>> his name is slightly altered, do. it's not, but i have great sympathy for an organization when they go back to an intelligence agency and get stiff arm three times in a row -- >> i don't know if that's the case, that's my point. >> i think it is relatively common, but again what it is in this case or in a case there will be cases the fbi closes. how do we spread that responsibility, share that with

the state and locals so of the resources can keep an eye on it and how long? right now the fusion centers frankly are not doing a great job of picking that up because we haven't told them to do that. the jttf rules make it difficult, not impossible but difficult for the information to be shared so the mayor of new york or ray kelly or ed davis or the cambridge police chief can decide, you know what, this is worth my time and energy even if it's not worth the fbi. we don't want the fbi making that decision. we want the state and local authorities making that decision because they know if they want to guard against that, or robberies or anything else. so you've got to make sure that information is shared systematically with oversight, and then put that burden on the state and locals and the fusion centers to do with the what they want and make sure that information is being refreshed with any other information. >> it clearly should come up with trying to get the citizenship. that's after he returned.

something should've come up, something still should've been in the system internally. were not talking someone civil rights. would talk of something internally in the system that would've red flag that. again i don't think there are any clear answers. that's going to be our job here to do these things, but when we're talking about information sharing, i just bought this one. better be with members of congress as well. we are not getting that information to conduct our proper oversight, and i'm glad to hear the chairman say we're not going to stop until we get it, and i yield back. >> thank the gentleman. let me apologize to the witnesses. i had to go over there. director leiter, could you give information on the fusion centers. i think they have eroded. i don't think they're doing come in texas the fusion center works really well but not other places in the country and that would be helpful. >> mr. chairman, if i could, i

don't mean to put all that live on the fusion centers either. this has to be the relationship between the fbi and the fusion centers. the fbi has to provide information so they can do this and support the state and local authorities on that followed one operation. >> thank you. mr. keating, i think we heard repeatedly in boston case closed. with that i recognized mr. meehan from pennsylvania. >> thank you, mr. chairman. and thanks again for this very, very distinguished panel. i want to follow-up a little bit on my good friend mr. keating's inquiries. it goes to the degree to which there is and the building to pursue investigations at what point in time do you discontinue an investigation. mayor, it's been a while since i gets your blood off your old u.s. attorney's manual -- i don't think they have the manuals in my day. >> you might have been -- that's part of the issue.

mr. leiter, as a former prosecutor and i know you worked very closely in your prior capacity with the rules and to some extent the constraints. we have center -- senator lieberman pay-fors has been a great deal of time looking at these issues as well. in aftermath one of the things he was concerned about where attorneys generals guidelines which may in and of themselves allow even the agents themselves to ask questions to a certain point, and then political correctness, you only ask so long them which could never happen in murder investigation. those were the days when we used to look traditionally at crimes that were committed. we asked questions until we have a resolution but now the dynamic has changed. we are being asked to investigate matters before a crime commits. and so there's some tension about how deeply you go. do we need to revisit guidelines? do we need to be more aggressive at pursuing these, and where is

the right place for us to keep cases in some kind of status in which new information, particularly you touched on it, the issue of information that comes over the internet, becomes the kind of thing that allows us to reopen the and cory? >> i think you nailed it. i do think this is exactly where the mayor is right, political correctness comes in being, becomes an issue. and you have one overarching issue. congress passes a law, maybe it's the privacy act, made its the fisa act, whatever it might be, and then the attorney general has -- usually to push the bar down a little farther. and yet the fbi create their domestic intelligence operations guidelines. they made make -- they may make everyone more nervous. you wanted to let them do this and suddenly they're doing a lot less internally. so what i think the role of congress has deployed is to make

sure that the attorney general guidelines and the fbi internal regulations about what they can do are really consistent and are not being risk averse and asking us questions. as you yourself noted, these investigations are different for bank robbery. they're different because there hasn't been a crime yet and they are also different because they implicate the first amendment. in a way that the normal bank robbery doesn't. so it's a riskier area, but just to make sure you got the alignment between how people are operating the federal government in the fusion centers and the jttf so it's consistent with a maximum authority of giving them under the law. there's a last piece year, congressman, which is after they do that you need to give them top cover. because i sat in this chair when it was an official of the u.s. government and i was getting yelled at by people in your cities about how dare you watch list my constituent.

my constituent never did anything, and every time he a stops them at the airport, and three months later after the christmas day bombing, the very same people, not suggesting members of this committee, were saying how dare you, mr. leiter, why aren't there more people on the no-fly list? everyone should be on the no-fly list. so you have to set that bar, make sure that the executive branch is only that part to its fullest, and then be honest after the fact that people in executive branch are doing really hard jobs, get it with your blessing as long as they are doing what you're explicit about allowing them to do. >> i think you're right and those were members of a prior congress you're talking about, but the nsa issue is a perfect example of how it's had a tremendously chilling effect on the ability of us to pursue where we need to go as a nation in terms of protecting the

homeland. maybe it's an appropriate time to be asking those questions as well. mr. mayor, any thoughts on comments mr. leiter mix because i think mr. leiter is absolutely right. i think the reality is that these are just natural concerns that people are doing high-risk investigations have. and the atmosphere you create for them means they're going to go further or they will back off. if they think to be criticized if they make a mistake they will back off quickly. if they think they will be supported, if they make a mistake, then they're going to go further. but there's a second issue that i think was listening, also comes up, i don't know this is just a matter of political correctness or fear. i'll -- i also think it's a matter of resources. the fbi has on 12, 13,000 agents.

that is a very small law enforcement agency. new york city police department, 35,000 police officers. when i was the mayor it was 41,000 police officers. 800,000 police officers nationwide and the 12,000 person organization you have to have some degree of discipline and economy about what you can investigate. you can't investigate everything but even things that should be investigated you can't investigate, you don't have the resources to do it. so i think the suggestion which i became for mr. keating our mr. leiter, or both, one of the recommendations should be that if the fbi doesn't want to pursue it, and if they can be honest about it because they just don't have the resources to do, which they don't, then they should turn it over to philadelphia police or the boston police or the new york police or the chicago police to further investigate. then they can make the decision with a larger resource pool of

available. if this is something worth pursuing or isn't it. i would think in a situation at least we know enough about it that this would've been something that if you have more resources, this is something he would have kept after. particularly i find his going back to russia a startling event, particularly cincy sought asylum in the united states. i dealt with thousands of asylum cases when i was associate attorney general because it was during the maria boatlift and the haitian, and the haitian migration. you get asylum in the united states if you prove that there is a valid fear of persecution if you go back to your homeland. so he proved to our satisfaction, his family did that he would be persecuted if he went back to russia. and all of a sudden he gets up and he goes back to russia. after the russians dollars he was a suspected terrorist.

omar and bells should've gone often not happen. something strange is going on. these guys going back to the country from which he was persecuted. would seem to me he would put him back on the list and you would watch him more carefully. so there was plenty here, if the fbi had come to the conclusion, we have done the best we can, we don't have the resources to go any further, then you've got this very large local law enforcement agency, given the chance at least to go forward. something should be built in, whatever protocols exist so the fbi is encouraged to do that. and it had to straighten out and local law enforcement agency and get the local law enforcement agency to make itself more responsible, less likely to leak, then raised the issue to get that straightened out in advance. >> i know, trained as i yield back, that is one of the concepts that was behind the creation of the fusion centers was just that principle that they would be the follow-up force to pursue that which could not be done and the fact that it

isn't happening appropriate because i think another weakness that we ought to be observing. and putting as part of the analysis that is included in your report. thank you, mr. chairman. i yield back. >> we certainly will. the chair now recognizes from texas. >> mr. leiter, yesterday a subcommittee of the full body led by chairman duncan had a hearing about the influence of iran and the western hemisphere. and understanding that a terrorist me into this country through many other ports of entry punters about your thoughts on what we can do more in terms of a relationship with canada and mexico to prevent these terrorists from coming into this country? >> i think we have at least two already. iranian influence or sponsor terrorists using both those country. yet apply -- yet the plot against the saudi ambassador.

and jeff al qaeda inspired plot in canada which involved leadership, al qaeda leadership and the rain. so we know both those borders are vulnerabilities. they pose very different challenges though. to the southwest border, its mass involved in, butrankly, if you have the iranians coming through the border, they tend to stand out. on the northern border, obviously it's still lots of mass and volume but it's a very, very diverse population coming across the northern border. and in that sense it can be harder to capture these things. all going to ensuring that dhs, fbi, cia are sharing information about travelers in a seamless way so you can hopefully detect these people. but also goes to another point which is a digital matter of the past 12 years iranian sponsored terrorism in the form of hezbollah or quds force has not

gotten the same focus as al qaeda inspired terrorism in the u.s. appropriate so. but it's going to free up the fbi to pursue iranian sponsored terrorism, which i think is a real and growing threat in this country, and have to have been shed some of the nation. one of the ways to do that goes right back to what the mayor was saying about insuring state and locals are being fully leveraged. so iran is a real threat on both borders. we have seen it over the past two years, and the fbi has to the resources to pursue that threat and didn't do that in part by leveraging state and locals for these lower level threats like what eventually became the boston bombing. >> do you use the degree of risk, the standpoint of entry of harboring terrorists as equal? >> congressman, i view it as different. it is a real threat that iran, if it were to be a conflict

between arrest and iran over its nuclear facility, there's a real threat of iran using hezbollah or quds force to attack the u.s. there's hezbollah operatives in the u.s. today. we seem quds force plot attacks here in the u.s., and the border is a vulnerability. and again if there's a shooting war and some extent the iranians already think they're in a shooting war with us, we will become increasingly vulnerable. >> i guess what them as equal, the threat of entry by either border being as virtually equal? >> congressman, frankly i wouldn't, i wouldn't diminish the possibly of either of those entries, southern border, northern border, no any port of entry. iran and hezbollah, quds force are sophisticated enough to get operatives in this country through any of the three and they would use any vulnerability to get people inside. >> so my next question was out in terms of relationships with

both countries, what more can we do to avoid those threats to? >> congressman, i wish i were a great expert on the current relations with mexico and canada on this. i know ms. miller has left and there's incredible pressure to keep both of these borders open for very good economic reasons. at the same time, having worked more with canadians, i think the canadians are very focused on this issue. on the mexico border, on the southwest border, frankly i think that from the government of mexico perspective there are bigger issues than iran. and that is the general insecurity of the border of the flow of drugs, guns. i think in that sense public continue to focus on this with the government of mexico would be very critical. >> you mentioned with respect to "the new york times" bombing that there was, due to the type of fertilizer that that particular bomber had used, and

because there were mechanisms in place that were able to detect other, more dangerous versions, what information do we have about the materials that were used in the boston bombing in that regard? and if you have that information, can you elaborate, you know, why maybe we were not able to identify those materials. >> we learn from the oklahoma city bombing that nitrogen fertilizer-based for less than nitrogen-based fertilizer is an incredibly effective improvised explosive device. and after that event the fbi start controlling it. so to go out and buy 1000 pounds of nitrogen-based fertilizer, the next day a dismissal probably knock on your door and say, how come you're buying that? that's why i shall shahzad didn't buy the right fertilizer. in the case of boston frankly

the enemy got smarter. and the enemy got smarter in part because they were trained to things like al qaeda in the arabian peninsula inspired magazine and the odd things that really can't be controlled very well. you can't control the purchase of pressure cookers. you can't control, you can but not very effectively, control the purchase of firecrackers but you can't control the purchase of small babies and things like that. so they were smart enough to buy things that are not controlled at that regrettably i think as the mayor and the professors at them when they're part of the ideological group, you learn from each others' mistakes and you get smarter about it. they were smarter about it. the good news is they couldn't build bombs that were nearly as big and as powerful as we've seen in the past. not catastrophic death at boston that might have otherwise had. spent thank you, mr. leiter, mayor, and dr. hoffman.

i yield. >> the chair recognizes mr. duncan. >> i want to thank the gentleman from texas for following up on yesterday's hearing about the iranian threat in the western hemisphere, and i want to thank the director for your comments, and recognizing that there is an arena threat and that hezbollah and quds force, all the iranian proxies and their actual paramilitary groups are trying to infiltrate this country, have operatives in this hemisphere. and your comments sort of contradicts the state department, who i hope is taking note of those comments, when they say that the iranian threat is waning in this hemisphere. i think is taking a very narrow view. that's sort of like folks on the road are applying and not on the field. so i appreciate the frankness and openness on the iranian threat. we're not going to slow down on recognizing or raising awareness for america about that. so i want to just take a moment

and thank the mayor for continue to talk about legal correctness. and director, you may disagree with some of the but let me just tell you where i'm going. is that i talk for the last three years about the distinct language of care. the fact that the 9/11 commission report used words that really identified the real threat. whether it's the words jihad or al qaeda or muslim brotherhood or identifying the state sponsors of terror or terrorists organizations themselves, these are identifiers. and when you see the use of those identifiers are discouraged or those words themselves are stripped from the lexicon of some of the law enforcement agencies as we've seen over the last four or five years, that concerns me because i do believe that you've got to be able to identify your enemy and talk openly about your enemy. but when i hear that the dod and the pentagon discouraged the use of certain identifying words

within our military apparatus, they discouraged those officers from talking about those type threats. they need you i believe have a fort hood type situation where maybe military officers that saw something happening were fearful of identifying that as jihadists type threats. because they were fearful about future promotions or assignments i understand how the military works, so i don't think we need to back away from being able to talk about the threats that we face. so i appreciate the greatness that we are seeing today, and from the mayor. and so, just segue into the fact, and let me just say that mayor giuliani, the hours and days and weeks after the september 11 attack, you're even keeled trustworthy leadership became both a symbol of new york's and our nation's resolve, and i have reason to believe

that the competence of our government's ability to respond to actual terror and mass disaster really came about from your leadership. so i thank you for that because i was sitting in south carolina, and i was watching it from afar, and i was inspired. i was inspired to the point to get back involved in public service. but let me expound on that, ted poe from texas and i were on a boat in the philippines, a pt boat with the navy young man who was in the navy manning a .50 caliber gun fighting the war on terror in the southern philippines. as far away from new york as you can become as far away from afghanistan as you can't envision, and we asked him, why did you join the navy? he said, sir, i'm from new york. he said, my best friend and i went down on september 12 and we joined because we never wanted to see that happen again. he was inspired from your leadership public as well, and he is serving our nation in

that. so when we talk about political correctness, and i talk about your leadership, you helped really i think start the ball rolling on the "see something, say something," you know, to inspire americans to actually watch your strengths and be cognizant of what's going on into the backpack laying there. but when we talk with the dhs about theirs -- their communicate with america they seem sort of antagonistic. it seems to me that on a whole host of issues from tsa screening the dhs ammunition purchases, the department does a tremendous job of communicating to the american people. sotomayor, how would you recommend the dhs could better engage the american people rather than continuing that antagonism. because i do believe that "see something, say something" is part of the answer to involve the american people. so if you could address that and that will be my last and final

question. >> thank you mr. duncan to the reality is this is a very difficult balance. we want an alert group of citizens who are reporting to us information that they see that a suspicious. we want police officers who have been trained on the precursors of terrorism. i recommend to you an article written by omission the bretton, oh, gosh, about for years now in which he described the training he put the los angeles police department through to look through the warning signs of a terrorist act. you want a citizenry that is alert to the. you want a police department that is sensitive to it. at the same time we don't want to trample on people's civil liberties. because if you have a citizenry that is a over to the end over to the and get a police department extra sensitive to it, they will occasionally make mistakes. they will see something suspicious that turns out to innocent activity. that's a very, very difficult

balance. it's a very difficult balance to strike. what we have to attempt to do it. we always had to attend to do. we now have to attempt to do it if, in fact, we finally recognize that we face this threat of one off terrorist self inspired terrorist, because the only signs of them are probably going to be these things that you see in the community by the police or citizens. and i think that being honest about what we face will make a citizenry more willing to come forward and make that police department more willing to take a risk in our favor, and if we engage in this, you know, fiction that there is no war, there is no war against us. that's absurd. i mean, they believe there's a war against us. just a matter of whether we recognize it or not.

it's absurd to say that there isn't a connection between these things. within a couple of weeks of each other, there was a connection between boston and london, right? the bombers in boston were inspired by jihadism, by islamist extremism. the guy in london went on television to explain to us he was inspired by exactly the same thing. i don't think we are insulting anybody. i don't think we're offending anybody, if we just recognize reality. and if we don't do that we're going to lose a lot of these hands. before september 11, i saw my city state from terrorism several times by an alert police department that wasn't afraid to come forward. it was an incident that occurred about two years before september 11, a young new york city police officer, i think a rookie police officer was patrolling subway stations in brooklyn. and he noticed two men that

looked middle eastern, suspiciously looking at a train station. i don't exactly remember what the suspicion was but they looked suspicious. he went to a sergeant at the desk, brooklyn precinct, and he said, you know, i saw this, these two middle eastern looking guys and they looked suspicious. sergeant curtis said, oh, forget a kid, there's plenty of other situations in brooklyn, and get lost. the sergeant said i will check with jdf pics recalled in the jdf. this was about 10:00 at night. at 5:00 in the morning the jttf broke into a row house in brooklyn and shot this man as he was about to hit the toggle switch of a bomb that would have blown up the entire building. they were planning to blow up this subway station. this is what we want to happen. we want a police, we want rookie

police officers who are alert enough to pick out things like that. because it prevents, it can't happen every time, but this is what the fbi needs if it's going to help us prevent these kinds of things from happening. and maybe we have to err on the side of will that of telling them don't be afraid to act on instinct. because every once in a while when act on the instinct they are going to make a mistake. but the question is, on one side we want to err? you want to err on the side of making sure we never make a mistake and false identifies someone as a terrorist who isn't, or do we want to err on the side of making sure that we don't of any future boston bombings? i think that's a political choice, not in a partisan sense but in a legal sense but that's a political choice that has to be made as to which we want to do. i know which one i think we should do. but it think that something that

is a little bit confusing right now. >> let me just instinct god bless you guys and everyone is t is working to keep this country safe. and i believe, mr. chairman, that if we are honest with the american people and have an adult conversation about the real threat and talk about real terms that i believe we will be better off in the long run. so i yield back the balance of my time spent the chair now recognized the gentleman from louisiana, mr. richmond. >> thank you, mr. chairman, and i would just pick up where the mayor left off, and that is talking about giving our law enforcement officers the reassurance that if it's a good faith effort, and it's wrong or mistake, but we will support them. because we want them to use their judgment, use their judgment and to trust their instincts. what come in your opinion, do we need to do to send them that

message that you think would reassure them and give them the confidence to take that chance? >> i think the fbi engaging in more would be enormously helpf helpful. and the fbi developing, now with a new director maybe this is one of the initiatives that could take place. for the fbi to really think in terms of a potential 800,000 additional law enforcement agents are available to us, and probably isn't going to be all of them because they all can't be trained. maybe the fbi should undertake to train them in what they should be looking for, how they should conduct themselves. even how they should conduct themselves in trying to strike a balance between how far do we go and when we violate somebody's civil liberties. that would be a very valid thing with the fbi to do. and i've always found -- here's the thing that breaks down these institutional barriers, which i

saw in the federal government and i saw in new york city government, some of our agencies in new york city government as congressman king knows exactly don't get along all the time. the more these people get them know each other and the more it becomes a personal relationship, the better it works. the first joint terrorism task force was set up in new york city in the late 1970s between and fbi director named ken wong and a new city police commissioner named mcguire. they were good friends. they were facing bombings and had nothing to do. they were facing -- they were facing bombings that included, there was a cuban terrorist group. so they're facing all these bombings and they decided they were going to do a joint terrorism task force. make the cops and fbi agents partners. saiso they would sit down and investigate the cases together. this only came about because they had personal relationships.

most of the cops probably thought it was a terrible mistake. can work with the fbi. most of the fbi the fbi would be compromised forever working with the new city police department. but because these two guys got along with each other, so if you foster these relationships in this information flows a lot better. >> that goes right into my next question. mr. leiter, i will give you a shot at answering. do we lead -- leave this on the up to the fbi, or do we set some sort of protocols or rules whereby when something, a trigger is reached that there is some mandatory disclosure or information sharing? >> congressman, i tend to think, i'm an executive branch guy. i was judiciary, now i'm executive council i like a

little bit of flexible for the executive branch because i don't think that congress wants to be in the position of taking out exactly when something should and should not be shared. but you can also set the tone for this. i've worked with this committee a lot. it would be great to have a joint hearing between this committee and the house judiciary committee, and invite fbi and dhs to sit next to each other. and you have, and davis out there, too. that's a statement that here we're going to work together on this, we're going to resource the two organizations, justice and homeland security, anyway that forces you to work together. we're only going to have come we're only going to fund future fusion centers if they are collocated with joint task force. that's a message to the executive branch that you operate in a joint way it will set the standards, and i think it is, you can provide reporting requirements. so rather than providing rules, figure out if you get 1000

guardian please, that's a tip to the fbi, tell us what percentage of those leads are provided to state and local fusion centers, and then the state and local police departments. and then you can make a judgment come if it's 5% our sure, that's a problem but if it's 95% shared, you can have a conversation but it think that is probably a better methodology of legislating and trying to say you will share under the circumstances, you will not sure under others. >> thank you for that but i know we've had a lot of talk about political correctness today and part of the conversation also has to be about political courage. and mr. mayor, we talk about the 9/11 commission report, but i still think we're far too patient as a committee in not claiming are right for jurisdiction so that the department of homeland security is not spread out all over the place answering to 108 committees or subcommittees over the last couple years.

and it's one of the suggestions that has not been implemented, and i don't think it's a democrat or republican thing, but i think it's one thing that this committee could do in a bipartisan manner is to make sure that we bring enough attention to the fact that we still do not have the jurisdiction that we should have, no matter if it's chairman king or chairman mccoll our former chairman thompson, that we do it. and i think that the more that these things happen, the more it highlights the fact that we have an interest, we have the ability to do it but we just don't have the jurisdiction part so that we can get to where we need to be as a committee. so with that, mr. chairman, i would yield back. >> i thank the gentleman, and that is a work in progress. director leiter, actually your recommendation is one that i have already been discussing with the chairman of judiciary to hold a joint hearing.

not sure the fbi will show up, but they should in a closed session i would think. so with that i now recognize mr. barletta. >> thank you, mr. chairman. mr. mayor, let me just say i have a special admiration for italian mayors who are thank you fans. [laughter] -- who are yankee fans. i believe our first priority in any type of immigration laws are one, to protect the american people. i think that is first and foremost in my mind in what we should do and, obviously, immigration is at the forefront of what we are debating here. i would like to point out when we talk about border security, sometimes what's left out is these overstays. nearly over 40% of the people that are in the country illegally didn't cross the border. they come legally on a visa, overstated these and we simply can't find them. when i look at, and any state that has international airport i

believe you are therefore a border state. when we look at some of attacks we've seen whether the the christmas day bomber, whether it is tamerlan going back to the country that he was linked from and being able to get back into the united states, whether it was his buddy who got back your on a student visa when he wasn't even in school any longer, whether it was in 1986 was given amnesty as an ag work or when in reality he was a taxicab driver and was involved in the 1993 attack on world trade center. don't think plan in america was a bomb. whether it be two of the pilots on 9/11 who had their student visas approved after they were dead. i think is obvious to me we have gaping holes in our visa system here. my question is with that, do you feel that will be in the best

interest of the american people that we fixed that problem first since we know it is a national security threat and with all have our problems as well as making cities, no one knows better than you what happens when somebody gets by. i would like your opinion. >> i think there's no question that our immigration system has to be fixed. your body has just passed a massive reform. some people think it's enough, something that isn't enough but you have made a good faith effort to try to fix it, which hasn't been done in a very long time to improve order security. i think that too often we think of border security just in terms of illegal immigration. we don't think of it in terms of if we're open to illegal immigration we're also open to terrorists coming in, we don't know who they are, drug dealers coming in, criminals coming in, people who are mentally ill

coming in. a civilized country controls its border. there's nothing unfair about that. distant nothing inhumane about that. it's actually humane to decisions that are here that we make a good-faith effort to do it on his site -- ivan's in this country and identify them when they come and. virtually every other democracy has a pretty strict policy about who they let into the country. you travel, i travel, we have to identify ourselves when we going to england, france, germany, italy, china, any place else. so i think that to the extent that we can have a system that allows us to get as close as 100% is possible to identify anyone who comes into the united states we will be a much safer country. we'lwe will be safer against terrorism, safer against crime, we're going to be safe against communicable disease.

so i think this is just one of the things that benefits from. and if we don't have control, if we don't have reasonable control of our borders, then everything else kind of falls apart. so i hope that with the bill that you passed, not you, the senate passed and the bill you're going to pass eventually, i hope what comes out of that is whatever happens on the other part of it, much more resources for border patrol. i've always thought it was much easier than people think to control the south, southern border of the united states, that it is not as impossible a task as people make it out to be. eyed look at the size of the border. i think about i reorganized the police department to reduce crime in new york city, and i know this sounds like a strange statement that i think it would be issued to control the

southern border to reduce crime by 50 or 60% in new york city. the scale is about the same. we have 77 police precincts. you need about 50 border patrol stations. we had about 40,000 police officers. you probably need only about 20-30,000 border patrol to do it. and if we did it, we would end up with a much better, an in tht with a much better economic system, to. then if we had over control who's come in legally and we knew who they were, then we could expand the number of people coming in legally. we could make it easier for them to come in legally, make it impossible for them to coming illegally. i think will help reduce the risk of terrorism and it helps in about 100 other ways. >> i think simple, you wouldn't replace the carpet in home if you have a hole in your roof spent i think that's right. >> i yield back. >> thank the gentleman.

just for the record this committee did pass the border security results act unanimously which is almost unheard of in today's political environment. so with that, the chair now recognizes the gentleman from california, mr. small well -- mr. swalwell. >> welcome, and welcome to our witnesses. i was a congressional intern when september 11 happened, and i really appreciated your leadership during the terrifying time to be in washington even a more terrifying time to be on the ground in new york city. you really led the city with your leadership. i remember reading your book when i was in college. >> thank you very much. >> i think you would agree that even the congress came together. a moment of bipartisan -- bipartisanship.

our country really did come together. and you have really acknowledged president bush's role in and you seem to have praised president bush and the role he played. would you agree though that president obama, since he took office, that he is increased the number of drone strikes that the bush administration was conducting once he took office and actually went -- [inaudible] than president bush did speak with i think there's very good things that president obama has done. i think there are things i strongly disagree that president obama has done. i particularly believed that the drone program has been an effective program. i don't know the program in great detail. there's an awful lot about it that is classified. i do know exactly the choices are made about who is targeted

for attack and who isn't. but if you ask me in general, don't think the drone program is a good thing, i do and i think it's a necessary one. >> i would more just one of the program certain has escalated since president bush left office and -- >> yes, i don't want to get contentious but i do have one issue with it may be coming outt it from were i come at it, which is it was such a tremendous amount of concern in capturing terrorists and subjecting them to intensive questioning, including the three or four that were waterboarded. and now, of course, we have chilled many, many more of them. >> i would just -- >> the one hesitation i would have about the drone program is, did we deprive ourselves of the ability to get information from people if we engage in a little more dirty attacks of capturing

them and questioned them? i'm not an expert on this. i do know what the right answer is, but i think that's a legitimate question to ask. >> but you would also agree that our foreign surveillance and nsa and the data collection and the prison program, that a certain escalated since president bush was in office? and our offers to identify foreign nationals who are participating in terrorism and their efforts, the president obama even taking heat, his own party stepped up efforts to? yesterday stepped up efforts and continues some of the programs that president bush started. >> and he participated in the ordering of the killing of osama bin laden? >> giving him a great praise and told him personally i felt was a real act of leadership in doing that. >> i think there may be disagreements on some of the tactics used but i think you'd probably agree president obama has continued president bush's efforts on the war on terror and has in some ways been more

successful? >> in some ways even more successful, in some ways he's been less successful. i think he's been less successful in capturing people, in getting information from them. my major objection to president obama's change has in his unwillingness to described as a war on terror. because i think it sends the wrong signals to our bureaucracy and i think sends the wrong signals to our enemies but i think they perceive it as a sign of weakness. and almost a rationale the that you would not describe us as being at war with terrorists when they are at war with us spent i want to shift topics. we've seen in the last few weeks, we've a plane crash in san francisco which is right in my district, and you saw social media was the first on the ground to respond before first responders, before traditional media. we saw in the boston bombings that was the fbi working in collecting information from social media and using them to engage a new audience to try and learn more about these bombers that help of their investigation

and try to ask you to go back in time, what role do you think social media would have played had it been around on second 11th? and what role do you hope to see a play, or what role do you see it playing as we address the terrorist threat going toward? >> social media has expanded exponentially since september 11. so that's probably a hypothetical question that is almost impossible to answer. is a september 11 were planned today, the chance of picking it up through social media and other forms of communication, which we now have much more surveillance of, is much greater. again there's no 100% chance you will pick something up, but i think one of the reasons, i forgot and made his statement about, i think you did, about how long we've gone without a really massive attack like september 11. i think one of the reasons for that is it's very hard to

accomplish that today. the things that are in place today that were not in place before september 11 give us a much greater chance of picking up a massive attack. on the other hand that been lisa's mobile to these smaller attacks which, in essence, takes place under the radar that we set up. and so we are safer against one, but we're more vulnerable to another. and although the numbers differ, in a large attack more people die, and a smaller attacks less people die. over them are enormously destabilizing the country that after all values every human life. so we can say 13 died here and 3000 died there, and that does make a difference, but it's still very destabilizing, particularly if we have numerous acts like this. if we have numerous attempts to attack us but even the attempts that we stopped our very

destabilizing. >> thank you, mr. chairman. >> the chair now recognizes the gentleman from -- [inaudible] >> thank you, mr. chairman. thank you folding this very important hearing, and to the three witnesses, thank you for being here today. mr. mayor, you received a great praise as you should have. i hope you're not offended, we haven't called you serve spent i appreciate it. i try to hide the fact spent i hope that mayor is sufficient. >> in brooklyn this would be perceived very poorly. >> as it would in my hometown as well. i would like to give very quickly follow up on the comments recognizing kimmy a severe irony that most, if not all of the policies of former president bush had in place and which are president campaign so aggressively against by the very policies that he is kept and perhaps president bush had more than a few things right. and i think history is going to

prevent that was the case. i've taken a lot of notes from you gentlemen on the things that you testified here today. you have used words common thread. we talked a lot about political correctness. at one point mr. giuliani, i think you said islamic domination and i would like to talk about some of those ideas, the big picture of the bigger picture if we could, specifically i would like to talk about the motivation for the action. what motivates our enemies to do things that they have done. it's been said that maybe the u.s. is to blame for some of the actions and some of the video and hatred against us. perhaps if it not been so colonial, or if we have not excluded developing nations or perhaps if we demand u.s. personnel in certain parts of the world right now. ideas this idea of american exceptionalism, the have faith in that orgy of cultural relativism?

and i just think that's absurd by the way. and that's a topic for another day but i think that america is as abraham lincoln said, the last best hope of men. and i think that's true not just for americans, i think that's true for people all over the world. my question is this, is there anything that we can do that will eliminate or maybe at least lessen their motivation to bring us harm? or is it a greater truth that the reality is that as long as islamic fundamentals and exist that they will always seek to destroy us? and i would appreciate your opinions on those. >> i have no doubt about the answer to your question. because i faced this in the days after september 11 trying to figure out why would somebody do what they did. the reality is, what we did is only in the margins of what they do to us.

their motivation, even though it can be described as irrational, maybe even insane, their motivation is their perception of their religion. it's an incorrect perception, at least i believe it is. it's a completely deceptive kind of you of the major message of the muslim religion, but it's the message they have taken at it. and the only way, the only way we can stop them if we stop being a democracy. if we stopped respecting the rights of women. if we subjugated women to wear the belief women believe -- belong in society. if we stop believing in god the way we believe in god, and accepted their beliefs about god, to a large extent we would have to get away with our financial system the way it operates. we would essentially have, we

would essentially have to change our values to fit their values and refer them not want to kill to that's why they're trying to kill us. it's not about israel and palestine. that's a side issue. it's not about our occupation of anyplace because we haven't really occupied any muslim lands really. it's not like the dispute with communism over economics system, and even a social system. this emanates from their perception of their religion and whether religion is demanding of them. now, they may get to that because of psychological problems they have, but when they get to it their all joined in the same motivation. so asking how can we and some broad sense stop that, we can't. but on a smaller level we can try. i mean, in a smaller level we could try to engage more with

moderate, sensible mainstream members of the muslim and islamic community, of which there are level. we could try to encourage them more to step out on this. i'm going to tell you a totally unrelated story but as part of how i think about all this. when i was united states attorney, the first thing i begin pursuing was the mafia. and then after bringing my first case against the mafia i was criticized for using the word mafia. not only was i criticized for using it, it was demanded that i be removed from office because it violated justice department guidelines that you couldn't use the word mafia. there was a guideline that have been put in at the behest of the italian-american civil rights committee that the attorney general mitchell to agree to do this. the italian-american civil rights league was headed by joseph columbo was the head of the colombo crime family. but you couldn't use the word mafia. because it was insulting to italian americans to use the word mafia.

and i said that i was going to continue to use the word mafia because it should only be insulting to italian americans who were members of the mafia. or italian americans who sympathize with the mafia. but for italian americans who go to the mafia as a group of murdering imbeciles, which is what they were, then they should be liberating. they should point to society that yes, there's a group called the mafia that most italian americans don't want them come to like and i would like to see them gone. it would be very, very healthy if that's the dialogue we have with the muslim community that most muslim should be as opposed, and opr and i believe most of them are, the question is getting everyone to speak out and getting on the same page about this. nobody should be defensive about describing something as islamic terrorism that you're insulting legitimate, decent members of the islamic religion. it is a islamic extremist terrorism, you're insulting exactly do you want to insult.

islamic extremist and those who sympathize with in the anybody in the islamic community who is nervous about that should get over it. >> mr. mayor, i appreciate your answer. i wish if we had more time i would maybe follow up individually with you and your opinions on that as well. >> mr. chairman, if i could just a quick because i think that's a critical question. al qaeda's narrative is pretty simple to its us versus them, and the us is the west, u.s., western, israel, and the theme is all of the muslim world. we have to do everything we can to show that that narrative is false, that the us is the west and the vast, vast majority of muslims in the u.s. and elsewhere, and the them if it's that tiny portion of violent extremists around the world to read to kill kill them, capture them and the like. what we can do is help ensure

that the rest of the muslim world and the rest of the non-muslim americans and the like realized that we are together against that tiny percentage, and again, us versus them is -- >> i think you're exactly right. it may become a tricky if i could just conclude with this government fo for the small percentage and it is a small percentage but there are those that exist, the islamist fundamentalist that this is a long, long haul for us. short of us redefine who we are as a people, something that has been developed over hundreds of years, short of that which workload are not going to do, then this will be a conflict that would exist. again, for the long haul and we need to prepare ourselves and prepare the american people for the. so with that, thank you, thank you. >> thank you. the chair now recognizes the gentlelady from new york, ms. clarke. >> thank you. he forgot to say the gentlelady from brooklyn.

and sir giuliani, i think we have not given brooklyn and the fact that it's far more cosmopolitan these days than perhaps has been given credit for during the proceedings today but it's great to see you here. and the rest of our witnesses, it's good to have you here as well. mr. giuliani, honorable giuliani, mayor giuliani, my mother serve as a councilmember during -- it's good to have you here to give us a sobering look. what we are challenged with, and what i find having been in new york all my life is that we oftentimes forget that, or get caught up in the hindsight of 2020 type of philosophy, in fact, you know, new york has

become the way it has become because we've been the number one terror target. i remember the 93 bombing. my father was in the building at the time. and none of us could have imagined that the world trade center would have been bombed. from that we decided we would put barriers at the lower levels of our high rise buildings and protect, you know, invisible buildings and what have you. but none of us could envision that then people would fly planes from above to then take down buildings, right? now we know that we have to reorient ourselves in terms of security, intelligence, things of that nature. and i think it's an ongoing battle, ongoing challenge that we have to think outside the box to use the type of information sharing capabilities that we have in real-time, to try to avert things.

but mr. leiter, you put your finger on the pulse of it. a challenge, and resources are finite. you know, my question is what role does dhs play in the intelligence community? because if we can't answer that question, then our mission as a committee, the mission of the agency that was still with a very focused purpose is all for naught. and i would like to get your responses, you know, just given what we know now. you know, how do we minimize human error and how do we use this agency as the agency to get that done? >> it's an excellent question, congresswoman chu i would say, to meet dhs intelligence has struggled at times. we all know it's struggled. it has in my view for principled

things that have to do really well and all the rest it should just stop doing entirely. one, it is the only intelligence organization that is focused on what's going in and out of the borders. it better do that perfectly or as near as i can to perfect and it has to do that in close conjunction with cbp, customs and border protection and customs enforcement to combat to that in a minute. that's number one. ..

>> that we've all talked so much about. and in my view, it hasn't done a great job at that. it's done a good job of building fusion be centers and educating that work force, but this more granular operational level is not what it has worked with the fusion centers as much to do. fourth and final, it has to be a true fusion center within dhs itself to leverage all of the intelligence that customs and border protection, immigrations and customs enforcement, tsa, secret service, coast guard already get. if it can do those four things really well, then everything else can be forgotten. and in my view, i hope the next undersecretary focuses on that, focuses on building a work force to do that, and out will still be -- it will still be a tough challenge. >> did either of you want to try to -- >> it seems to me that that's

the perfect analysis of how you can focus dhs which, after all, is in the scheme of things in washington a new agency. >> yeah. >> and if you are as effective and as strong a leader for brooklyn as your mother was, we'll be very well served. >> thank you, mr.-- >> she was a great woman. >> thank you. [applause] >> thank you. i yield back. >> and let me thank the gentlelady from brooklyn for that question. [laughter] that setteds up a good -- sets up a good record for us. with that, chair now recognizes the very patient gentlelady from indiana, ms. susan brooks. >> thank you, mr. chairman, and thank you so very much to all of you for coming and sharing. and that's actually what i want to talk about and, director leiter, you mentioned that there may be a hack of training. you mentioned we might have even had some fbi agents -- which

causes me great concern. because after 9/11 we did extensive training. certainly, communities like new york, maybe los angeles, chicago knew a lot about terrorism. those of us in central indiana and throughout the rest of the country probably didn't know a lot about terrorism on 9/11. but then for yours led by -- for years led by the fbi and the federal government we went out as u.s. attorneys and worked to train our local law enforcement and our communities about prevention and te text of terrorism. -- detection of terrorism. and i'm concerned that we've very much gotten away from that, and i'm curious whether or not, you know, professionals like dr. hoffman and other experts who study are are actually brought in whether it's to conferences, whether it is to the training of new agents or agents that are being now placed on jttfs and fusion centers and local law enforcement. and i'd like you to comment, because i think that is

something that may be lacking as we have moved away from 9/11. so if you'd just start and would like the other response on it, because i think if we don't train, i just held a hearing yesterday in our emergency preparedness response communications subcommittee on this committee, and it was about the use of social media in disaster preparedness, terrorist response. and if we don't continue to train and educate on whether it's communication tools or, i think more importantly what are terrorist organizations looking like now or terrorist individuals looking like, i think we'll just continue to have attack after attack as we have suffered. >> first of all, congressman, we are in a much better place than we were on 9/11. the average police chief, the average agent knows a hundred times more than they did on what al-qaeda is and iranian threats and all these things, so it's undoubt cannedly better. but a couple things.

it's a never ending process. you can't stop because you have a new generation of agents and officers coming in all the time. what's one of the first things you're going to cut? well, i can worry about crime that happens every day, or terrorism might happen. i know what i'm going to do. i'm going to stop sending my people to jttf, i'm going to give them less terrorism training. we have to keep the folks on this and keep doing it. next, i do think, again, this is where political correctness can have a very bad influence. and the fbi habitten by this before -- has been bitten before in its training in part because it was by contractors who really didn't know what they were doing. the fbi, dhs have to rely on the expertise in the federal government, expand that. bruce hoffman and i have worked together extensively. there are people who really understand this. you have to do it in a way that people aren't scared about teaching the truth, because that

is a surefire way of missing the forest for the trees. >> dr. hoffman? >> well, this goes back to mayor giuliani's point which i think is very important which is the perception is we don't have a war on terrorism anymore, and at a time of fiscal resources, it's almost a perfect storm. the war on terrorism is over, there's fewer resources, so i think there's far fewer opportunities than there were in the immediate aftermath of 9/11. so i think there has to be that focus. especially, i think, and foremost as the threat is changing and evolving. i mean, it is a very different threat than we faced, fortunately, than ten years ago, but the threat still exists. secondly, i think one of the problems is that outside of the federal government this became a cottage industry, and all sorts of charlatans and people with questionable views and people that often taught, i think, extremely incorrect, inappropriate instruction that they had absolutely no qualifications gave a lot of the

training a bad name. so i think we need qualified people to do the training. but, you know, i have to say just in the past year i was part of a training team for a federal agency. we'd done this, actually, every year since 2002. this was the first year that -- and this was done by the u.s. military academies combating terrorism center. it was the first year it was discontinued, and the justification was even though the counterterrorist training had gotten the highest rating in this particular element of the intelligence community, the instructors' management was told this was no longer a priority. >> thank you. mayor, i don't know if you have anything to add of portion. >> one of the things that i found effective in trying to convince state and local law enforcement to devote more attention to terrorism is that, um, the assumption is as both gentlemen were pointing out that with limited resources if you

train for terrorism, necessarily you're taking away from their ability to detect, you know, other crimes and deal with local crime. the fact is a police department that's been trained to detect terrorism does a better job of detecting everything else. after all, you're really teaching them how to patrol effectively. which is what you want a uniform police service to do. so it isn't as if these resources are wasted. if you train them to detect terrorism, thai going to do a -- they're going to do a better job of detecting possible muggers, murderers, rapists. they're just going to be better law enforcement officers. so you have to try to get mayors, police commissioners to stop thinking of this as a zero sum game, and if i do this, i'm not doing that. same thing is true for the department of homeland security convincing state and local governments they should be prepared for the emergency response after a terrorist act.

the chance of any community in america being the subject of a terrorist attack is very, very small. the chance of a terrorist attack somewhere is very, very great. the preparations they do to be ready for a terrorist attack makes them better able to deal with a hurricane or a tornado, and i think we've seen that in some of the different emergency responses we've seen to these natural disasters being a lot better in places that were prepared for terrorism than in places that weren't. >> thank you very much. and i would just comment that we learned that certainly the preparation that boston undertook i believe in november on a terrorist exercise on an exercise in planning absolutely saved lives this spring. >> that's the point, you know, that's the point that i guess should be made after speaking so much about some of the things that were done wrong. from the moment the attack happened, the emergency response

thereafter was about as good as it could possibly be. that saved lives and also restored public confidence. you know, after a terrorist attack a community is traumatized. i was in london for the bombing in 2005, and they missed from an intelligence point of view one of the greatest intelligence services in the world missed all the signs of that bombing, which is pretty startling. but from the moment the bombing took place, their emergency response was first rate, it was terrific, and it restored public confidence within 24 hours. >> with thank you all. i yield back. >> let me just echo the comments. when i talked to the first responders in boston, the way they triaged using grant funding from dhs, 260 wounded that could have easily bled out in the streets that day, and they saved every one of them. so it was truly remarkable. with that, last but not least i now recognize the gentleman from pennsylvania, mr. perry.

>> thank you, mr. chairman. i feel compelled to just respond to some of the comments from the gentleman, my colleague from california. i find it hyperpartisan and blatantly hypocritical that he would extol the virtues of the current administration's continuation of president bush's programs having run specifically against those programs, deriding them without acknowledging at least the fact that those programs are due in very large part for the successes of counterterrorism operations regarding the current administration. but with that, i'll start with you, mr. mayor, and thank every one of your gentlemen for your service and diligence and patience here today. i just want to read an excerpt here. u.s. officials initially described the plot as -- correction, down played links to the pakistani taliban despite the existence of the tape, the tape that was released the day before. with this and things like naming nidal hasan's acts as workplace

violence, the attack in benghazi as a spontaneous eruption from a crowd, i'm wondering can you tell me what the upside is, what is -- why would we choose as an administration, as a nation, why would we choose to characterize the enemy this way, these acts -- what do we gain? what are we gaining from that? do you know? be. [laughter] i know it's not you, but i'm trying to strategize what is the strategy in doing so? >> well, i mean, the only thing i -- i feel very uncomfortable giving this explanation because it's my hypothetical sort of psychobabble analysis of somebody else's thinking, but i believe the thought is that if you engage too much in direct conversation about this or just logical conclusions about what happened, you're going to fend the other side -- offend the other side so much it's going to

lead to further attacks. >> mr. mayor, with all due respect, is there any -- >> please, i'm not arguing that. i think that's a terrible mistake. i'm telling you what i think the motivation -- in fact, i think it's just the opposite. because my knowledge of islamic terrorism goes back to about 197 3 when or '74 when the attacks, you know, when the palestinian attacks occurred. i was an assistant u.s. attorney. then i was put on a commission by president ford to study islamic terrorism in 1975. >> i mean, is there any evidence -- >> be i investigated, i investigated islamic terrorism as u.s. attorney, i dealt with it as mayor. the reality is, and i believe this firmly, the more euphemistic we are, the weaker we they think we are and the more they're inclined to attack us. >> [inaudible]

>> and the stronger we are and the more direct we are and the more honest we are and the tougher we are, the less likely they are to attack us. and anyway, the more direct we are and the tougher we are, the greater chance we give ourselves of preventing them from attacking us. we're not going to finesse our way out of this. >> i'm in concurrence, mr. mayor. mr. leiter, you in many your opening dialogue represented a whole series of thwarted attacks in america or locations close by, at least in the western world. and there was one theme for all of them, and we've heard about political correctness over and over again in this committee on this hearing and other ones in the past, but i would say, i would ask you is there any reason for us, for me to believe that those, those attacks are similar to ones that were enumerated in this committee on this day by folks from the southern poverty law center as being similar to maybe christian

organizations or maybe somebody that that was unhappy with president obama and his recent election? is there any correlation, is there any nexus, is there any similarity? >> well, i actually think there are significant similarities. and the similarities in many cases for the radicalization process when it is through violent islamic extremism or some other fill in the blank ideology, you generally have an individual who is disconnected from large parts of society, undergoing a crisis, finds an ideology which makes them feel like they're part of something larger, and then today strike out with violence. so in that sense a lot of the psychological effort even if the ideology's different, the process of people moving towards violence is quite similar. >> okay, so, and i agree with you there, but i guess i need to restate my question. actualization. from radicalization to actualization, actually carrying out the attack or what have you, is there any similarity from the

statistics of islamic radicalism and these attacks and thwarted attacks vice domestic terrorism as we would call it that, individuals who grew up in hometown america and get radicalized by something and then carried out the attack. >> well, depending on the timeline, the number of americans killed by with domestic extremists is, remains greater than extremists inspired by al-qaeda's ideology. if you go back and include timothy mcveigh, obviously, you have more americans killed by that form of domestic extremism. over the past ten years, i think the numbers are much closer. i don't know all domestic terrorist incidents. the one that comes to mind, obviously, is the shooting at the holocaust museum. i think some of that mobilization to violence is not dissimilar. i'm sorry, congressman, but i actually see some significant similarities in all of these cases. the difference, the key difference i do think is in the case of al-qaeda-inspired

ideology, it is more of a global ideology which requires more of a global response. >> and i just want to get the facts, so i don't mean to be confrontational. i don't necessarily see it that way, but as the mayor has already talked about and i i think you two as well, we have priorities. we have limited resources. and if majority of the attacks or attempted attacks are coming from one organization, ideology, shouldn't we -- and if that's the case, i guess i'm asking if that's the case. >> we should absolutely prioritize, and i can tell you having worked very closely with fbi and dhs, the overwhelming priority is al-qaeda-inspired extremism. and, frankly, in some ways we may have overinvested. so things like some domestic extremism, iranian-sponsored hezbollah quds force terrorism is probably, in my view, lower than it might be. but given, i think, the consequences of the attacks on

9/11, the global influence of al-qaeda and home grown extremism, it's not completely out of whack. but the overwhelming focus for jttfs in this country today is al-qaeda-inspired terrorism. >> thank you, mr. chairman. i yield back. >> chair recognizes the gentleman from new york for a few seconds. >> thank you, mr. chairman. i'd just make this quick. besides thanking the witnesses, i'd hike to announce marc mckay is here in the audience, he's with mr. giuliani, his father was a federal judge and had to be protected by u.s. marshals for many years and thank film her -- him for his service. tell your father he owes me one. >> when let me close by saying thank you to the witnesses. this has been an extremely, extraordinarily valuable for our report and recommendations that we will be developing. and thank you particularly, mayor, for being here and taking the time to show up. and i'm going to close this statement, on july 19th, 2012,

the fbi released a press statement proclaiming that they were already implementing the terror prevention recommendations of the webster commission which investigated the fort hood shooting. just two days earlier, tamerlan returned from the chechnyan region, and the fbi kept the case closed. the fbi's at the center of protecting our attacks on the homeland, and it's its respondent to find out how we did not find -- responsibility to find out how we did not see this coming. it is unfortunate. this committee has specific questions related to our investigation of the boston marathon bombing, and the fbi refuses to answer those. for the fbi to allege that this committee does not have jurisdiction over investigating a terrorist attack in the homeland in the united states is a disservice to the american people. this committee will continue with its investigation. it not stop until our

investigation is complete. and haas, i ask unanimous concept that a written statement from bart johnson, the executive director of the international association of chiefs of police and a letter fromteve kelly, the assistant assistant director of the fbi for congressional affairs informing this committee that the if, bi refuses to provide a witness for the hearing be included in the record. without objection, so ordered. and with that, again, my thanks to the witnesses. it's been extremely valuable for all members here today and, i think, to the american people. with that, this hearing is adjourned. finish -- yep -- oh, i'm sorry, recess. >>ing up, the head of smithfield foods testifies about the proposed takeover of his business by a chinese company. yesterday the senate failed to overcome a procedural hurdle leaving student interest rates on subsidized staff ard loans at na returns in addressing

the doubling of student loan interest rates. live senate coverage this morning at 10 eastern here on c-span2. >> wildlife and forest management officials will testify about the recent fires in the west and southwest this morning. last week 19 firefighters were killed fighting wildfires in arizona. our live coverage of this natural resources subcommittee hearing begins at 10 a.m. eastern on c-span3. and later in the day, also on c-span3, a number of state department nominees will testify at a confirmation hearing. former state department spokesperson victoria newlin will be among those taking questions. she's been nominated to be assistant secretary of state for european and eurasian affairs. watch live coverage from the senate foreign relations committee starting at 2:15 eastern. >> now, a senate panel looks into the pending purchase of

smithfield foods by a chinese company. the ceo of smithfield, larry pope, took questions about intellectual property, product safety and the effect of foreign ownership of a u.s. food company. the senate agriculture hearing is about an hour, 30 minutes. >> good afternoon. good afternoon. the senate committee on agriculture, nutrition and forestry will now come to order, and before we begin the hearing, i just want to take a moment for our committee members to say again how proud i am of this committee in working together in a bipartisan way to pass the farm bill not once, but with twice, two different distinguished ranking members, and we know there are some challenges in the other body, but i'm confident that the leadership and the role models that we have set in working together will ultimately prevail. and so i just want to thank

everyone again for working hard, listening to each other, being willing to make some compromises in the interest of passing a bill and making agreements and sticking to them and working hard. and so, senator cochran, i want to thank you, also, for your leadership in doing that, and i'm proud that we've been able to get that done. from the very beginning of human history, we have seen civilizations rise and fall based on their ability to feed their people. that's why food security is absolutely essential to national security. and it's why food and agriculture are such an important and unique part of our american economy. not a day goes by that everyone in this room isn't reminded of the importance of a safe, affordable and abundant fad supply. food supply. it can be easy for americans to forget that food doesn't just

show up in the grocery store. sometimes i feel we have to remind people of that. it's a process that requires risk taking, sound business practices and a whole lot of hard work from the 16 million people whose jobs rely on agriculture. that's why the news of the proposed purchase of smithfield foods, the largest purchase of a u.s. company by a chinese firm, raises so many questions. smithfield might be the first acquisition of a major food and agricultural company, but i doubt it will be the last. that's why we must take a long-term view of what is happening. we need to be having this conversation and evaluating what is in the best interests of american families and our american economy. because the importance of our food supply and security and safety cannot be upside estimated.

underestimated. first is our approval process to handle issues unique to security and safety. important question. this is a precedent-setting case, and we owe it to consumers and producers and workers to insure we are asking the right questions and evaluating the long-term implications. last week senator cochran and i along with a number of members of this committee urged the secretary of treasury to include the usda and the fda in the review process of this transaction by the committee on foreign investment in the united states. and that's why we'll be meeting later today with officials from the department of treasury in conjunction with the banking committee so that senators can get briefed on the process. we also asked that this be the process in the future for transactions involving the food supply. i firmly believe that economic

security is part of our national security and that it should be considered when our government reviews foreign investment into the united states. unlike other countries, the united states does not currently undertake such a review, and i believe that needs to change. second, we need to evaluate how foreign purchases of our food supply will affect our economy broadly and, frankly, whether there's a level playing field when it comes to these kinds of business acquisitions. could this sale happen if it were the other way around? could smithfield purchase the chinese firm? based on what we have heard from many experts already, it sounds like the answer is no. i hope we can get some clarification on this point from our panelists today. we need to be evaluating the long-term market implications of this deal for american workers, pork producers and the farmers who with grow grain and finish who grow grain and field ingredients. despite the strength of

america's pork sector, smithfield has been struggling to make a profit, and yet the chinese company is offering to pay a 30% premium for the company. that, to me, raises questions about economic motivations of the purchase. are they focused on acquiring smithfield's technology which was developed with considerable assistance from u.s. taxpayers? as with all of our food companies, smithfield has benefited from years of public investments um proving food -- improving food rations, living conditions, environmental impact food safety and efficiency. can we really expect increased access for our pork products in china, a country that already produces five times as many hogs as we do? and uses barriers to keep u.s. pork out of their country? can we expect that after the company has adopted smithfield's excellent technology and practices they will increase

exports to japan, our largest export market? in competition with u.s. products? most importantly, will we see volatility in prices and other long-term economic impacts? in the short term, i know this deal looks good for our producers. this also needs to be a good deal in the long term. it's our responsibility to ask the right questions to make sure we're thinking in the long term about these issues. that's why we're here. one pork company alone might not be enough to affect our national security. but it's our job to be thinking about the big picture. and the long term for american food security and economic security. because as we all know in this committee and we've all said so many times, food security is a part of our national security. i'd now like to tush to my good -- turn to my good friend and ranking member, senator thad

cochran, and appreciate very much your leadership on the committee. >> madam chairman, thank you for holding this hearing. we are very anxious to learn more about the facts with respect to the proposed transaction that the committee will be considering today. we want to thank you, madam chairman, more your impressive leadership on the committee and the example you have set by the passage of the farm bill that still has us beaming with pride over the success of that undertaking. we likewise think it's important for us to follow your leadership again in the analysis and review of this proposed transaction between smithfield foods and chinese company, and -- because,

first of all, it's one of the most widespread if terms of possible economic -- in terms of possible economic impact. transaction or acquisition of a u.s. company by a chinese company in history. that's what we're being advised. but it's questions that flow from that that bring us to this point, and we're anxious for our witnesses to touch on that and things that we should know so we will appreciate the economic consequences for our country as well as the possible benefits that will flow to the individual companies that are involved. the u.s. economy be has long benefited from investments from overseas. we hope to be able to make some assurances or draw some conclusions about the consequences in advance of this

transaction that is under review today. we're proud of our american agriculture producers and our food processers and distributers. we have the best in the world, and with other proud of -- we're proud of that, and we want to keep it that way. but today we're here to listen to our witnesses to help better acquaint us with what we think we need to know. thank you for your cooperation with our committee. >> thank you very much. and we welcome all of our witnesses. we very much appreciate your time today. and let me introduce each of you. senator brown is going to introduce one of our witnesses, and then we will ask each of you to speak for five minutes. we welcome whatever written testimony you'd like to give us as well. also any other follow-up testimony after today that you would like to give us, we would

welcome as well. so i will introduce everyone together and then turn to our first witness. our first witness on the panel is mr. larry pope, president and ceo of smithfield foods. mr. pope has served as president and chief executive officer of the company be since 2006. he previously served as president and chief operating officer from 2001-2006 and vice president and chief financial officer from 2000-2001. from pope's over 30-year career at the company spans a variety of senior management roles and responsibilities which provide an in-depth knowledge of the company and broad experience in operational finance accounting and risk management matters. so we welcome you today. our second witness on the panel is dr. matthew slaughter, associate dean for faculty at tuck school of was at dartmouth college. dr. slaughter joined the faculty in 1994 focusing his research on the economics and politics of globalization.

from 2005 to 2007, dr. slaughter served as a member of the council of economic advisers for president bush. recently, dr. slaughter has focused on the global operations of multi-national firms and on labor market impacts of international trade and investment. we welcome you as well today. our third witness is dr. usha haley, professor of management and director of the robbins center for global business and strategy at west virginia university. dr. haley's extensive research includes over 200 articles and presentations in multiple books that explore companies and business environments in india, china, southeast asia and mexico. her research on chinese subsidies has also supported trade regulations in the united states and european union. welcome. and finally, i'd a like to turn to senator brown for the last -- >> thank you, madam chair. and i want to introduce stan slane, commissioner on the

u.s./china commission. third term on that commission appointed by speaker boehner. formerly worked in the ford white house a few years ago, and dan slane has an understanding, a particularly good understanding, as you'll hear from his testimony if you read from his -- as you'll hear from his speaking today and see in his written testimony -- seeing china both as the net and the opportunity -- threat and the opportunity both that it can be and is to our country in terms of economics and in terms of national security. i think he has a particularly acute understanding of that, and i look forward to hearing him also as a former member of the ohio state board of trustees, he proudly always wears his lapel pen signifying that. [laughter] football season, academic season alie like. >> senator brown, you had me up to that point. as a michigan state university graduate, i need to have my green and white on today, commissioner. all right. mr. pope, welcome. >> good afternoon, chairman stabenow, reactioning member cochran -- ranking member cochran and members of the

committee. my name is larry pope. i'm president and ceo of smithfield be foods. i appreciate this opportunity to offer testimony to this committee today. at in this time i would like to summarize my written testimony which i submitted for the record. we at smithfield are very excited about our announced new partnership with shuanghui, the majority owner of china's largest pork processer. it provides enormous benefits for american manufacturing and americanal church it is a partnership that is all about growth and improving the agricultural environment in both the u.s. and china. the combined company expects to help meet the growing demand for pork in china by exporting high quality pork products from the u.s. this means increased capacity for u.s. producers. more jobs and processing and more exports for the u.s. economy. at the same time, we will

continue to supply our same high quality, renowned products to u.s. consumers as well as other markets around the world. in short, this partnership for growth is good for our business and for the producers and the suppliers with whom we work. the reaction from the u.s. agricultural committee has been overwhelmingly positive. the michigan, indiana, north carolina pork producers' associations, the north american meat association, industry leaders and numerous individual producers have expressed support for this transaction. growth is also very good for smithfield's employees and our communities. we have a saying, it will be the same old smithfield, only better. let me be clear, shuanghui inincludes to retain smithfield's management team, it's plants and all its employees. they recognize smithfield's best in class operations, outstanding food safety practices and our

46,000 hard working employees. there should be no noticeable impact on how we do business operationally in america and around the world as a result of this acquisition except that we plan to do more of it. shuanghui will honor our collective bargaining agreements in place as well as existing wage and benefit package arrangements for our nonrepresented employees. these commitments combined with the opportunities for growth created by this deal have elicited the support of the ufcw and our employees with respect to agriculture, we expect this transaction to drive growth and expansion not only for our growers, but for the entire u.s. pork industry. smithfield foods owns 400 hog farms and has contracts with over 2,000 family farms across the country. our agreement will maintain all of these contracts and arrangements. moreover, this transaction creates a terrific opportunity

through growth in exports for u.s. hog farmers to expand to meet the growing chinese demand. the integrity of our brand, our record of safety, the safety of the u.s. food supply and the recognized effectiveness of the u.s. food safety standards are key drivers of value that shuanghui plays on smithfield. our brands are the safest and most desired products throughout the world, including china. our combined company thus has every incentive to insure the continued safety and excellence of our products and brands. this transaction is about exporting high quality meat from the u.s. to china to meet their growing demand. this combination will not result in any u.s. imports of food from china. moreover, all food products imported into the u.s. are already subject to rigorous inspections and controls by america's regulators to insure their integrity, safety and

wholesomeness. u.s. pork producers are the best and the most efficient in the world. we have voluntarily sought review of this acquisition from the committee on foreign investment in the u.s. where the transaction is already undergoing a thorough review. i appreciate this opportunity to address the committee, and i welcome your questions. >> thank you very much. dr. slaughter. >> committee chairwoman stabenow, ranking member cochran and fellow members, thank you very much for inviting me to testify on these issues of how foreign purchases of american companies affect u.s. jobs and overall economic strength. in my testimony i will make three main points that together help explain the many benefits that the shuanghui acquisition should bring to smithfield stakeholders and to the broader economy. first, merger and acquisition transactions have long been the main strategy by which global companies establish and expand

their operations in america. acquisitions of u.s. companies by foreign entities are an everyday reality in today's global economy. indeed, here in 2013 there have already been nearly 500 such acquisitions, about three every business day. these transactions have long been critical for the united states to benefit from inward foreign direct investment. for decades the vast majority of new fdi into america has come in the form of m&a transactions rather than greenfield investments that publish a brand new -- establish a brand new company. the united states received $2 trillion in new fdi of which over 88% was accounted for by foreign companies buying american companies. the second main point of my testimony is that u.s. affiliates of global companies, despite accounting for far less than 1% of u.s. businesses, have long performed large shares of activities that lead to millions of the kind of high-wage jobs that america needs in this slow

recovery from the great recession. in 2010 the u.s. subsidiaries of global companies produced about 6% of all u.s. private sector output. they undertook 14% of private sector capital investment and u.s. private r&d. they accounted for almost 18% of u.s. exports of good, and they did all this while purchasing almost $2 trillion in -- [inaudible] from other u.s. companies. these contribute to high paying jobs in america. in 2011 these u.s. affiliates employed 5.6 million workers in the united states, 5% of total private employment, at a per-worker average compensation of over $77,000, more than a third above the u.s. average and at higher unionization rates than other companies. the third main point of my testimony is that all public information about the transaction indicates it will benefit smithfield's stakeholders and the broader u.s. economy by maintaining a high innovation enterprise.

a primary motivation for shuanghui is to questions and learn from smithfield's expertise from its strong management team, its leading brands and vertically-integrated business model. this accords with much of the pattern of inward fdi into america. consistent with this historical pattern, postacquisition smithfield plans to act largely as it does today. all key management teams remain in place, all wage and benefit arrangements will be honored with all employees, and no plants or facilities will be closed. there is nothing inherently worrisome or unusual about the chinese aspect of this transaction. what about the risks of state-owned enterprises? although soes remain prominent in china, shuanghui isn't one. what about possible risks to smithfield's intellectual property? ip theft in china has quickly become one of the gravest

threats to the global economic system and to innovative u.s. companies and their workers here at home. in this context it is important to see that the smithfield transaction offers exhibit a of the ideal solution to this great problem, an american company being paid by a chinese company billions of dollars for its ideas in a transparent, market-based deal. of indeed, shuanghui seeks to boost smithfield's exports to china to better meet surging pork demand driven by with rising household income growth in chinese families. these greater exports help reduce the u.s./china bilateral trade imbalance. there also appears to be nothing inherently worrisome about the food aspect of the smithfield transaction. as with many other industries, in food manufacturing global companies have long played an important role in the u.s. economy. these global food companies already today employ over 200,000 american workers. let me close by placing the

smithfield transaction in the context of an america that today continues to confront too few jobs and too little economic growth. the good news is there is a future in which america can create millions of good jobs connect today the world via international trade investment. a smooth smithfield purchase would send a valuable signal to china and the world that the united states welcomes inward investment at a time where it is especially needed. thank you again for your time and interest in my testimony. i look forward to answering any questions you may have. >> thank you very much. dr. haley. >> good afternoon, chairwoman stabenow and committee members. i have submitted my full statement to the committee which i ask is be made part of the record. i am currently professor and director of the robbins center for global business and strategy, west virginia university. i have researched chinese business and global strategy for almost 15 years. the point of my testimony is that this takeover provides long-term benefits to china and

shuanghui and short-term benefits to smithfield's managers and shareholders. the risks yacht weigh the benefit -- outweigh the benefits. this largest takeover of an american by chinese company will double the number of jobs tied to chinese direct investment. as australian and african experiences with china show, problems arise. after the acquisition smithfield will not trade publicly, and information come from chinese reports. this deal will affect food safety, how we do business and compatibility with our policies. in china politics trumps economics. no free market exists for china's food products, and arguments of efficiencies from global logistics fall short. when subsidies and negative externalities such as pollution exist as they do here, markets can no longer set prices.

u.s. pig farming is a consolidated, modern industry with economies of scale. the chinese pork industry is fragmented, small scale and low tech citizen the strategic industries we study. labor costs there were similar to food processing, under 7% with most from purchases. scale economies matter, yet in five years china moved from net importer to largest manufacturer and exporter. we found that subsidies give china that hidden advantage. free loans, cheap raw materials, energy and land and tech acquisition support. shuanghui's has a competitor with subsidies to net profits of 36%. pork be processing is a strategic industry for china. the subsidiary is the largest employer in the province's pillar industry. beijing access ending now -- indigenous policies also apply research in pork processing.

another bank will help with exports. smithfield could become the low est rung of the commodity supply chain. high value manufacturing would go to china. they could insert local hogs and reexport processed food back to the u.s. under the smithfield brand. but evaluating shuanghui is difficult. new horizon founded by former prime minister's son. in china annual reports and formal reporting relationships never tell the full story. chairman lung is a member of china's national people's congress that formalizes the communist party's measures. accounting data provide little data on these business/government links. company evaluations, pricing and other food producers' competitive positions. there have been outrageous food safety violations. they fed pigs the banned

chemical -- [inaudible] chinese food -- [inaudible] include glowing pork, cadmium rice, toxic milk, etc., etc., 16,000 dead pigs floated down a shanghai river in march. smithfield's larry pope recently said open your refrigerator door, look inside. nothing is made in china because american agriculture is the most competitive and efficient in the world. mr. pope is wrong. china shipped four billion pounds of food to the u.s. last year including l80 percent of the tilapia and more than 10% of frozen spinach. supermarkets displace food's country of origin. processed reported foods require no such labeling. ip protection in china is also poor. increased counterfeit food products in china will lead to loss of u.s. export markets. china is encouraging buying foreign food assets and farms.

smithfield is the first, and we should prepare for others as a matter of national interest. for high that smithfield -- china, smithfield probe voids benefits. -- provides benefit even to shareholders. in a conference call with analysts, the managing director said we want the business to stay the same but be better. today mr. pope echoed the sentiment. neither explained how smithfield would become better without technology or know how from shuanghui. the question that this committee should be asking on behalf of the american people. thank you for the opportunity to appear here today. i stand ready to answer any questions. >> thank you very much. commissioner slane. >> chairwoman stabenow, ranking member cochran and members of the committee, thank you for the opportunity to appear today. prior to serving on the u.s./china commission, i owned and operated three plywood factories in the china. the u.s./china economic and security review commission on which i served has not taken a position on this proposed

transaction and has not made any public statements on it. the views i present today are entirely my own. the purchase of smithfield is part of china a's far-reaching program aimed at gaining as much control of foreign supply as possible. i remain concerned that many of the largest chinese enterprises maintain strategic ties to the chinese government whether through direct ownership or control, preferential access to massive government subsidies or personal links to the chinese communist party. it's important to understand that the chinese government is really behind china's global economic expansion. why smithfield? with 21% of the world's population, china has only 7% of the productive farmland. the country suffers from severe water shortages in its northern half and extensive surface water and air pollution. when you couple this with the growing demand for meat, you can begin to understand the enormous

challenges faced by china's leadership and its agro industry. china does not have sufficient farmland to grow the feed stock required to produce the amount of meat and dairy demanded by their citizens. china is on track to spend a record amount on the purchase of food assets and farms. the drive for agricultural assets in south america, australia, africa and other locations has ignited concerns from lawmakers around the world. in my view, the purchase of smithfield by china is the first of what i would expect to be many forays into rural america. china's purchase of smithfield is driven by two major factors. number one, china wants some control over the commodity price of pork. with smithfield's commanding domination of the u.s. pork industry, they can have some impact on pricing. number two, the chinese want smithfield's valuable technology in the hog genetics. smithfield also has some of the most advanced meat processing technology and manure management techniques that help foster

industrial scale hog production. it's interesting to note that u.s. taxpayers help finance much of smithfield's growth through usda grants. now i'd like to turn to the potential impact this purchase may have on our economy. number one, shuagy r hui's -- shuanghui's takeover will shift to or own it by china to the the detriment of u.s. workers and buzzes. it -- businesses. it raises the question of whether allowing a chinese company is in the best interests of the united states. if this deal is approved, it open the tour for other purchases of -- door for other purchases. our agriculture and food sector is unusually concentrated with just a few companies dominating the market in each link of our food chain. number two, another risk is that this deal will do little to improve overall market access for u.s. pork. china is unlikely to abandon its policy of self-sufficiency meat

production. a more lickly result is a close -- likely result is an intracompany trade. given smithfield's massive output, it alone might suffice for china's limited quota of u.s. pork. number three, this deal has been promoted as a way to facilitate u.s. pork exports to china, but ultimately, shuanghui could export pork back to us. the adoption of the processing technologies will dramatically improve hog production in china and could allow them to reverse the flow of global pork products and if i approved, begin exporting to the u.s. they are expected to apply for approval to reexport pork products and may even apply to ship pork from hogs raised in china. number four be, providing foreign competitors access to smithfield's technology and intellectual property could disadvantage our domestic hog industry both here and globally. shuanghui is expected to adopt the hog genetic lines that could

weaken u.s. pork opportunities. they have extensive supply chain and distribution system in china and throughout asia with operations in japan and south korea. the merger would improve the position of the mainland china processing plants by sharing u.s. technology and expertise and potentially allowing them to undercut u.s. pork exports to the pacific rim. it will limit the ability of other u.s. exports to get a foothold in this market. in conclusion, i think it's reasonable for you to expect a wave of chinese investments into our food and agricultural industry as china becomes a global player and a fierce competitor in american markets. its political system and state capital ideology pose a threat. with that in mind, the commission many its report to -- in its report to congress last year made the following recommendation: congress examined foreign direct investment and assessed whether there is a need to amend the statute to, number one, require a mandatory review of all

controlling transactions by chinese state-owned or state-controlled companies investing in the united states. number two, add a new economic benefits test to the existing national security test that cfius administers and, three, prohibit an investment in a u.s. industry by a foreign company whose government prohibits foreign investments in that same industry. thank you for allowing me to testify. >> thank you very much to each of you. let me just start the questioning with something simple, if you can do yes or no, that would be great. and that is, and we'll start with mr. pope. if this transaction were to happen in the reverse, would china allow smithfield to buy shuanghui? >> senator, i'm not sure i'm an expert on reverse mergers into china. and so i would yield to those at the panel who have more expertise in terms of that.

but i know there are acquisitions, u.s. acquisitions into china, so i don't know -- i couldn't really answer that question one way or the other. >> when you and i met, you talked about originally looking at you're buying a portion of their company, they're buying a portion of yours. there was an attempt at that. what happened there? >> we had a discussion about five years ago about shuanghui buying 20% of smithfield and vice versa. we had that, and over period of time that did not, that did not occur. i don't remember any involvement of the chinese government approving or disapproving. in fact, i'm sure anyone in the government was with even aware of the conversations. and so i don't think there were any regulatory barriers to that. there were more business, there were more business issues associated with that. and we'd had subsequent conversation even since then. >> okay. thank you.

dr. slaughter, yes or no, could that happen in reverse? >> i don't know. i do know that china's amazing growth since 1978 has come in some basic sense by the government getting out of the business of running business. they had a complete command and control economy for decades. it remains a work in progress. >> okay. dr. haley? >> [inaudible] >> you need to turn your mic on. thank you. yeah. >> it wouldn't happen. and that same question was raised in a chinese blog, as a matter of fact. a big debate about it. and everybody said no there as well. and the reason is this is a strategically important industry, and as most people in chi in know, the power of the state has actually been increasing vis-a-vis private interest in china as a probe portion. >> okay. >> so this is no. >> commissioner slane? could this happen in reverse? >> absolutely not, madam chair. >> okay. i do have another question, i do want to say that, dr. slaughter,

one of the things that you said was concerning to me if i heard this correctly. you were saying that as we all know we have issues of intellectual property theft with china, this is no secret. it's been a huge issue in all kinds of industries, manufacturing and so on. then you said the ideal solution to the problem of ip theft is this situation which does that mean you think the ideal solution is for china just to buy all our companies and then they'd have all our intellectual property? >> no, senator. my point is right now we know that hundreds of thousands if not millions of american jobs are lost because of ip theft in china -- >> right. but why is it ideal? why is this, why is having a chinese company buying an american company the solution? that's the solution to ip theft? >> so around the world in lots of industries including the united states there's an active market among companies for the exchange of ideas. so companies create ideas

through their r&d and lots of different innovation efforts, and companies deploy those assets themselves, but a lot of times the motivation for m&a transactions across companies is preceasely to gain ideas of others, and so have market-mediated transactions like that is far preferable to theft. >> absolutely. i would suggest that following the r50u8s is prefer -- rules is preferable to theft as well. let me ask one other thing before turning the the colleagues. we've been told that shuafghui wanted to buy smithfield because they need more pork, but if that were true, american producers would be happy to do that today. right now. our pork producers in michigan would be more than happy if they would be allowed to sell into china which they are not. now, smithfield is a unique situation as an integrated facility -- business. but we spend $23 million each year to promote u.s. meat exports, but we cannot open the

chinese markets. they use illegal, unscientific food safety standards to block both pork and beef. i am all about exports. remember, the president's export council, i want to see us export our products. but it seems to me removing the unfair barriers from china would be a lot quicker and more efficient than just saying that the only way we can get in is if they own our company. that doesn't make sense to me. commissioner slane, i wonder if from your perspective, you know, if you might speak about this. >> yes. madam chairman, this is really all about control. and the chinese could easily go out and buy pork on the market. the problem with that is they subject themselves to huge price increases, and they learned in the iron ore and the coal his that it was better for them to buy the mines than to just buy the ore.