >> thank you mr. breuer. mix what mrs. daniel glaser, assistant secretary for terrorist financing at the department of treasury office of financial intelligence. he also served as treasury deputy assistant secretary for terrorist financing and financial crime. in addition to his prior role of the treasury department he served as an attorney for the united states secret service and as the head of the u.s. delegation to the financial action task force and intergovernmental agency charged with formulating policies to combat international money laundering and terrorism financing. he's a coach would of the university of michigan and a columbia university school of law and we welcome him here. mr. glaser to read

>> chairman and the distinguished members of the committee come think you for the opportunity to appear before you today. to discuss the treasury department's contribution to the obama@strachan strategy to combat the transnational organized crime. in my testimony today i will focus on the treasury department efforts to implement the strategy with the use of the unique authority including the executive order 13581 as well as our ongoing work to promote financial transparency both domestically and abroad. in the early 2010, the united states completed a comprehensive assessment of the transnational organized crime which concluded that they have expanded in scope and sophistication engaged in a range of activity and exploiting the international financial system. to combat this threat to the u.s. interest obama administration announced a national strategy to combat the transnational organized crime that utilizes new and innovative capabilities and tools to combat this threat. the most significant tool is executive order 13581 designed

to specifically block the property of major transnational criminal organizations. in the executive order the president identified as and imposes sanctions of the significant criminal organizations. the circle in russia, the camorra in italy and in japan and in mexico these groups grow in infiltration of the commerce and economic activity threaten u.s. economic interest at home and abroad through subversion explication and distortion of legitimate markets and economic activity. the result is a convergence of complex volatile threats to the u.s. national security. the treasury department is implementing a strategy to implement. first, we are attempting to match the financial network of these organizations so we can target them with derivative designations thereby undermining their ability to operate effectively but in the international financial system. we will complement u.s. law enforcement in the fight against these criminal organizations building on our older the close

cooperation with the deepest part of a justice. we will also work with like-minded foreign partners and the international financial community to build an international coalition to combat the transnational organized crime more broadly. in fact i will travel to moscow next week to discuss this issue and build on our ongoing collaboration with the russian counterparts. of course, the treasury department will not limit our efforts to the group's to this exhibit of order. we will also seek new organizations to target and in a playful arsenal of tools including section 311 of the patriot act. successive efforts to combat organized crime through the targeted action also rely on the ongoing work to promote the transfer and global financial system. transnational criminal seek to exploit the complexity of the international financial system. we therefore must enhance financial transparency and the minister devotee to commit and profit from crime. in order to improve the transparency, the treasury department has worked internationally to create a

global and money-laundering counterterrorism financing frame work as a condition for taking action against criminal groups. this work has been advanced for such organizations as the task force, the imf, the world bank and the g20. these efforts however are undermined by the devotee of criminal organizations to launder illicit proceeds to the abuse of legal entities. accordingly the treasury developed a strategy to address the fall nobody in the u.s. and international financial system. first, we are working with our agency partners and with conagra's and putting a particular senator levin to develop new legislation to of law enforcement and not legal entities created in the u.s.. second, we plan to clarify and strengthen the customer due diligence for the financial institutions with respective beneficial legal entities. finally, we are working with our international partners to clarify and facilitate the global implementation of the international standards regarding the beneficial

ownership without widespread global implementation illicit actors can strengthen the u.s. requirements and act as the financial system through other means transnational organized crime presents this as threat to the system. efforts to combat this will persist and we will continue to find innovative ways to disrupt and dismantle illicit financial networks and ensure the international financial community builds strong systems to the organized crime groups. thing you for the opportunity to testify today. i look forward to answering any questions. >> thank you, mr. glaser. our final witness this kumar kibble from the peter to for immigration and customs and for as much of the department of homeland security. the leadership roles at i.c.e. headquarters including deputy assistant director for the national security investigations division and as the deputy director and acting director of investigations. mr. kibble began in 1990 as an infantry officer in the u.s. army's 82nd airborne division and is a graduate of the u.s.

military academy at west point. we are pleased he is here. mr. kibble. spec members of the subcommittee on behalf of secateurs in public, and director martin think you for the opportunity to discuss i.c.e.'s guinn combating transnational organized crime. our roughly 20,000 employees and quit 7,000 homeland security investigations or hsi special agents assigned to more than 200 cities throughout the united states and 74 offices around the world. this global team focuses exclusively on investigative transnational threats. hsi investigators are uniquely equipped with cross border authorities come expertise and information enabling it to disrupt and dismantle transnational criminal networks operating along the entire illicit travel and trade pathways in destination transit and source countries. just yesterday we announced the results of operation pipeline express, a 17 month multi agency investigation responsible for dismantling a massive narcotics

trafficking organization in the lower cartel. conservative estimates indicate that during a five-year period, this organization smuggle more than 3.3 million pounds of marijuana, 20,000 pounds of cocaine and 10,000 pounds of heroin to the united states generating almost $2 billion in illicit proceeds. hs saudi agents working with of the sheriff's office, the arizona attorney general's office and more than 20 federal, state and local partners are arrested 76 subjects and seized more than 60,000 pounds of narcotics and more than 100 weapons. the organization smuggling methods and would use of backpackers, vehicles and counter surveillance operations. this demonstrates how dhs i target's the transnational organizations along the entire continuum of the transnational crime. beyond the borders and the ordination with foreign partners come at the borders and coordination of customs and border protection and written the borders in cities tour of the united states and partnership with federal, state

and local and tribal agencies over the last two decades transnational organized crime has expanded a dramatically in size, scope and impact and response early this year the administration launched its strategy to combat organized crime. to support the administration strategy with an i.c.e. we developed the pathway tax strategy using a risk-based approach, we prioritize our efforts to attack the convergent points and vulnerability and a network in the infrastructure used by high risk transnational criminal not works. our first plan to submit its engagement with host country partners to increase direct human smuggling investigations and enhance in exchange of information, build capacity of support foreign and domestic prosecution. coordinated strategy of attacking the networks along the entire illicit truffle reduces pressure on the borders and assists partner nations in disrupting organized smuggling within their own territory. in addition to human smuggling, hsi works with the interagency parkers to disrupt and dismantle

criminal networks engaged in schemes that include intellectual property theft, arms and technology, title exploration, kunin trafficking, drug smuggling and transnational activity. to dismantle these, partnerships and information sharing with domestic and more importantly foreign counterparts are absolutely essential. we leave several agencies centers to coordinate a comprehensive response to the threats. the national center brings together 19 federal and international partners to address intellectual property theft. through the center we are leading an effort to educate the public and audience about ip sefton this connection with international organized crime working with cybercrime senator vip are is innovative cyber operations resulting in the seizure of the 200 domain names are used to facilitate copyright infringement. the export enforcement coordination center created by an executive order and the

investigations among cdp de departments homeland security state, commerce cut treasury defense, justice, energy and office of the director of national and intelligence and what human smuggling and trafficking center is an interagency fusion senator clearinghouse to help ward and the interagency efforts involved in human smuggling and trafficking and sadly a significant number of these victims are children and we take these cases very seriously balkhash smuggling investigations are coordinated through the cash and smuggling center. we provide real-time operational and technical support to federal, state and local officers involved in double cache smuggling seizures 24 hours a day, seven days a week and record and a closely with the el paso intelligence center to respond to these cash smuggling increase from state and local agencies. i think you again for the opportunity to appear before you today and for your continued support of law enforcement mission and i would be pleased to answer any questions you may have. >> let me thank the witnesses

for them being here and for their work. i don't need to tell you as people who are on the front lines of this battle that we have never been more vulnerable to the international organized crime and certainly don't need to lecture you about the urgency of our response you are living at. but i think you can tell us what tools we can provide you to make your job easier and more effective in dealing with this large growing and increasingly pernicious threat. let me first ask a question about the scale of the enterprise that you are facing. compare for me the revenue for instance some of the largest

criminal cartels and organizations have access to with the revenues of of what's a small sovereign countries just to give a sense of the scale for starters. mr. breuer? >> thank you, mr. chairman. mr. chairman, you are absolutely right. the challenge that we face internationally and nationally in the international organized crime is extraordinary. in some of these groups of course have persuaded that it crosses borders easily and have become almost institutions almost extraterritorial if you will states of themselves. you talk about some of the groups in the former soviet union. if you talk about groups in latin american cartels, the have a masked gunman believed to resources and are extremely diversified and the have of course -- >> will use the enormous resources, compared to -- or the

resources larger than the revenues of countries that we recognize? >> certain countries, yes con senator. they are at least equivalent. so we believe they are massively diversified switch pos is an enormous threat and underscores your point that to combat this will only do we need to have enhanced tools, but we need to have our international partners join us in this very important preeminent battle. >> is their anything to add on that? >> just to give you some numbers, mr. senator. the narcotics industry in the united states is reported to generate between 19 to $39 billion in profit per year. one of the groups targeted within the executive order, their annual budget is an estimated $25 billion.

the world bank has admitted that there's a trillion dollars per year spent on bribery around the world. so, absolutely right, we are talking about big numbers that have the ability to skew on the ability of the government around the world to combat it. >> do you agree mr. kibble? >> i think the specific cases of the investigation announced yesterday that group over the five-year period generate over $2 billion of revenue. i can think of a bold cash smuggling investigation that resulted in the colombian super cartel. that generated in excess of $5 billion. so, we are talking about amounts to a range into the billions. specs of the other question is when i think back to my u.s. attorney tenure, and i consider the cases that we did that were the most intensive on the office, one was a public corruption case. it involves a lot of the doj oversight because doj does a lot of oversight on the public

corruption cases, as you know, mr. breuer. it involves the racketeering prosecution which is a number of complexities and off issues with doj. it involves undercover investigators who have to be backstop and put into the positions involved working with confidential informants which is always complex. and you put the whole thing together and it was very time intensive and management intensive. it took a lot of work. we have an environmental case with a lot of forensic work that had to be done to rebuild what happened to a burned and a larger rate in order to show the culbert with the of the company. and a wonderful fbi agent has spent an enormous amount of time effectively virtually rebuilding i guess you would say that so that we could show the necessary criminal standard had been met.

you look at cases that are in tensive at that and then you add to that the for an element, and i'm going to be out of time so i will come back around to this some more in the second round but just quickly scale for me in terms of gathering evidence and very readily in the united states but you are an fbi agent you can get subpoena, you can interview witnesses, that is the very simple part of resemble investigation move that to a foreign country and suddenly it becomes complex. can you comment on that? >> of course you are right. we are proud of what we are giving up the complexity is one of the transnational organized crime groups we have to collect data internationally. we do that through law enforcement partnerships all of which take a long time because

we have to build those relationships. if we are going to bring admissible evidence into court we have to do that through the mutual legal assistance treaties. some are more progressive and are quicker about those than others. we have to deal with the byzantine financial records all over the world in different institutions that sometimes are more helpful. and we have to do that with our resources so these are very difficult. with some countries we have better relations and with others we have less. some are more sophisticated, others are less and with transnational organized crime is being so powerful, wealthy and entrenched, identifying from exploiting our knowledge and prosecuting is an overwhelming responsibility of ours. i think it is one we are doing well but clearly it is a challenge. it becomes harder each day. >> my time is expired. before i turn to senator grassley with me asking for a one word answer.

given the power and of the wealth and the reach of these organizations, is it always clear in in dealing with a foreign country that the foreign country is not on their side? >> no. >> thank you. senator grassley and then on the order of arrival senator feinstein, senator kunes and senator klobuchar. >> thank you mr. chairman. mr. speaker, yesterday he made a public statement saying that the atf and the attorney's office officials, quote on quote, repeatedly assured officials in the criminal division and the leadership of the part of justice the allegations about walking guns "fast and furious" for not true. please be more specific. who exactly at atf said that the gun walking allegations were untrue and who said the allegations were not true? >> senator grassley, as i said

yesterday it was my office that ultimately prosecuted the wide receiver case and i want to be very clear to you, senator, when i learned of this in april of 2010 and i decided to prosecute this case from 2006 and 2007i regret that i dillinger then, knowing now, knowing now i wish that that time the lawyer said clearly to the deputy attorney general and the attorney general that in this case wide receiver we have determined that in 2006 and 2007 guns did what. >> who told you atf and the attorney general's office that these allegations were not true? >> well, mr. -- senator.

at the time as i recall, l.i. we first spoke to the atf in 2010. my front office did. based on what i understood, we had an understanding from the atf the practice in 2006 and 2007 that the atf understood the seriousness of that. >> what is the individual's name? >> it is clearly as far as i know, senator grassley, at the time mr. hoover was the deputy is one of the people who would have been involved in that discussion. of course i wasn't there for it so i can only tell you my understanding. >> that's all we want is your understanding. >> of then senator earlier in this year when in this matter came to life and the atf agents made the claim that they did, i recalled that both the leadership of atf and the united states attorney's office in arizona those of course who were

closest and were handling the matter were adamant about the fact that this was not in fact a condo in practice. >> i'm sure you recall that as well. >> the word is to the people ahead of the office and head of atf even the you didn't give me their names that's who you were talking about, right? >> that is exactly right. >> let me go on then. february 4th, 2011 the department sent me a letter also assuring me that allegations of the gun walking or not true. it reads, "atf makes every effort to interdict weapons that have been purchased illegally and present their transportation to mexico, and of quote. that statement is absolutely false, and you admitted as much last night that you knew by april, 2010, that atf walked guns and operation wide receivers; that's correct, yes? >> yes, senator. >> that's all we need to know if that is correct. did you review the letter before it was sent to me?

>> mr. senator, again i want to be clear as i told you a moment ago i regret that in april of 2010 but i did not for the connection between the wide receiver and fast and furious and moreover on a regret that even in their early this year i didn't draw the connection. in direct answer to your question, senator, i cannot say for sure whether i saw someone draft a letter sent to you. what i can tell you, senator, is at that time in mexico dealing with the very real issues that we are all committed to i also regret and said they didn't draw the connection earlier. >> after learning of a gun walking into the wide receiver, did you ever inform the attorney-general holder with a deputy attorney general about it and if so when and if not, why not? >> i can't be more clear. i said to you and i will continue, the fact that in april of 2010i did not. at the time i thought that

dealing with the leadership of atf was reasonable and frankly given the amount of work i do with the time i thought that that was the appropriate way of dealing with it. but i cannot be more clear that knowing now if i had known then what i know now i of course would have told the deputy attorney general. >> did you tell anybody else in the justice department leadership the same thing and if so, who would win? >> i thought that we dealt with by dealing with the atf leadership. >> how many guns or walking in wide receiver? >> senator, i can probably try to look at that. of course that was in 2006 and in 2007. just to be clear if i may, senator, that is the case that had been abandoned in language. it was my decision the decided to take the case permitted to go to mexico years early year and of least make sure that the criminals who were responsible for purchasing those guns were held to account as a result of

that, senator, we prosecuted 11 different people like to answer your question in the total probably about if my math is good about 350 or so but i will have to double check that number. >> i think that you are very close, so you don't have to check that number. according to my information just five straw buyers and i will refer to the chart here and then quit and let you go on to another member and i will do some more on the second round. according to my information just five of the straw buyers and "fast and furious" were allowed to buy a thousand weapons. when did you first know the guns were walked in "fast and furious"? >> senator, i found out first in the public disclosure made by the agents early this year. when they started making the public statements of course at that point as you know both of the leadership of the atf and the leadership of the u.s. attorney's office at my place and that those allegations were

wrong. but as the allegations became clear that is when i first learned that the guns that they had both of the ability to interdict and the legal authority to interdict they failed to do so and that is when i first learned that, senator. i will next call one senator feinstein who not only brings to the concern the distinguished service on this committee but her service as the chair of the senate intelligence committee, senator feinstein. >> thank you mr. chairman. i appreciate that. mr. speaker, in in june of this year i received a letter this was in response to a letter i had asked them from acting director of nelson stating that 29,284 firearms were covered in mexico and 09 in 2010 submitted

to the atf tracing center with those weapons 20,504 or 70% word united states sourced. the country of origin for the remaining apparently could not be determined by atf meaning that the number could be much higher. what actually is the number now that this was back in june? is that the most current number? is a fair to assume that 70% of the firearms showing up in mexico are from the united states? >> thank you, senator for the question and your leadership on the issue. you've identified the paramount issue we have to face as we deal with the transnational organized crime from the mexican cartels. from my understanding, 94,000 weapons have been recovered in the last five years in mexico.

those are just the ones recovered, senator, not the ones recovered and there's been 94,000 weapons that have been recovered in mexico, 64,000 of those are traced to the united states. we have to do something to prevent criminals from getting those and that is my understanding of those numbers. >> this is a deep concern for me and i know others disagree but we have very lac laws when it comes to guns and i think this to some extent influences bhef and how they approach the problem as to if they have political support or not. but i think the numbers are shocking and i think that when you know the number of deaths of these guns have caused used by cartels against victims it is literally up in the tens of thousands, so the question comes what can we do, and i would

rather concentrate on the constructive rather than other things and so the question comes do you believe that there were some form of registration when you purchased these firearms that would make a difference? >> i do, senator. we are talking to the of the transnational organized crime and your leadership of the chairman and other senators showed that information is the tool we need to challenge and defeat organized crime. today, senator, we are not even permit it to have atf receive reports about multiple sales long guns of any kind of a semi-automatic weapon or the like so they are unable to get that. very few hunters in the united states or sports people and law abiding people need to have a semi-automatic weapons or guns

so today if i go into a dealership and i want to buy 50 or 60 semi-automatic weapons there is nothing that requires that to be in any way notified to atf. without that kind of notification, you lose track and can lose track of these kind of potent weapons and that is just one exit of the kind of tool if he would uncover the law enforcement to help fight this. >> my concern, mr. chairman, is that there has been a lot said about fast and furious and perhaps mistakes were made but i feel fit this hunt for the blame doesn't really speak about the problem, and the problem is anybody can walk in and buy anything, 50 caliber weapons, by them in large amounts and send them down so the question becomes what do we do about this.

i've been here 18 years. i've watched the bhef get beaten up at every turn of the road. it's just not right. we have more guns in this country than we have people, and somebody's got to come to the realization that when it these guns go to the wrong places, scores of death resold and that is exactly the case with the cartel's. so do are saying today if i understand this over five years and recovered weapons there were 94,000. 64,000 of those came from the united states, so apparently over two-thirds of the weapons used in mexico by cartels are coming from the united states. spread that's correct, senator. to make a point of that. in wide receiver which is a matter where the guns were permitted to go to mexico during

the prior administration in the years 2006 and 2007, when nomani team had discovered that we decided we had to prosecute the case because even though years and years earlier the guns had gone to mexico we had to hold the people who felt the guns responsible, and so we prosecuted those people as senator grassley pointed out. but it is clear we need more tools to get those people who are buying the guns illegally transporting them to mexico. we cannot permit the guns to go knowingly and we cannot permit them to go on knowingly. we need to stop the flow. >> what would be the number one toole but would be of help to you? >> i think the number one tool would be if atf were given the ability to know when guns are purchased and frankly i don't know if it is the number one tool, but one of the issues we

are asking for in connection with the legislation we are talking about today is the ability to forfeit the weapons and the inventory of some dealers who knowingly sell their guns to criminals. if we could forfeit the guns of the dealers we can prove knowingly are selling to criminals we don't want to do anything to people selling to the law abiding citizens. but we have to stop the dealers from selling to criminals. >> thank you very much. thank you mr. chairman. >> senator kunes. >> thank you, sherman white house, for this important hearing. we certificate mr. chair some of the things you mentioned, the whole panel did, that the transnational organized crime has brought from its traditional areas of narcotrafficking, bribery, extortion and to perhaps less obvious or less expected areas identity theft, cybercrime, intellectual

property crimes and counterfeiting a whole series of articles have documented how in mexico nine out of ten d etds r pirated and so blatantly so that most of them are stamped with the insignia while familiar with los zetas or two of the notorious drug cartels and according to the to the listened line report gangs in mexico are turning to the dvd piracy because it provides a huge profit margin at low risk compared to other criminal enterprises. what can we do that we are not already giving? what additional resources might be able to offer legal or otherwise to strengthen our activity and to get our allies and partners are of the world to join us in combating pirated tvs or counterfeiting and pharmaceuticals or other areas that have a high profit margin of currently low risk? >> senator, the trend that you described, we see this where as before we had the networks that may be focused on one specific commodity we see this diversification and we've seen

that with mexican cartels as well. intellectual property theft is very attractive as you noted because the sentencing exposures fairly low given the profit potential that can be gained by moving these counterfeit commodities. so what we are doing is trying to partner internationally with our partners in mexico to share information to aid in the introduction of copyrighted material or infringement material. what would be helpless because what a lot of the ways we've built these cases to get to cooperating defendants, so to the extent that we can have more significant penalties the gilpin turnage cooperation that helps us to work a player echelons of organizations that are engaged in counterfeiting. >> i noted that was one of the principal recommendations and something i look for to working with the chairman on.

mr. glaser i want to start by commending your work in combating the financing of the transnational organized crime and terrorism in particular. you mentioned the financial action task force is planning on releasing new international standards regarding the beneficial ownership i think early next year and during the comment period many of the stickers the american bar association, the european part association, the national association of secretaries of state share the concern they were not being meaningfully consulted and they are not actively consulting the secretaries of state and the folks mostly in the bar who will partner to comply with the beneficial ownership standard i think we run the risk of creating a standard that works great on paper in the real world and might potentially put needless regulatory burdens on small businesses of to achieve the real goals. do you agree that we should work closely with those who would be

responsible for implementing its new guidance and what's the tertiary doing to improve that collaboration and consultation in advance of the new? >> thank you, senator. i agree it is extremely important that the atf consult with the private sector and take very seriously articulated by the private sector. as you point out, after all, in the reality check from the type of thing that are going to work and that aren't going to work, what's going to be unduly burdensome and also just have some good ideas about how to make things go forward. i do think the astf the standard that you are referring to and i refer to in my testimony are scheduled to be released in february of 2012, february of next year and in that there is the complication the atf does what i think is even more important for the u.s. private sector is a complication

directly because of the end of the 80 international standards are implemented for the government so would apply to them would be the regulations and the laws and the policies that we adopt in the united states. that's why, you know, in working you mentioned beneficial ownership in particular and we've been working very closely with congress with senator levin in particular and senator grassley is also co-sponsored the beneficial ownership legislation. we -- this has been a multi-year process where we have been working very closely with secretary of state with the private sector to try to understand how this company corporation process works and how we can make it work as a practical matter. so i do think all of that is important and what we are working very hard to do. >> given the short period until it comes out later to consultation with those who do this professionally or as they

are elected. madame chair if i might one must question. >> please go ahead. >> i might, mr. breuer, the context we are talking about here is how bribery and narcotrafficking and the counterfeiting and identity theft and so forth are the expanded reach of transnational organized crime has as your early, and suggested expanded its previous go to the point even some asian states are compromised. later today i will be chairing a hearing on china and africa and how the economic and political situation on the continent of africa mostly sub-saharan africa has changed fundamentally. there are real challenges with counterfeit products with transparency, with trafficking of drugs and human trafficking throughout africa any comment for me in that context how we see transnational organized crime beginning to affect the stability of partner and ally states on the continent of africa?

>> desolate, senator thank you for what you're doing in this area. we have to be very nimble and understand those understand the economic distress are those companies that have less stable governments or you were governments was able to resist the efforts strengthening role of organized crime. earlier this year, along with the assistant secretary of state, i was honored to lead a delegation. we went to liberia to ghana and spoke to leaders in both of those areas on this issue. we have to be careful what the regions do not become beachheads for the cartels. we take their drugs and their other products and try to use different places around the world for staging. we have to be partners with them and liberia i was fortunate to see the beginning of the coast guard that we are helping to build. that's the essential because they themselves get any meaningful way to police

themselves they can do a better job of fighting organized crime, as a way we have to be nimble and we have to continue to develop partnership for routt. >> thank you. >> thank you. senator klobuchar. >> thank you all of you for being here on this important topic. i know that senator kunes raised the issue of the intellectual property which is an issue that i have been very focused on and not just with the dvd that senator kunes mentioned but also with theft over the internet and i don't think people off and realize the relationship between these kinds of hot and organized crime, so i wonder, mr. breuer come if you could talk about what types of intellectual property have been targeted by the groups and what we can do to spread or prevent such crime. >> we think that the transnational crime in today that he identified is a challenging intellectual property and is using computers and is expanding around the

world. what we have to do with more tools you have to empower us as we have asked to bring racketeering cases against organizations and have more of an international reach in doing that because these are sophisticated organizations. i was just in romania last week as i mentioned in the very issue that you're identifying is one that we talked a lot about because of course groups and countries through computers and others are stealing the intellectual property of the united states. but we are bringing many, many cases in that area, and we are going to continue to do it using the racketeering power that we've asked for, money laundering and forfeiture powers have enabled us to continue to have countries around the world join international conventions is the way for us to work hard in the syrian. >> i've always believed that our laws and prosecutors have to be

as sophisticated as the crooks breaking them and this is a new area with the internet and trying to make sure that we maintain people's freedom and a devotee to put things up there but the same time are able to align for the organized crime from the commercial use for making money off of it. in written testimony you propose strengthening from the penalties for violation of the ip law end of the conscious reckless risk of death or bodily injury. can you give some examples with the department of justice has dealt with with such a scenario as that? >> absolutely, senator. time and again even in the last couple of years we have been bringing cases where individuals have taken counterfeit products and try to sell it to our military that is one of the large categories to deal with the infrastructure of the united states that's another major category or dealt with pharmaceuticals or products that we in just these cases just in

the last year i think are at an all-time high, and if i were to generalize these are exactly that whether we are trying to generate cisco products and have them sold for the military air force or computers, whether people are taking products that go to our computer systems more generally we try as hard as we can to prosecute those crimes. but we need enhanced tools and we are hopeful we can get them. >> it is first of all the road website bill that allows the justice department to take down what sites that need a very high criteria but the criteria is being used to steal things basically and also to make the penalties the same as the people selling dvds on the corner which senator coons had brought up, correct? >> yes, senator, i am coming and we are very supportive of exactly those kind of provisions trying to have as comprehensive

approach as we can have to read 64 very much. did you want to add something, mr. kibble? >> those tools are going to be very important for stepping up our fight and online ip theft. there are interesting things in terms of we're up to now 200 domain names that have been seized using existing authorities and what we're doing with that of posting seizure notices. what we found is in partnering with industry they've told us a number of folks that are operating with web sites are used to distribute the counterfeit merchandise have unilateral taken down websites. we also have forfeited about 86 of those 200, and we use that to routt people to go to those republics service announcement that talks about how impacts the american economy in terms of participating and intellectual property theft. these tools that have been proposed and the legislative

have been important for standing up as the bad guys at adapt. .. >> now, current law says that drug traffickers must know that illegal drugs will be trafficked to the united states. so what we have done,

essentially, lowered the knowledge threshold to reasonable cause to believe. i'd like to get each one of your views on that. >> senator, it's -- your legislation, your proposed legislation here and senator grassley's is essential. right now as we've talked about these transnational organized crime groups are very sophisticated and can be very segmented. so you can have an outfit in south american colombia, you can have a separate outfit that is simply responsible for the transmission to have drugs in a certain -- of the drugs in a certain area or for a certain ingredient. right now you're absolutely right. to prosecute you, we have to prove that you knew that the drugs were going to the united states. what we want to do is exactly what you say, and it'll be an enormous tool. if you have reasonable cause to believe that the products are going to the united states and we don't have to prove that you individually knew it, that will

be an enormous tool in us prosecuting the cartels. and more to the point, if you're part of a conspiracy and we can prove that one member of the conspiracy had reasonable cause to believe the product was going to the united states, that will be a tool that will enable us to go after all of the conspirators, and it's essential in our fight against organized crime and against these cartels. so we cannot be more supportive, senator. >> thank you very much. do you differ from that, mr. glaeser or mr. kibble? thank you. i'd better go vote. senator? >> first of all, senator feinstein, thank you very much for step anything as chair for me. as the witnesses are aware, we are now in a voting sequence in the senate, and so senator grassley and i have made the mad dash back and forth to vote in order to be here for a second round. i have to say, he was quite something to keep up with. senator grassley. >> thank you. mr. breuer, i think this'll be

my last round of questioning. were you aware at the time that deputy attorney general gary dependler was breed on operation fast and furious in march of 2010? >> senator, i don't believe that i was briefed on oams fast and furious, and, senator, i do not believe i was aware of that briefing. >> okay. in december 2009, director nelson asked you to assign a prosecutor from the headquarters, and in march 2010 a prosecutor from the gang unit was assigned to fast and furious. why did the number two official in the justice department get a briefing around the same time headquarters assigned a prosecutor to fast and furious? >> senator, i can't answer that. what i can say to you is from the very beginning of my tenure as the assistant attorney general i became very committed to doing everything we could to

fighting the drug cartels and to doing what we can to stop what they are doing. it was in that vein that i offered the southwest borders whatever help we in the criminal division could bring, and that's how the issues you're raising came about. but i cannot tell you anything about the briefing because i simply did not participate in it. >> okay. you said that when you first learned about gun walking in wide receiver, you instructed one of your deputies to schedule a meeting with the atf acting director to, quote, bring these issues to their attention, end of quote. when you first learned about gun walking in fast and furious, did you do the same thing? and if not, why not? >> i did not, senator, and that's what i regret. >> okay. was the deputy who you assigned to meet with atf, jason weinstein, also responsible for authorizing any of the

applications to the court for wiretaps in fast and furious? >> senator, the answer is he and other deputies in my office including the longest-serving deputy in the united states' history who has served for almost 60 years did. if i may, senator, for a moment i'd like to explain what that role is, if you'd permit me. the congress made it clear in law that wiretaps and telephones are an extraordinarily intrusive technique. they're a technique that i support fully and that i think are essential in fighting organized crime and transnational organized crime. and they're why, senator, in my two and a half years i've more than tripled the number of reviewers who do it. but as congress made clear, the role of the reviewers and the role of the deputy in reviewing title iii applications is only one. it is to insure that there is legal sufficiency to make an application to go up on a wire and legal sufficiency to

petition a federal judge somewhere in the united states that we believe it is a credible request. but we cannot those now 22 lawyers that i have who review this in washington, and it used to only be seven, cannot and should not replace their judgment, nor can they with the thousands of prosecutors and agents all over the country. theirs is a legal analysis. is there a sufficient basis to make this request. we must and have to rely on the prosecutors and their supervisors and the agents and their supervisors all over the country to determine that the tactics that are used are appropriate. >> thank you for that explanation. you said in your statement last night that you, quote, did not draw a connection, unquote between gun walking and wide receiver and gun walking fast and furious. you also said that you regret your failure to, quote, alert others within the department leadership, end of quote, of

similarities. what finally made the lightbulb go on for you that the two cases had similar problems? >> senator, thank you for that question. i mean, i hope you know, senator, that i've tried and my division has tried as comprehensively as twoak deal with the plight of mexico -- to deal with the plight of mexico. i'm proud to say that it's my division that is prosecuting the thugs and criminals who killed the three u.s. consulate officials in juarez. it's my division that is responsible for the investigation right now of the murders of i.c.e. agent zapata and the sooting of avila, and it's my division working with law enforcement that has brought 104 mexican criminals, cartel leaders and the like including felix to justice this year into the united states. so every day whether it's an organized crime or white collar crime or cyber crime, we're working. there's absolutely no question, senator, that as i was involved in this exercise and as all of

this has come to light that i in thinking about it realized that i should have back in april of 2010 drawn that connection. i've expressed that regret personally to the attorney general of the united states, and then i determined that i should do it publicly as well. >> i have just three short questions, mr. chairman. when did you finally alert others within the department leadership about the similarities that i just described, and who did you alert? >> senator, i can't anymore recall because of course, by the time that the connection is drawn with me -- >> that's okay. how did you, how did you first hear about fast and furious? >> well, i, well, i first heard about the tactics, about guns being permitted to go to mexico when atf had both the legal authority to interdict them and the ability to interdict them. i first heard of those allegations when the ftfa agents

went public. >> when and how did you first learn about the connection between fast and furious and u.s. border patrol agent brian terry's murder? >> um, senator, border patrol agent brian terry's murder is an absolute horrible tragedy as are the tragedies of the other people who law enforcement and others who have been killed. the only way i learned about any connection there was when these became, when it became public. but, of course, as you know, senator, with respect to many of these tragedies my division has done everything we can to hold the people liable. when cbp agent rosas was killed, i worked personally to bring his murderer to the united states, i attended the funeral, i spent time with his family, and that's why we're working tirelessly to hold the murders of agent zapata accountable and the consulate officials accountable. >> mr. chairman, i have a request of you.

i released a report that i'd like to ask be made a part of the record. it reviewed some numbers referenced early that 70% of the guns in mexico came from the u.s. the answer isn't to clamp down on law-abiding citizens or gun dealers. would you include that in the record? >> without objection, the report will be included in the record. >> thank you, mr. chairman, and thank you, mr. breuer -- >> thank you, senator. >> -- for your comments. >> thank you, senator grassley. we will wind up the hearing now because the votes are underway, and we have, i think, six remaining. i don't think i can manage to continue. plus, we're now through a second round. but i did want to go back to the point i raised initially and ask each of you, obviously, briefly. you're all law enforcement professionals. for you this is a practical problem. evaluate for us and for those

who will be listening to this record how and how much the case is complicated by having an international component. um, there's the initial investigative piece of hailing suspects and getting subpoenas for evidence and doing witness interviews, and that is a kind of traditional investigative piece. there is the electronic piece of trap and trace, pen register, wiretap authority. um, there is often a third scientific piece of putting together forensic evidence whether electronically or, you know, rebuilding a crime scene or reconstructing a fire or something like that. then there's the question of getting access to the criminals themselves, the arrest and seizure of the individual. and finally, there are the asset

protection and, ultimately, forfeiture and seizure parts of trying to make sure that the proceeds and instruments of the crime are claimed and seized by our government. if you could kind of walk us through a hypothetical case, and in those five areas if there are a couple where you have particular specialty and you want to pass off others so we're not repeating ourselves too much, i'll leave that to you to sort out. but i'd like to leave this hearing with a flavor for exactly how what could already be a complicated in the united states under u.s. law with our existing procedures and protocols becomes exacerbated as a challenge when it has an overseas come possibly. mr. breuer, i'll let you go first. >> i'll take a try at that. we may receive some sort of

complaint, maybe it's identity fraud, maybe it's online fraud. it could be really anything. so the fist thing we have to try to do is to investigate that allegation. perhaps we'll try to trace whatever information we can. maybe we'll try to find whether an online vendor or a money transmitter or someone has been involved. it may turn out that we will try to run the names through something that this administration started which is called ioc2. it's a database where we now try to get from all of law enforcement whether from treasury, from i.c.e., from wherever we can to see if we can find other touches throughout. but then we may need to get foreign evidence. our foreign partners vary. some, like romania, where i was last week, are very, very strong, and they're happy to exchange information, and they work well with us. but, frankly, others will not share information. we need it in court. we have to go through the court system, do what's called the mutual legal assistance treaty,

and we have to get it that way. that can take months and months, if not years. we can sometimes follow before byzantine kinds of procedures that we have to do. >> something as simple as -- something as simple as having an agent tail somebody. >> oh, that's -- [inaudible] i have to get -- >> the agent level here, an agent, a supervisor will decide to do it based on a case. that's something you and the department of justice will never see, the u.s. attorney might not see it themselves in the local office, that would be a really where the rubber meets the road investigative determination, and there'd be virtually no administrative burden or complexity to getting clearance to accomplish that task. you want to tail the same person, and you used the example of romania. what's -- >> we have to get the romanian authorities to agree to do that. we have to work with them, and they have to be willing to do it, and it's enormously difficult. not only is that difficult -- >> track and trace. >> right. >> compare trap and trace.

>> well, i mean, in the united states we're able to do that with some efficiency. in countries around the world, there's the entire gamut of what we're allowed to do with respect to telephonic and other kinds of information. some countries will do it somewhat easily, other countries will almost never do it. some countries, for instance, if we identify the criminals will -- won't, will never extradite their nationals. so with impunity unless that country is willing to prosecute the person, we can't do it. these are very huge problems, and that's why -- >> unless you can lure them overseas. >> unless we can lure them overseas, that's exactly right. and that's a difficult issue, we do it, but that can also have international ramifications, so it's something we do only after much consideration. >> from a treasury point of view, mr. glaser, in terms of asset forfeiture and seizure of goods, again, a couple of practical comparisons, if you

could, on how the international element of one of these investigations adds to the burden or challenge that you have to face compare today a pure domestic case. >> well, you know, as has been alluded to a number of times, the international financial system is seamless. it's borderless, it's instantaneous. and people who are operating within the international financial system do so, do so in that environment. so the challenge that we have is that, unfortunately, governments aren't borderless, governments aren't ip stand tape crouse -- instantaneous, governments aren't seamless. we have to operate through treaties, information sharing, other types of agreements. what our challenge is at the treasury department that a we try to do with respect to the international financial system is make it as transparent as possible so that the investigators and the prosecutors that lanny works with on a daily basis have the

opportunity to trace within the international financial system where the information is. and really even more fundamentally, to make sure that the information is there in the first place, to make sure that financial institutions are asking the right questions and keeping the right records so that when there is a mutual legal assistance request that can be made, that the information is there in the first place. i think the biggest challenge we have now, as i said in both my written and oral testimony, is with respect to corporate vehicles, with respect to companies both domestically and internationally, and the use of companies to disguise the true parties and transactions. >> we'd call shell or phony corporations. >> front companies, shell companies. there's all different sorts, and it's not necessarily companies, it could be trusts. but there's all sorts of nontransparent corporate vehicles that exist for perfectly legitimate reasons and in no way do we want to interfere with how these corporate vehicles are used in legitimate commerce. but the fact is they're also

very useful to criminals, and i think there's some common sense things we could do both, again, domestically and globally to insure that when law enforcement investigators and when prosecutors need to know who's behind these transactions, that information's available to them. >> thank you. mr. kibble? >> i pick um -- up on some of the same themes, mr. chairman. the nature of the transnational criminal threat has migrate today a very cellular structure so that frequently in our investigations whether they're counterfeit pharmaceutical investigations, they involve multiple countries and multiple continue knelts. and when you're trying to reduce that illicit flow across our borders which is the perspective which i.c.e. comes at it from, it's getting back to the point point that mr. glaser said, the add adversary that doesn't respect our borders, it's information

exchange frameworks that'll allow us to move every bit as nimbly. a good example, in mexico. during the course of our investigations along the southwest border, we'll develop information that identifies cartel hitmen that are in houses across the border, and we are able during the course of our investigations, we've been able to share that with partners in mexico that we've cultivated that can, that have, you know, arrested those assassins, that have seized grenades, that have seized weapons. and we need to build that across the entire illicit pathway. and that can be challenging depending on the framework and the governance of the particular countries we're dealing with. so it's just trying to build these, the structure that allows us to act every bit as nimbly as the transnational criminal threat we face. >> let me ask a final question, but i'll make it a question for the record, and you can get back to me. but, again, trying to be as practical about this as

possible. as a u.s. attorney even if you have a relatively complicated case, the universe of folks that is involved in that case is your chain of command to the prosecutor who's been assigned it, it is the investigating agency or in some cases agency ies but usually only two or three and usually all, you know, atf working with the fbi on a case, for instance, side by side. and so that's simple and within the district. you have the decon felix to make sure that you're not doing something that somebody else is already into, and you have your relationship with the department of justice if it's a case in which the department of justice needs to sign off at various stages. and that's kind of your universe for doing even a very complicated case. i'd like to ask if you could

pull together an example of a, an international case, maybe one that's been taken down or maybe just pull together a hypothetical one and lay out what the prosecutor in charge of that case is looking at in terms of not only their own chain of command to the prosecutor, not only the american domestic law enforcement investigative agency or agencies, but then the m lap network. if it's not fbi, you've got to get the league involved through the fbi. you've got an intelligence component to it off. you have to have a liaison with the local embassy. there's probably a treasury component. i'd like to kind of be able to almost construct kind of a diagram of what it takes to put all these agencies in the field to mount a really effective international investigation and

how much bigger, um, an administrative group and reach that is than just plain for the same crime if it were entirely domestic. so if i could ask you to do that, is that all right? >> of course, senator. >> good. um, thank you very much. the -- i will put the attorney general's letter to chairman issa and chairman leahy, um, which i don't think i have a date on, but it's the one that refers to operation fast can furious. -- fast and furious. oh, there it is. the october 7, 2011, letter from attorney general holder to chairman issa, chairman leahy and others, and without objection, that will be added to the record of these proceedings. the hearing will remain open for another week if anybody wants to add anything further. i will close by, again, thanking

the witnesses for their dedication to keeping our country safe and to protecting us from the criminal threat that we've always faced, but the international criminal threat that we face now in, i think, unprecedented intensity and in unprecedented means. and your service to your country is much appreciated, and the hearing is adjourned. [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] >> coming up in a few moments, the opening of the winter session of the israeli knesset. in a little more than an hour, a discussion of the future of social security. then, a hearing on how the environmental protection agency regulates pollution from power plants. and later, the hearing on international organized crime. >> several live events to tell you about tomorrow morning. prime minister's question time from parliament in london is an hour earlier than usual at 8

eastern here on c-span2. and on c-span3 at 9:30 a.m. eastern, tsa administrator john pistole testified before the senate homeland security committee about aviation security including screening passengers and cargo. >> when i got into the public and finally started to sell my books, every person i worked with i had a rejection letter from which was kind of cool. oh, we love your stuff, and i was, like, what about this? [laughter] >> in his nonfiction, ben mezrich questions the motivations, ethics and morality of brilliant people. his account of mark zuckerberg and the creation of facebook was adapt today the screen as "the social network." "bringing down the house" followed a group of mit students in las vegas, and his latest "sex on the moon," tracks a possible nasa astronaut. now it's your chance to ask the questions. call, e-mail or tweet ben

mezrich live on "in depth" sunday at noon eastern on booktv on c-span2. >> the israeli knesset began its session this week with prime minister netanyahu calling on the palestinian authority to stop making unilateral moves. he also said israel needs to remain strong to counter iran's quest for nuclear weapons. this is a little more than an hour. [speaking hebrew] >> translator: the honorable president of israel, shi monoparis, honorable former president and his wife, former first lady, mrs. hert sog,

speaker of the knesset, reuven rivlin, members in the present and in the past, former speakers of the knesset, ombudsman and the legal counsel to the government, families, our soldiers, our missing soldiers, the heads of the religious -- religions, honorable ambassadors and the citizens of israel, my friends, the knesset return to the winter session while original events -- regional events that are the most dramatic in our generation, the

arab strength has awakened, old regimes have fallen, and additional regimes are wavering, and new regimes are starting to rise. [speaking hebrew] >> translator: nobody can guarantee their quality or their stability of these new regimes. and nobody can guarantee their attitude toward israel. i must say this attitude was never great, and regretfully, it is not expected to improve. most of them, of these regimes are not in the short term. the new regimes are dependent in the mob, on the mob that many of

these in the mob were instigated by anti-semetic and antizionist propaganda. this started even before the establishment of the state of israel and is cometting to this -- continuing to this day. with the results of the elections in tunisia, if they serve as an example of what will come in the future, we can expect that there will be components with a dominant islamic component. and most of the countries surrounding us, the islamic movements are the most organized and the strongest. and the labor forces that would like to see progress as we see it, these forces are divided and weak.

with the religious extremism will not moderate, it is doubtful with -- whether the hopes of the arab spring will be realized. maybe it will have to be delayed, maybe for a generation until this new wave will pass by. and until the progressive movements will give, be given the opportunity to lead the arab world in a new path. my friends, if i had to summarize what we can expect in the region, i would used two terms; instability and uncertainty. [speaking hebrew] >> translator: the fall of gadhafi in libya and the exit of

the american forces in iraq, the new government in tunis, the upcoming elections in egypt, all of these express the great changes that are taking place around us. these changes can increase the instability within the countries, and the instability among the countries. there are regional powers, and these will try to increase their influence on the new regimes. and this influence will not be to our benefit or for us. in one of these regional powers is iran who is continuing to armor itself in nuclear weapons, nuclear iran will constitute a threat on israel and the entire

world and especially on us. [speaking hebrew] >> translator: vis-a-vis this uncertainty and instability before us, we need two things; strength and respondent. responsibility. strength in all areas, security economically and socially. and responsibility in maneuvering the boat of our country in the stormy water that we are, we find ourselves. [speaking hebrew] >> translator: i'm asking that you do not disturb. we must continue to build the force of israel in all areas of

security in order to provide an answer to all of our challenges. in the last few days, we found out that one of these challenges is contending with many thousands rockets and missiles that are disposal of our enemies. [speaking hebrew] >> translator: the, these my styles and antimissiles only give us partial solution and, certainly, provide security for our citizens, but we want to deploy other systems in the rest of the country. but this concept cannot rely only on defense, but we have to also depend on our ability to attack which is the cornerstone

of deterrence. finish we will -- we will act with determination gwen those who threat -- against those who threaten the security of israel. [inaudible conversations] >> translator: two things guide us. whoever wants to kill you, you kill him, and whoever attacks us, blood will be on his head. [inaudible conversations] >> translator: knesset member -- [inaudible] i'm warning you. [speaking hebrew] >> translator: knesset member -- [inaudible conversations] don't disturb. [speaking hebrew] >> translator: please, listen to the prime minister. please, do not disturb. for 2,000 years our nation could not implement these two principles to protect itself.

these two principles of defense and the jewish people paid the heaviest price because of this inability. all of this has change with the the establishment of the state of israel and the establishment of the idf. government of israel acted according to these principles. they fought those who threatened ask us and attacked those who attacked us. since i became a prime minister, i instructed the idf to act against the terrorist organizations. this is how we acted against the terror i attack from the sinai -- terrorist attack from the sinai. the person who initiated it was liquidated several hours afterwards, and this is how we acted in the end of last week, and this is where we should

thank again the idf soldiers and the people of, in the intelligence community who work tirelessly around the clock in order to protect our country and to protect all of us. we will continue to act with all our strength to protect us, and we will continue to act responsibly vis-a-vis this complex reality. view spriew. [speaking hebrew] >> translator: an expression of this complexity we saw several months ago -- [inaudible conversations] [speaking hebrew] knesset member -- [inaudible] knesset member chief i have, i am calling you to order. >> [inaudible]

>> translator: i'm calling you to order. i'm calling you to order. [inaudible conversations] [speaking hebrew] >> translator: knesset member -- [speaking hebrew] [speaking hebrew] >> translator: now the prime minister is talking. [speaking hebrew] >> translator: it could be that maybe some of the knesset members didn't pay attention that we are in a complex situation. we saw it two months ago that

when a mob attacked the israeli embassy in cairo, this mob didn't care whether we have an agreement or not agreement. these were very tense moments and very complex moments. and i would like to thank minister barack and minister lieberman that we acted together with the american government and with the egyptian government, and we brought this event to its, a successful completion, and we were able to bring the families back home. [speaking hebrew] >> translator: this reality that changes fast in our region, it poses many obstacles and also many opportunities. that we cannot see.

[speaking hebrew] >> translator: in this changing world, israel is becoming fast a leading force in the cyber world, what is called the computer wars. and our special capabilities in this area -- [speaking hebrew] [speaking hebrew] >> translator: these special capabilities of israel bring many important countries to want to cooperate with us. this provides us with an opportunity to have new partnerships that did not exist in the past, and i expect that in the future it will become a very important factor in the international arena.

in order to strengthen our capabilities in this area, i establish a cyber headquarters. this is the future, and we are already there. [speaking hebrew] >> translator: ladies and gentlemen, please, do not disturb. knesset member -- [inaudible] [speaking hebrew] [speaking hebrew] [inaudible conversations] >> translator: knesset member, please, leave the session. please, leave the hall. ladies and gentlemen, please, do not disturb the prime minister.

[speaking hebrew] [inaudible conversations] [speaking hebrew] >> translator: this what is required to protect israel is also the key for our striving peace. you make peace with the strong and not with the weak. the stronger israel will be, the peace will be closer. the nation, the people in israel is united in it desire for peace -- in its desire for peace, but we are seeking true peace, peace that is based on the recognition of the jewish people to a national country. it's based on security. we are willing to have

compromises, but we do not intend even before the earthquake in this region, i insisted on our security needs and more so now. in the negotiations for peace, we will insist that our national intres primarily -- interests primarily the security. they said about me that i am a tough negotiator. i know that it was said in the criticism, but i see it as a compliment. and, therefore, i want to say to the head of the palestinian authority, president abbas -- [speaking hebrew] knesset members, i'm calling you to order. [speaking hebrew] >> translator: knesset member, please, do not disturb. [speaking hebrew]

>> translator: i want you to show restraint. [speaking hebrew] >> translator: i'm calling you to order. please, remove knesset member mullah. please, do not disturb the prime minister. [speaking hebrew] [speaking hebrew] [inaudible conversations] >> translator: i want to tell president abbas, i'm not tough regarding the peace; i'm tough regarding the security of israel

and its citizens. and i will continue to act like that because this is my uppermost obligation and my basic obligation as the prime minister of israel. i'm willing to have true peace with our neighbors, but i do not intend to endanger our security. [speaking hebrew] any peace agreement has to be accompanied with security arrangements, otherwise it will not hold. and for the negotiations to be completed, we need to begin it. i call the palestinian authority and leadership to start direct negotiations. i call them in my speech in -- [inaudible] university, in my speech here in the knesset, i called them to do so in my speech in the american congress and in the last time i

spoke at the u.n. and many other times in between. and i responded positively to the quartet proposals. i must say that, regretfully, the palestinians continue to refuse to negotiate directly with us. instead of sitting with us at the negotiations table, they preferred to ally themselves with hamas. we will not sit by idly while these steps that hurt israel which violate the basic commitment that decides to solve the dispute between us through negotiations. while we are supporting the

establishment of a palestinian state, the palestinians are striving for a palestinian state without a peace agreement. this is the reality, and everybody knows it. [speaking hebrew] >> translator: and i do not intend to agree with it. and no responsible leader would have agreed the it. our friend, the united states, the strongly supporting us for the pal stint yang interaction in the u.n., and we greatly appreciate it. and i know there are those who doubted our relationship with the united states, but the alliance between us is strong, and the cooperation between us

encompasses many important areas. this alliance is based, this alliance is based on deep support by the american people on, based on common values, common objectives. and this support is getting stronger in the last few years. [inaudible conversations] >> translator: the united states see like we do the great importance, the noncompliance of our agreements with egypt and jordan. it's in, it is of israel's

interest to keep the peace with jordan and egypt last year. we strengthened our cooperation with many countries in the region from greece until cypress and as far as turkey. we saw that when there are disputes between us, we assist one another during troubled times as a result of natural disasters. this is how turkey acted when we had our great fire, and this is how we acted after the earthquake that happened in turkey. i hope that we will find in the future the way to improve the relations between the two countries; strength and responsibility is what guides

us. and the same tools we need to contend with the economic challenges. economic and social challenges. in the last few years, in the last few years the world economy has upside gone great -- undergone great changes. the water -- there is a storm, there are many western countries that did not act responsibly and didn't pay attention to the danger. [speaking hebrew] >> translator: did not do what was needed. they find themselves at the brink of bankruptcy. it's not -- if not, thousands are unemployed. until now this economic storm has not -- israel has not end

countered it. -- encountered it. and the way we acted economically contributed to it. there is a rule that everybody knows that's over time whoever spends more money than he gets, gets to be bankrupt. this rule that is true for the individual is also true for the country. many countries forgot this rule, and that's why they pay dearly for it. israel acted differently. we acted responsibly. israel acted responsibly. this is how i acted when i was the minister of the treasury, and this is how we act today. but we cannot create growth

which is essential for creating jobs, growth that is essential for the resources for health and society, we cannot create it only by guarding the budget to grow the economy. we have to cultivate competition, not monopolies, but competition for the benefit of the consumer. the competition is not an enemy of the consumer. it improves services, it reduces gaps, and it increases the standard of living. and the fact that we do not have competition in israel is why our cost of living increases. and this is why a year ago i established not a few months ago, but a year ago i established a committee of centralization.

and, therefore, we are now implementing the recommendation about competition in the economy. yesterday we canceled the, um, taxes on gasoline, and we reduced taxes on consumption. , and we, and we increased the assistance to young couples. but these are only first steps. it's our intention -- [speaking hebrew] >> translator: i'm happy that you all want to help. we intend to bring decisions in the knesset to assist the citizens with responsibility for

educating the young will cost less. also taxes will be less. i am very aware of the, all of the distresses you spoke to us, mr. speaker. i am committed to solve including decisions that we will pass in the knesset in the present session. [speaking hebrew] senate i promised you an answer, knesset member. we are committed to act with full sensitivity to change our priorities, but i do not accept the claim that the free

enterprise has bankrupt, that we have to go back to centralized system, an economy in which the citizen has to be, to comply with the bureaucracy. we were already there, and we not go back there. this is how you destroy the country. [speaking hebrew] [speaking hebrew] >> translator: i'm going to have to ask you to leave the session. you cannot disturb.

[speaking hebrew] >> translator: if you can't -- [speaking hebrew] >> translator: knesset member, knesset member takes care of the social needs, but we have to create the resources, we have to have a free competition. we have to finish this is exactly -- and this is exactly what are doing and intend to do. in the infrastructure -- [speaking hebrew] >> translator: and also to invest in the periphery of the country. yesterday, we inaugurated a new medical school. knesset member, i'm calling you to order.

[speaking hebrew] [speaking hebrew] >> translator: there are people that talk all the time, but we can't go on like that. [inaudible conversations] >> translator: knesset member -- [inaudible] knesset member, don't you understand what i tell you? yesterday we dedicated and suffered together with you, mr. president, a new medical school. this is a great message to the galilee, and soon after a decade of promises we will move the idf

bases to the south. and this is a good them to the the -- [inaudible] we're a government that does and not only promise bees. promises. we built new bridges, new roads, and we take the government, the country out of the gridlock. yesterday i told them that 91 years ago my grandfather and father went there, they got there from jafa, fs that was in tel aviv at that time. they went on the train to tiberius, and there they took all their belongings, and they took a boat and went to tiberius. and then went on the road through a difficult route to go

to rush peen that, and then they had to change to horses. and this trip took, this trip took three days 91 years ago. a few years ago it took three hours, and i asked the mayor, how long does it take him now. it takes one hour and 40 minutes, and i told him now it will even be reduced further because soon all the roads system will change. in our vision there will be a route without any stop signs, and it hasn't been done. we are doing it. [speaking hebrew] >> translator: knesset member, i'm calling you to order.

i'm asking you to leave the session. please. [speaking hebrew] [speaking hebrew] >> translator: knesset member, please, leave the session. please, don't come back. you violate all the rules of the knesset. [speaking hebrew]

>> translator: remove her immediately. remove her immediately. [inaudible conversations] [speaking hebrew] >> translator: knesset member, don't ask me questions. no more questions. [inaudible conversations] [speaking hebrew] >> translator: thank you. [speaking hebrew] >> translator: our objective to strengthen the periphery, but in the end when travel time most parts of the country will be so short we can do away with the

concept of periphery. there's no -- country is large in spirit. we are talented, but physically we are a small country, and it is no reason that in such a small country some parts will be disconnected, separate. [speaking hebrew] >> translator: and, therefore, besides the roads and the trains and whether you want to admit it or not, the great work we're doing, we are developing greatly the galilee and the negative give, and this is how we will improve the lives of our citizens. that when all of the citizens of the galilee and the negeve, this is an important step that the

social revolution that we are implementing is in education. and many years that we went down in the first time because of the reforms that we implemented, we already see a change in that trend. we see improvement in the test scores of the children of israel. and we initiated two year ago nobel laureate professor -- [inaudible] warned that investment in education, she is fearful that there will not be here more nobel prize winners. [speaking hebrew] >> translator: and we took, and i took what she said seriously.

and professor tractenberg decided to assist in the revolution in higher education. we invested more than seven billion and, therefore, i was happy to hear from the new nobel laureate, professor danny shaveman, that he identifies a change in the direction of our government. and he is correct because, because between the winning by professor -- [inaudible] we initiated a new program and, therefore, i want to promise you we will continue to invest, and we will have more nobel prize

winners. knesset members, i spoke today and not very successfully about strength and responsibility. and i want to talk about something that connects both of them; the unity. two weeks ago we returned home -- [inaudible] after five years that he was in prison with the hamas. like the rest of the nation, i was also very excited when i saw gilad going down the plane. and for several days the entire nation was unified, united and

excitedment dr -- excited around one soldier we returned home. last week released in recognition we egypt and with the assistance of the american government -- [inaudible] [speaking hebrew] >> translator: thank you, israel. [inaudible conversations] >> translator: knesset member -- [inaudible] last week we released ilan -- [inaudible] who came from the united states and was wounded in the second

lebanon war. we will continue act to release release -- [inaudible] in egyptian jail and i will continue to ask knesset members to tell you and to the nation of israel, i am not forgetting but for, even for a moment jonathan pollard who is sitting in jail in the united states for 26 years. we will continue to act to bring him to israel, and we will not stop asking what is the fate of our missing soldiers. the unity that brought us to act for one soldier proves our

nation to unite, it manifests our strength, our responsibility and to our mutual guarantee. i believe in the strength of this committee, also in moments of test in the knesset, i believe that despite the disagreements between us we will know in moments of these tests to act together for the important and common objectives to all of us. we will follow strength and unity. we have one country, and together we will guard it. thank you. thank you, prime minister. [speaking hebrew]

>> translator: knesset member -- [inaudible conversations] [speaking hebrew] >> translator: all these questions ask later. i'm inviting the head of the opposition, knesset member tzipi livni. knesset member, knesset member. the head of the opposition is going to talk, please. [speaking hebrew] >> translator: honorable president of israel, vice president of's reel, judges of israel, speaker of the knesset,

the head of the protest in israel, this is a session the honorable, the ministers of the knesset government. in the beginning of this session for if netanyahu government,s israel is us -- israel is isolateed a moment before the arab spring will bring about stormy rain. israel is a moment before the only partner for settlement will disappear. israel is after the hamas guard

strengthened and will take control of somalia. israel is just a minute before the concept of two states will disappear, and there will only be one state, and the jewish state will disappear. israel is at a state when the my my -- the middle class protested and before the young people leave. israel is a moment before we become one cup of many -- one country of many tribes where each tribe determines its authority and law and its religious law. and this conflict is under the surface and will come up in the most difficult times. [speaking hebrew] >> translator: it's true that things look okay when there is

not terror. the palestinian authority seems so distant. and when we seem to have government stability, it seems in government all is okay, but we deserve better. we deserve better in every area; politically, socially and also economically. we deserve to be proud of israel, but we do not deserve to see the state of israel isolated unnecessarily. and israel is very isolated today. [speaking hebrew] [speaking hebrew] >> translator: i believe that we must reach a settlement based on two states because this is the

only way to guard the values of the state of israel as a national home for the jewish people and being a democratic state. but now that when -- [inaudible] also says two nations, i'm hearing that we cannot making progress because of the security. so let's talk about security, mr. prime minister. [speaking hebrew] >> translator: because we deserve security. we're all aware of it, that the arab spring could become the beginning of islamic winter. we shouldn't close our eyes. but what are doing in this matter besides warning the public. don't summarize what will happen to us.

we already have a minister or of defense. a minister of defense. you should start doing something with the state of israel will do, the message that we give to the world has a significance, and the difference regarding the future of israel is between catastrophe and hope. knesset members, always israel led the alliance of the moderates. the other nations changed according to political changes, but the basis always stayed moderate. the peace with jordan and egypt, our alliance with morocco, turkey and the -- [inaudible] and all the bodies like the palestinian authority and not the hamas.

but it's true that a bad wind is blowing in our region, but a bad wind is also blowing in jerusalem. these are the true partners of israel. maybe not your natural partners, but these are the natural partners of the state of israel. and i admit that when you put the turkish ambassador, i do not understand what is the objective in insulting, insulting marvin. does somebody feel better by insulting him? is the objective to cause that we don't have a partner so that you can say that we don't have a partner? are you saying this government that we should counsel the palestinian authority because they fight us in the u.n.?

i'm opposed to the -- [inaudible] appeal to theup, and the prime minister was right to enter the u.n. and spoke at the u.n. and it's not good for israel that they were accepted today at unesco. but you, things continue to happen to us. when israel does not initiate, things happen to us. do you get comfort if u.s. will give badges to unesco and not when i sat here and listened to the prime minister, i also saw how the prime minister configures not to cooperate with unesco. we continue to isolate ourselves, and when you talk about responsibility, ask yourself quietly, ask yourself quietly do you have a little bit of responsibility to what is

happening to the state of israel? we must remember that the negotiations is preferable to the diplomatic battles. and the diplomatic battles, their fate is determined ahead of time, it is preferable to war and terror. but in the meantime, the one who gets stronger and gets the message that it's worthwhile to execute terror is the hamas. since the establish of this government, the hamas has gotten stronger. the hamas is more legitimate. again, you conduct negotiations about ceasefire, and you already started to call the chief of staff of the hamas.

and the hurtful truth that israel is then being to those who operate terror and acts against those who want to cooperate, negotiate with it. and the result will be that the hamas will be in control of judeo ya somalia, and then we will not have a partner was we have no -- because we have no chance to reach a settlement with the hamas. spriew prove. [speaking hebrew] >> translator: the idea of a strong army and its ability to act is hurt, and its hands are tied because of ther responsible behavior by the prime minister.

the prime minister whose election campaign was to be strong with the hamas. you, netanyahu, you're not strong with the hamas. the idf is strong with the hamas. i am imagining what will be their campaign. that how we act, what will the other nations do vis-a-vis hamas? this government acts in the opposite way. instead of acting against extremists, we strengthen them. we strengthen the extremists, and weakens the moderates. you're a tough negotiator? you don't negotiate. there is no negotiations. and it's not because of toughness and because of safeguard in the principles of the state of israel. because every day israel gets

weaker. [speaking hebrew] >> translator: knesset member, please, leave the hall. please, leave the hall. knesset member -- [speaking hebrew] >> translator: please, leave the hall, the session. [speaking hebrew] >> translator: ladies and gentlemen, knesset member -- [inaudible] there is an opportunity to correct it, it's not too late. we are after the deal that returned the soldier that was abdicated, gilad shah lead and the excitement, the tears and

the unity and the happiness that had come to all of us. it is clear that the hamas became stronger because of all of it. one connection you can make now, mr. prime minister, the more prisoners that that should be released. please, don't give them to the hamas. give them to the egyptians who will coordinate it with -- [inaudible] [speaking hebrew] >> translator: knesset member rivlin. [speaking hebrew] >> translator: if i have to press those who attacks us, i prefer those who deal with us diplomatically. that one thing that we must once and for all, that we need to

understand it's not a matter of weakness. the only thing that can take us out of our situation, the only thing that can provide security to the state of israel, that can take israel out of its isolation which will remove the -- israel from the agenda, israel must to renew the alliance of the moderates and to start negotiations with -- [inaudible] this is the outer most israeli interest, to block the hamas and the terrorist organizations politically. and this we will achieve immediately with negotiations in the short run. and i hope that we can reach a

settlement so we can guard israel as the national jewish state and in such action you find us in kadima supportive and will allow you to do anything you can if you'll only want to implement those who seek peace will get it. if this is what you will want us to do, i can promise you they will also open negotiations with you. because i can tell you that it's not pleasant for me that they do not believe the prime minister of israel. [speaking hebrew] >> translator: and this can come out of -- [inaudible] but my call will not be heard. so don't listen to me, mr. prime

minister, listen to the security people in israel. listen, mr. prime minister. [speaking hebrew] [speaking hebrew] >> translator: listen, mr. prime minister, what the security people are saying, and listen to them in all areas regarding the palestinian issue. start negotiations for the security of israel. listen to them regarding the turkish matter, and settle the differences with turkey. and there is the formula that

can bring the relations back to what they were. and listen to them, also, in the iranian matter. i believe in all my heart that the strategy that is integrated with pragmatism is critical for our future. such a process will impact the quality of our lives and our economy. and don't use the protest. this is a protest of one. we cannot talk about social justice when many years there is no justice, and it is not accepted by the israeli society. and this is the discussion that we all have to hold. knesset members, it's true that

i devoted to the political arena all my efforts, and this is why i entered politics. but also i am like many others, i was arisen by the -- i woke up by the protests of the young people and the cry of the middle class -- [speaking hebrew] [inaudible conversations] >> translator: we are all open to the difficulties of many young, talented people, young people like my children and their friends and many thousands of young people. and i want to tell you today to thank you that you forced us all to put on the table, to put our viewpoint also this these matters and not only to put,

talk about political matters. our view point exists. we don't have to reinvent it. but the time has come to make decisions in these areas too. and we deserve better, also, in the socioeconomic arena. in israel and the entire world, many young people and the middle class protested and asked for a change in the economical system. the capitalism has bankrupted, centralization is suffering, and the -- we do not get education. the middle class doesn't get the essential education, free education, the ability to acquire an apartment. and, therefore, we must change the economic system. but we should not while we do that change to throw the baby

with the bath water and not, mr. speaker, not everybody is the same. the two theories that we experienced, the socialism that destroyed the private initiative , we don't intend to return to it. [speaking hebrew] >> translator: and the hand of net netanyahu has to disappear more than any government beforehand. the government of netanyahu according to his world viewpoint has not held its responsibilities to the public. the public sector that he has contempt for all the services for the public have disappeared. i group up in the private sector, and -- i grew up in the private sector, and i always believed that with initiative,

hard work a person can go far. i also believe in equal opportunities. [speaking hebrew] [inaudible conversations] [speaking hebrew] >> translator: i also believe in the commitment of the government to its citizens to live honorably. we're not talking about charity, but about justice. i believe that's true. i believe in free markets and even when you privatize, you do not remove the responsibility from the government.

liberalism is not one-dimensional. competition should not be cruel, and free markets is not wild jungle. the economic crisis taught us that it's not enough to have a successful economy when there is no equality. it hurts the society, and society is in danger. without involvement of the government, all of these achievements can reach the abyss. there are areas that we cannot leave for competition. there are areas that government should show responsibility. but to be this charge of -- but to be in charge of everything, the government has to dictate the policy. and policy, mr. prime minister, is not the same conduct with the

mayors as who's for us and who is not for us. the same philosophy of what was many years ago -- [speaking hebrew] [inaudible conversations] >> translator: in the last few months, we're talking about solidarity. as a liberal who believes in the, believes that solidarity cannot be dictated, solidarity cannot grow in a government where the public is neglected. ..

the middle class has been neglected especially by this government. the in what kadima feel responsible to all, and represent the middle class and to return the threat of the israelis in the government we have. what a change will be if we prevent a new budget with new

priorities that tend to avoid such a budget and will try introducing things in the case that you're intentions are not serious, mr. prime minister, and for that reason, kadima has asked for a budget with new priorities. don't be afraid to conduct this discussion, don't be afraid that your coalition partners will blackmail you. we will work with you know and to decide the new priorities for the state of israel. your witness of the coalition can not after the last summer we

decide on a new budget with new priorities and thanks to your sitting in this chair. in this session kadima will start the revolution. we will introduce new legislation in the area of education, equal the the government cannot give it to private sectors we believe in free education since the early age and this is how we will be able to have the good as release when every center costs more than 3,000. [inaudible conversations]

you are disturbing. in the area of housing, the protest was started because the problem in housing and me. the government promised but didn't do anything. we will lead the legislation about housing and we will advance the matter and we will take into consideration the ability to earn a decent living. we will try to cancel some taxes with like the value-added tax

this is only the beginning we do not intend to only be satisfied with its social justice is more than what we have achieved so far and there is no social justice if there is no justice for all. i believe in corporation, i believe that every and israel must contribute to the country and whoever does not serve in the army should devote a year or two of his life to a civil service in his command your other communities. the quality is one of our values, but we are talking about an exhibition of -- expression that we are all so proud of in the last few days.

and then, mr. president, then we can also start that more arabs and ultra-orthodox will work and participate in the workplace, there for the kadima party will bring and push legislation that will define what this civil service for all its citizens, and to act against those who try to start life without committing the same obligation, and i also want to say something to the protesters today.

i heard that there were disputes, arguments whether to sing the national anthem instead of giving up on the symbols of israel, let's determine its values. these values will be integrated with a national people that will hurt the minorities. let's anchor the values of israel and not only this in social justice it's also part of its value. my star of david is not the one that is next to the hateful

writings and my home judicious seóul is not an accident of the other but expresses the same hope that is implemented in each of one of us could identify with friends, let's not be satisfied by just lowering prices, but changing the the society and let's struggle to get their. and decisions will be made in all areas as difficult as they are. even despite this government.

now a discussion on the issue of

social security. from washington journal this is 45 minutes. >> the future of social security is our topic and our guest is joseph minarik, the vice president director of research at the committee for economic development and also remains active as a member of the bipartisan policy center debt reduction task force. so let's just begin by walking through social security. what is the social security trust fund. >> social security was set up as a pay-as-you-go system, in other words the taxes and the benefits were supposed to be approximately equal but there was always an understanding that social security would need to have a reserved it was the home for the reserve and the question then arises what do you do with the excess funds in the reserve for and the decision that was made was that the safe thing to do was to put the reserve into

the u.s. treasury securities. when these are not marketable securities. you can't buy them, the trust fund can't sell them but they do byrd rm a rate of return equal to the average of over the maturity spectrum of the existing marketables social security treasury securities. >> host: how did the access get into the trust fund in the first place, taxes and beneficiaries? >> there's always a plan to have the reserve and the question is what do you said the texas to be relative to the benefits people are going to get. it was deemed prudent that the trust fund had a reserve equal to about one year worth of benefits because the economy weakens the, you can be in a situation you might need to make a modest drop all. in the early 1980's, they got to the point where the fund was so

depleted that the calculations of the time had had the trust fund in the program at one point within a month of not being able to pay benefits because it was so low. so there was then a reform of the system which involved a billion dollar increase in the social sector programs of operating surplus, and at that point a significant trust fund balance build up and we are now at the point that's beginning to run down and that's why we are having this conversation. >> host: right because the "washington post" sunday many people so that when social security adding billions to the u.s. budget woes. last year the debt debate or the debate over the runaway national debt to gathered steam in the washington social security as a treacherous milestone. it went past negative. is that the national security or the trust fund? >> guest: here we are talking

about the operational of the social security program and cash negative characterization is a comparison between the tax revenues that are coming in and the benefit payments that are going out. so what is happening at this point is because the benefits are now greater than the tax revenues coming in and that is projected to go on forever at this point unless there is some kind of a change in the system. we are now at the stage where the trust fund to make up the difference has got to take its treasury securities, give them to the treasury itself and in exchange for this give me cash. treasury to be able to do that the treasury has to go off and sell securities on the open markets so we are now the stage where for social security to pay its benefits on a monthly basis it must -- the treasury must

borrow from the public to get some of the cash and that is the cash - situation that is described. >> host: borrow from the government. >> guest: bar from the public. >> guest: >> host: out of the trust fund you think. >> guest: what happens at the end of the day as the trust fund securities are redeemed. the treasury itself, not social security, not the trust fund but the treasury must sell plain vanilla every day and marketable treasury securities to the public to raise cash to get to the trust fund to pay the trust fund for those securities so at the end of the day when the exchanges done the treasury is borrowing from the public to pay social security benefits. >> host: we hear that all the time that it solvent and it will be. >> guest: the social security trust fund has a fairly significant balance. the current estimates have

balance in the trust fund lasting until something like 2035 however you can't wait that long because of course when you get to the end of that process you're in the kind of situation you were back a couple of months ago and we had a debt limit crisis. this is not the kind of situation you want to about to come to a dramatic conclusion. it would be better off for all concerned if we made adjustments so that we didn't come to that moment at the end of that process. >> host: what policies, recent policies have led to the situation that social security is now cash negative? >> guest: the biggest change in the last four years has been the financial crisis. which of course is not a policy, but there was a significant difference in the situation for social security. if you go back just two years

and this is after the crisis was actually known, the understanding at that point is that this cash negative point was not going to come for another seven or eight years so the downturn in the economy resulting in a financial crisis has shifted a lot of things dramatically one of them is the situation in social security. >> guest: >> host: explain that more. people are unemployed therefore you don't have social security taxes coming in. >> guest: one point is the people who are not in play are not paying social street taxes. this is when you get into such a mission that we have in the economy today is that people that lose their jobs in the early 60's take their unemployment benefits, get to the point where the unemployment benefits are essentially gone and unemployment benefits are

not terribly generous to start with the extended benefits for a while, but there are folks who get to the stage where they believe that the best eventually cut the best choice they have is to retire early and began to collect social security benefits so we have an increase in the number of retirees as the result of the economic slowdown. >> host: instead of retiring at 65 the retiring at 62 and. >> guest: these are folks that we have very well planned to work longer and they find they don't have the option. folks in their early sixties are not the people who lead to the top of the few jobs that are available because people's employers figure and this isn't necessarily the nicest thing in the world to think about somebody 62i invest in this person to get him up to speed on

this job three years from now he's going to retire anyway. shouldn't work that way, but particularly if you are 62, if you send out a lot of reza mazar and nobody answers hey i am wasting my time, social security is the best option i've got i'm going to retire early instead of working leader as i always wanted to do. >> host: lit to give the facts on social security. the trust fund about 2.6 trillion is where it stands right now. the beneficiaries in 2011 about 59 million people, by 2035, that number is likely to jump to 91 million. 49 billion deficit last year in social security. 46 billion projected deficit in 2011. taxes imposed on income up to $106,800. after that, no social security tax, is that right?

then there is a one year tax holiday cost of about 105 billion. how much is that impacting social security's solvency right now? it makes the trust fund whole for that loss however that is a shortfall that in the longer term it weighs on the overall budget. >> host: phone calls are lighting up for you. let's get to them. democratic court in san diego you are first to the future of social security. >> caller: thanks. i noticed you mentioned the 106,000 in come the people are taxed on. how many years of social security be solvent if congress stopped and started taxing everyone on all their income? >> guest: you have to be sick trees is on how you do that. one way is you tax the additional earnings and pay benefits on the those additional

earnings that would not solve the problem. the other option is you tax people on those additional earnings and you don't pay benefits on those additional earnings. that would solve the problem for a nanosecond. social security would be in balance this year when you got to next year and reassess where it stands and he would say you did not have 75-years-old and see. this is an issue that has been argued back-and-forth for a long time. the icons of supporters for social security one by the name of bald who passed away three or four years ago who was one of the negotiators a 1983 social security settlement. he was adamantly opposed to increasing the payroll tax ceiling without paying benefits on the additional contributions

people would make. his argument was personally i will just say i think it is a sound argument. when you get to the point where you are not providing individuals with a return on the contributions they make however small you don't get something paying an additional contribution to the system you get into the zone people start talking about whether this is in fact a retirement program or a welfare program. the with all this program and that is one of the most important things the federal government does. it's absolutely essential and the financial crisis makes that very obvious right now this is a program that the american people need. if we get to the point we do not have the strong consensus we run the risk that at some juncture out on the future we start making changes that take the

program apart. in the interest of fairness i think we want to look at this in the sense that when people make a contribution to social security they do get a return on that money. >> host: currently what is the return on that money? if you have paid into social security your whole life, how much on average are people paying in versus how much they will get out of the are retiring at 60-years-old and living in 30 years, 30 more years. >> host: >> guest: it varies by income. the average retiree is getting a small inflation-adjusted positive return on the contributions. upper-income retirees get somewhat less. i'm not absolutely of to the minute on these calculations but when you get to high income earners over a lifetime, it may very well be that the return on the contribution is an inflation adjusted terms getting down to

zero or even negative. it's important to keep in mind though that the retirement system is only a part of what social security does. we also have disability protection which can be very important for people particularly people who do physically demanding work. at the current time i believe there are about 20% of all beneficiaries are actually disability beneficiaries and their families as opposed to the retirees and their families. there is also the survivors program for family breadwinners who died before reaching the age of retirement who have children below a certain age, so there's a kind of insurance benefits. we do speak of social security as a social the insurance program and it covers more contingency is the only retirement. >> host: what was the of original intent as far as what people pay versus what they will get out?

>> guest: it's not clear from the history just how far people were able to project what was going to happen social security and one of our plans you made in 1935, world war ii kind of through all that stuff for a loop. however, the beginning of the program you have which you might consider to be an amateur program which is to say you have an entire working age population of the population of retirees at that time was relatively small. so, of course if you were 66-years-old when social security was created you got benefits and you never made the contributions of the rate of return on your on contributions was pretty high. over time, however, we've got to the stage we refer to this as a mature system with the people are retired today we can do the math but essentially they have had a full working career paying

into the system so the rates of return have gone down there was a little bit of a surprise on a couple of things. one was post world war ii. we had a quote on quote beebee bimmer as you know. if you go back to the time between 1946 to 1954 when the baby boom was going on how the perception was those are what the birthrates were and the assumption is we were going to go on forever it was close to a decade after that before people began to figure out that birth rates had dropped fairly substantially so that the difference. and the other thing that has happened is that families are having fewer children which is not always fully anticipated and also people are living longer, which in the very long run is the very important factor for social security.

the baby boom will be gone, lower mortality rates, greater longevity are pretty much looking like they are going to be the rule forever. >> host: eight tuitele here. if the social security trust fund is solvent until 2035 does that include interest on the fund or is it solvent longer? >> guest: that includes interest on the funds. there are a couple of bending points in the way this calculation works. the first bending point which we passed is the subject of a newspaper article was that the system in terms of cash flow not including interest has gone negative. the second point then would be the interest alone on the trust fund is not enough to enable the trust fund to pay its benefits and at that point we actually start leading into the principal of the trust fund then you get to the final bending point which is we use of the principal and the trust fund is exhausted.

the value of all the benefits must be constrained to the amount of tax revenue coming in and it is projected that at that point there will have to be an across-the-board benefit cut this isn't new beneficiaries this is all beneficiaries. the 88-year-old widow at that time with everybody else will have to get across the board 20% benefit cut. that is the kind of legislative trust hold like in the debt limit that you don't want to flirt with. >> host: rich republican englewood florida. >> caller: my question is with all of the audio use put into the trust fund itself are they saying it is going to stay solvent until 25 if it is never put back? thank you. >> guest: the statement of

solvency with respect to the trust fund is an argument about the accumulated balance that is in the trust fund. that amount is of course subject to variations in the performance of the economy, changes in the size of the population which relates to the longevity of the elderly, the birthrate for the young although when we are looking out 20 years we are pretty certain about what the native population is going to be. it also relates to the rates of immigration. so the 2035 date in terms of the balance that is in the trust fund now is somewhat sensitive to developments but it is a relatively predictable. i think the thrust of your question has more to do the meaning of the trust fund the

rest of the budget has not been kept in balance or in surplus and that's an economic question and a financial question which is very much at the heart of this debate in washington right now. we want to be sure that the finances of the united states are sound of the obligations can be met. >> host: illinois. >> caller: good morning. i'm 73-years-old. have a couple of comments and a question, sir. first of all social security as of 2009 our congress has borrowed 13,750,000,000,000 out of social security that has never been done since ronald reagan that's when i started if the money was compound with interest we probably have over $4 trillion more. q