following along in your article of the constitution. .. actually borrowed the play book from the republicans. they go in to pro forma sessions. it's the senator equivalent of real real -- ralgting a bag of chicken

bones. they call the senate to session, gavel it order, and say we'll be in recess until tomorrow at noon. boom. because we do that, we're not in recess. so you can't use the recess appointment power. so the first question the supreme court has to decide is the exercise that the supreme -- that the senate goes through a real recess or not. in order, is it a recess during which the president could use the recess appointment power. yes or no. the second question, remember what the article -- the section of the constitution says. it said the president should have the power to fill all vacancy that may happen during the recess of the senate. the second question is does the recess have to arise -- sorry does the vacancy have to arise during the recess. can you use the tower fill a vacancy that aroads a long time ago? fade to black. fade up. why do we have it in the

constitution in the first place? remember, that the congress used to be out of session for months at the time. half a year maybe or more. then they would be far away and have to ride horse. if you didn't have a secretary of agriculture, rather than wait for the congress to come back, the president could use this recess appointment power. it's been used throughout our history. but in the recent decades, this has been a controversial thing. so the supreme court is going to have to settle the dispute. as they said, i hope both sides lose. i think both the arguments are wrong. [laughter] >> it's a huge deal not only for the mlrb it can invalidate a ton of decisions. everybody knows the political system is broken. and the nate conformation process is broken. this is the president's way of trying to evade the break down in some sense. and if the supreme court, as is very likely called that the

recess appointments are unconstitution signal. they have been very broadly be i the lower wrong lo probably wrongly. they don't care about it. they have to decide for i.t. it's likely resume they are unconstitutional. that could create even more of a catastrophe in for whether, you know, democratic republican, republican president whatever because it will strengthen the hand of the senate and the minority party and the senate. they put enormous hydraulic pressure on the nuclear options to get rid of filibusters on appointment all together and could -- it's a place with the supreme court because t not actively involved in the political process and doesn't feel how it is that it decisions will play out and tends -- their job is to interpret the constitution come map. thing is a very, very significant ruling not want to just for the mlrb but what will

happens in politic after word. it's like campaign phenomena. they set the ship to motion. the entire country can change. >> one thing a little bit different from campaign finance it's not necessarily an issue that breaks down on traditional. at least outside the court on traditional ideological minds because the battle has been going on so long. and i know that because we were involved in challenges to recess appointments during the george w. bush administration representing senator edward kennedy. and you had that point the bush administration deserving the recess appointment. there were a bunch of different surreptitiouses filed challenging recess appointment during the bush administration. and the court denied them all over an opinion by justice stephens. not dissenting from the denial but regarding the denial in which he said in ease sen we're not going act on this right now because it's not going to be used that often.

[laughter] you set up pressure to make the appointment. it's a lot of fun to watch. this is what john, who writes, catnip. lflt. >> it might be one of the cases that separate the idealish from the prague magics. we might see some strange thing. i'll break down the question. >> question about judicial activism. begins berg, last weekend, in an interview she charged her conservative colleagues of judicial activism. we know that is a term that scalia has used in introductory political science classes. we teach that. i'm sure law school you talk about it. does it have any value beyond just a rhetorical tool that the left and right throw at each other? now as we're seeing justices are

throwing at each other. does it have a value in modifying behavior from the pragmatist to the center? what are your thoughts on this? >> i don't think it has much significance. everybody knows the word is justice so overused and, i mean, the definition of an activist judge is a judge who ruled against your point of view. that's even that is a tricky measure. there are some laws that deserve to be overruled. and they tonight necessarily mean ideological or proor again any branch of government. so i think it's kind of a -- t just -- t rhetorical. doesn't have much meaning.

i agree with -- an the defense of marriage act. and both sides screamed activism at the other. there's no objective way of knowing that the supreme court that the constitution talks about equal protection of the law which is at play if both zig on some level. it doesn't tell us what those terms mean. the court, when it striking something down not has just the power but the responsibility to enforce the constitution. we the president to. t a important tool to protect minority right against legislative overreach. there's just no way for anybody faithfully to say or jectively to say this is what the constitution really means. if you exceed that you're a judicial activist. t very interesting to note the way in which the term is used. and that is conservatives really

used it in talking about the warren court. nixon and reagan and when the renner qis court got a reasonably solid major tip. the left appropriated the phrase of judicial activism and started talking about conservative being judicial activists. all of which is to illustrate the emptiness. and when you talk about something so complicate the -- the general public so you center to figure out a way in which you can say what you're going say in a form of a bumper sticker. it has really utility in that way. dwrom try to explain why you think that the majority in the voting rights act case is wrong but the defense of marriage act case is right in three sentence or less is nearly impossible.

>> would you comment, please, on the campaign finance case, and all the really significant ebbing tension of citizens united. if you think if we can increase the overall limit and contributions? >> well, first of all, what it is it's a case the supreme court will hear. as you know, in federal elections, elections of president, members of congress, and the senate. there's a limit in how much, you as a person, can give to an individual candidate. there also a limit on how much you can give to all candidate in that election. you can only give $25 00 per candidate for election. but terrorist an aggravate limit as well. that applies not only to candidates but also to political parties and other kind of political committee. the a limit is being challenged before the supreme court. by a businessman from alabama

who wants to give a lot of money to a lot of candidates and the republican party as well. t sort of like abortion. any time the supreme court takes up the question of campaign and money, there's always a question whether it will ever get back to the 1976 decision which it said spending money is one thing. contributing money is another. one is protected as first amendment speech and essence and the other isn't and can be regulated. >> and the first is citizens united. to distinguish the two. it's a campaign spending not a contribution. >> that's right. that's another distinction there. so the rule the supreme court used in the past too uphold limit on campaign contribution they have the tendency to be corrupting. you can get -- you make deal, you know, i'll give you a contribution to the campaign. when you get elected you'll help

me with the road project. that's the justification used repeatedly to justify limit on contribution. you let any individual show the give unlimited amount of money to pack. you let corporation and labor spend as much as they want. why shouldn't we be able to spend as much as we want too? that's the fundamental question here stripped of the legal niceties. and, you know, justice kennedy, again, has been one of the deciding votes here in viewing this -- he takes seriously the question of corruption. will the court continue to tholed that corruption analysis and say no there's a reason to limit the amount of money people can throw to the process. the more you throw in the more likely you are to get favors

back. personally i think it's not in the world. i think that the court is still committed this majority committed to the idea that the congress can limit how much money you can give to a particular candidate. either in a look like your bribe, the candidate or will be bribe the candidate. the individual candidate that's not before the court. >> that's right. that idea, sing fine. it doesn't make sense. the court is equally committed in the citizens united con technical. to spend money and not be speech. it's fundamental. it's not junior varsity speech it's the speech of the heart of the amendment of the constitution. it's the most important speech. the difference in a sense could not be more stark. one and -- which is you need to be able to spend money to speak in the process. runs up hard about the

restriction that doesn't line up the you. nobody thinks by givetology the candidate in texas and california and michigan or whatever you're actually somehow getting a quid pro quo from them. i think it will be a step forward. >> nobody thinks that. >> nobody who really understands the supreme court. the congress -- for one example. there are certainly people in favor of campaign finance restriction who believe it fashion nately. i think it inches in the direction incrementally of taking a harder look at the amount of money that are these restricted that are individual campaign contributions restrictions. i don't see it breaking down the wall and getting a constitutional ruling that says

like you can spend unlimited amount of money. you can now contribute unlimited amount of money. it's rapidly going away from me. under law enforcement ground and i just don't -- i think the line between spending and contribution is sort of blurred. and may be one of the decision. i think they are heading in the distribution now of pretty much dismantling everything. i think the corruption justification is in trouble. >> more questions? okay. >> my colleagues will say it's the only kind i'll ever ask.

i'm wondering about the court's approach to broader area of informing right and capitol. what i have in mind you might think of the industrial revolution and urbanization is kicking off the decade-long political struggle. they play a role in protecting baseline and capitol. and the west coast hotel and affirming a new regulatory era. a new approach to i couldn't make them feel the importance of having access to these digital materials to the information

dwrown all the information now locked up in copyright. and you wonder -- i know the irony the lochner of the information age. it's weird to say that. it protects existing capital by being activist and here by affirming congress and not expanding on the first amendment or copyright cause. i'm wondering if you see, and in particular -- copyright information privacy both private companies, you know, like google and privacy from the companies and the government. it seems like we're in the middle of the political storm. i'm wondering for the supreme court will play a role in this. >> i think the supreme court like to avoid playing a role in this that kind of political storm. >> back in the day beginning of the last century the supreme court used the constitution to protect a lot of these kind of

property right and said there's a due process right, for example. that invalidatedded a bunch of law that restricted your ability to enter to contract for the labor and that sort of thing. the supreme court has kind of gotten out of the business of broadly reading the new process cause with the significant exceptions. the notion of a broad substantiative due process right to protect something that might be -- being able to engage in contract for child labor the most extreme example. now so you a question new kind of property. t not firm, a car, an house an idea.

and basically the walt disney law which is the disney company has the cartoon and want to be able to exploit them longer and longer and longer. that's a situation where an argument of the made to invokes constitution against the property right. congress regular recognized the copyright and said that's restricting my free use of the information. weren't the supreme court using the constitution to present the right right? it was rejecting an attempt to knock down the property right. what you see is in these cases, i think two things. one is the supreme court as amy said not getting in the business of recognizing new rights. and when it does get in to these cases it is intended to read -- it is dependent on the kind of property. so the most significant body of cases is pat end cases. lot of informational property rights and patent.

i come up with a new drug. i come up with a new machine. the supreme court has been in the business of cutting back on those rights and saying too many things are being patented. it's inhibiting innovation. it may be owed to justin begins berg. it has broughtly copyright and refuse to knock down copyrights. i think this is a very much an area by area thing. i don't see it as an area with the supreme court is going to get deeply involved in recognizing new rights. the place where they run in to it most is privacy the government. we see those the government was able to follow you around.

i think that is how the justices are going do conceive of informational issues that is going to be in term of debate over your ability to keep things private from the government. not your ability to go on and idea in information and be able to exploit it economically. >> fist of all, thank you for being here. we appreciate you for coming to university of georgia. i have two questions about the health care decision in particular the chief justices northbound this case. first there was a lot of reporting on bad feelings caused by the chief justice's ruling on the taxing power basis for so the-called individual mandate. so my first question is have there been any after shock from

that? is that ancient history? has it had any effect in particular during the most recent term? the second question is as to the commerce power the two point of view. one is that the chief justice opinion was written very narrowly. as you know the chief justice concluded there was not a basis under the commerce power for the individual mandate. the other point of view is that this was something on the trojan horse that we can expect in the future the conservative wing of the court to be more aggressive in finding acts of commerce beyond the power. that's my question which is the more accurate characterization the narrow meaningless ruling characterization or the trojan horse watch out for what is coming in the future characterization. >> one of the odd thing about being a supreme court just sis to sit on the bench and have your colleague call you an

idiot, moron, bird brain one day and vote with you the next day. you just to get used to that if your a judge. especially if you're a supreme court justices you write your concurrences and december accept. they get over it. i haven't seen sign that affected the alignment of justice on issues or b they're mad at each other and won't go to lunch or anything. i just don't think it's

persistent to any way. they realize they're going to be in the bunker for many, many years together they may as well get along with each other. thing plus the silver recess helps by gones be by gone. i'll throw one other thing to the mix and answer the second question. unlike a lot of constitutions in washington, d.c., there's genuine republican between the justice for all of their colleagues. one senator may respect half doesn't other senates a lot. or maybe 20 there are a bunch who they think are idiots. same in the house of representatives and the same, you know, within the executive branch but the nine justice of the supreme court recognize that

each of the other ones complete good faith. they work super hard. they are completely committed. they're polite to each other. it's not a situation you may disagree very strongly the view of another just nice another case. it doesn't cause you as a member of the the court to lose respect for them in a they i think would cause them to really have it grind at you and youcare it in to other cases. on the second question whether dock trinally. just to frame it up. i was -- there was a part of the affordable care act decision that white individual mandate gets upheld the government's main theory that congress gets to regulate commerce in the u.s. economy and health care involves 62 billion in commerce. what are you talking about? why are you here? the supreme court said no it violate the commerce power.

what congress goat do is regulate commerce. it doesn't goat make commerce. what is happening here congress require people to buy sphurn. it's making commerce and exceeds congress' power. the question was is that conservative ruling going to you stated the question perfectly accurately. time will tell. i'm reminded of the abc show -- i thought some of that was blown. >> i agree. the whole premise of the case

from the view of the challengers was this law is completely unheard of. the law is congress request require you to buy a product. if you believe the premise of the case which isn't in the business then the dock perhaps the longer term conservative outcome is on the spending clause. there was another piece of the riewlting that for the first time ever put beneath to congress' -- congress lot of time isn't able to order the state of georgia you must go did x. do whatever you think is best.

and the supreme court in the health care decision with respect to medicaid funding said for the first time seriously no, you can go in front of. and said congress could not revoke all of the medicate funding if they refused to expertise up and down the role. that's a place where you can see real consequences coming. later on congress wants to try to make the states do something. that set of law congress' ability to yank back the pursestring is something we can see more of. we are out of time. i want to thank you all for coming. [applause]

this is where they would meet up and talk and have time together. despite him being in his 30 and her 20s they still to abide by the rules of the school and needed to meet somewhere were they super vised while on campus .

up next remarking from imf director on federal budget and debt ceiling debate making the way through congress. she talked about overall health through u.s. economy and being affected by the current government shut down held at george washington universal. this is about an hour. the professor attending and certainly all of you, the students, but in particular all of those involved in the student presentation. i would like to thank you for having organized and championed this event and i'm delighted to participate in. i would like to express our special gratitude precedent for

you invited us to use your facility next week. i hope you'll be joining us one of these days. at the moment we are gorped going z hassive construction work, which is going to prevent 188 finance ministers joining us next week for the annual meeting of the imf and the central bank from the facility normally available for them.

they have been kind enough to request the facility. thank you so much. i would like to the 50 studentses from george washington university who are going to help us next week shepard all of these important ministers and governors on central bank. they know how to get the way in the economy or we hope so. t not sure they'll be able to navigate through the imf through this building that they will have access to. and a special thanks to the 20 students for the last two months have been helping secretary of department here with us they have been helping us organizing the events during the risk --

i went visit them on the fourth floor of the building last week. they were busy like me. it was really -- it's great i know they are enjoying a good time. some good food which is -- [inaudible] i would like the start morning remarking of what will be the focus of discussion debate behind closed door or in the open air participating in the annual -- meetings of the imf and the world bank. i'm talking obviously. i would like to give you the preview and prestrew with a quote. whom i'm going it put my classes

on. he said not in miss goal but in his transition is pan great. other people say the destination doesn't matter. picking on his words of transitions it alies to a life. but it well applies as well to the global financial crisis we are seeing transitioning to something difference. it's that concept much transition i would like to use. i'm going to take you around the world and too cuss on another transition that has taken place, which is affecting the financial secretary.

five years we consider that the journey is not yet complete. the crisis is gradually lifted. we can see that it leaves multiple new traps suggestions at work. two in particular stand out. it's the new patent as well as the economy transition as well as the financial sector transition i referred to. recession generally lasting to one year sometimes a limb longer but not much. this one is clearly very unusual if only for the time it takes to be resolved. and the transitions that i'm talking about are the no going to last one or two years but at

least a decade if not longer. the difference because they're not just national transition that would fall national crisis. we have seen a glebal crisis. we will be seeing global transition. we are probably moving from the great depression from the great transition. this is obviously where the imf can best be used. as i said, 188 ministers, 188 governors of central banks, 188? because we have 188 members. we provide ab exceptional platform of corporation as well as the tools to support that cooperation. those tools will -- [inaudible] when you think imf. lending tools. we provide financial resources. but we also provide analysis,

policy recommendation on the by lateral basis of the multilateral basis. we provide them. that's not as well known a lot of technical assistance and capacity building. that's pretty fen what the imf is about. financial support, lending facilities, analysis, policy recommendations. that's what we call the surveillance activity. and technical assistance and capacity building for countries. one thing i'm sure of is that true great transitions a poll makers do it right it will be a positive transor make. equally, if they don't apply the right set of policy and don't coordinate it might be

derailed. what i would like to focus on the -- i'm going take you around the world. then i would like to narrow the focus on the financial sector transition we are seeing very much in progress. i'm going start with the economy. they still represent a big part of the economy. then i'll take you to the developing economies particularly a touch on the arab countries in transition. that's where we're seeing major development. if we start in advanced economy they will release the latest forecast. but overall the global outlook

we may still to the day subdue. in many of the advanced economy we're seeing sign of hope. what do i mean by that? it's looking up. financial stability is returning. the fiscal accounts are looking healthier. i'll return to that in a moment. nowhere is it -- and i hope will it be clearer than in the united states. we see it all around us. house hold are in better shape. the housing sector is looking brighter and the private sector is coming again. yet this year growth will be too low. it will be below 2% in the

united due to too much fiscal adjustment that is not tailored as it should be. criteria used built founder and long time president of hien kin -- hien kin. you've heard about the company? [laughter] decide where he would see a large sector of light and --

the other particularly in the housing factor which is certainly turn around at the moment. we look at the arise of the city. if they see many cranes as we see thement at the moment on the a lot of history of economy. you also have to look up or down depending on where you are. practicality is reality, actually matter. a lot. it's going through transition following a banking and sovereign crisis that threaten the very fabric of the monetary

union. now after 6 quarters of cob sective -- next year it will move to positive territorial-type territory. yes, unemployment at 12% on average throughout your area is a big, big issue. there are countries in your area where one out of two of you do not find a job. 50% of unemployment of young people at the moment in countries like spain and major challenge for them or all of them. this challenge is more -- your area pushes on with integration. based on the belief of the strongest house is the one that is built together doing away with more.

it is that integration is -- japan -- japan too is going through a transition. is anybody in japan in the world? you are diverse and from all over the world. japan has gone through almost 15 years of recession of deflation. japan is turning around because of the completely new set of policies adopted by prime minister what is going to be done with fiscal con some dedication, the recentlet look

quickly at the various policies that are available. what other tools in the toolbox of policy toolbox? the first first and foremost and probably protected us from the complete melt down is the monetary policy. monetary policy has to play role in each region. what is applicable in the u.s., for instance, doesn't necessarily affly europe or japan. most people think the u.s. policies -- unconventional measures begin soon.

now view this term needs to be managed very carefully. but also other markets around the world. so in our view, it has to done gradually. it has to be done with good communication and -- it will be part of the landscape for a listening time. beyond the united states i've mentioned in your area still has a bit of room to maneuver and can use it to stimulate the economy. you have japan where the program underway in the innovation will certainly be needed as well.

and situation is -- they have to take measures. what can they do. what tools can they use? it's financial, fiscal and structure. it's all three areas have to use the three. but with a different example of this. for each of the three. starting with financial, the financial tool has to be used in particular by your area. where is that? there are still parts of europe is being pommeled by weak banks, high corporate debt, fragmented financial sector.

the financial the policy that not allow for proper flow of money too much fragmentation. it is imperative in our views that european banks be restored to health by affecting haas the financial tool. turning to the fiscal tool.

upset about thest u.s. fiscal policy slue down but hurry up. that's our position. slow down what we mean by that is don't do too much upfront. the fiscal policy doesn't have to be massive right away. hurry up. in the medium term it has to be an anchoring in the confidence of people that actually the fiscal consolidation is going to take place so the trajectory of the u.s. debt is turned and have to also raise revenue. and the in midst of this

challenge, you know, slow down and hurry up is not an easy thing to do. in the midst of that, the ongoing political uncertainty over the budget, over the debt ceiling does not help. the government shut down is not enough but failure to raise the debt ceiling would be far worse. people around the world are benewsed by what is happening in this country because it will affect the global economy if it were to materialized i personal have huge trust in policy makers. i hope strongly they'll find a way to resolve this issue.

mission critical. japan also needs -- does any of you know how much is the japanese debt for gdp? roughly -- what did you say? very close 250% of japan's gdp is the debt of the country which is roughly $90,000 per capital. each japanese baby was born -- there have to be enough fiscal

measures to the debt can turn downwards. fiscal -- pretty much all mentioned by structure measure. we know they can pay off where it matters most. in area, for instance, there are a lot of barriers and vested interest and lot of constraint that apply to the product market and the labor market. that was addressed. it was applied uniformly and well in the country. if we look at japan, i was referring to babies. well, if japanese women were

given the same access to the labor market, the average in the g7 countries of which they are a member it would boost gdp by about 4% by 2030. that's a big number for an economy that needs additional platform because simply aging and not a very open economy when it comes to immigration. we should remember why did i spend so much on the advanced economy in say that together represent 40% gdp globally. it is actually important. it affects through the various channels of financial and trade the rest of the world. and we're going to look at the rest of the world. let me tosh the emerging market first then we'll look at the low-income country and the arab countries in trans--

transition. which were tough but somehow -- because they have to restructure and consolidate, they have to leave one the unhealthy part of the economy of the banking system. thigh move toward -- 80 percent of the global of gdp. what is the ultimate goal of the emerging market country? country in transitions by any means? they want to make sure that the living standards of the population is improved and is much closer to that of the advanced economy.

with growth that are 2.5 percentage points lower than 2010 and growing very, very fast. some of them today will say that it's actually healthy slow down in the a lot of the slow down for the emerging market which is attribute to the economy cycle and clearly the papering of the monetary policy has a roalt to play. but it also more deeply rooted in structure impediment. what happened over the last five years. central bankers rescue the global economy. in doing so, a lot of money around and a lot of capital flew to the emerging market

economies. by over $1 trm which is more than 2 percentage point of gdp a year. now that markets are getting jittery over the end of easy money, the financial time is starting to recede. it's receding in different ways depending on the country. i think that is where the fundamental of the economy have a role to play. you look at korea there's not much capital outflow. there's a reason. it could reduce gdp by half to one percentage point in major emerging markets.

what tools can they use? what is the immediate priority in our view is to try to ride that turbulent moment as smoothly as possible. currencies should be allowed to depressure -- deappreciate there's not much room to maneuver in countries with inflation which is certainly the case for duns like russia, india, like indonesia, like brazil. like wise there's not much space left for fiscal policies because some of those countries already have high debt. some countries need to knock

down some of the barrier to the flow of product and financial. by doing what? removing sop of the red tape inspect is certainly the case in countries like india or brazil where the deepen of the financial market and the opening of trade regions would go a long way. in this day, china needs to keep moving that will be less based on credit growth, which has, you know, hit about 180% 6 gdp at the moment and more on higher productivity, higher income, and higher consumption. that means -- i encourage you to look what is happening in the shanghai trade. this is a new initiative.

very interesting to watch. a lot of what i have mentioned is probably going happen. all these transitions and massive changes are not going to be fast or easy. the countries will likely spend the rest of the decade adjusting to the new reality. as part of the adjustment they need to corporate with each other and other economies as well. there are spill overeffect from one domestic set of policy to other regions of the world. and certainly we will be only too happy to help with the corporation using only one of the two or three business segments if you will that i described earlier. if we have the low-income companies the same must be

true. these two in the process of transitions. i know the answer. low-income countries moving at fast growth rate at the moment you will find -- yes, you're right. africa. that's where after emerging asia. and emerging asia countries moving a little bit faster. but the bulk of the solid growth over the last few years has been coming from the low-income countries. predominantly in africa. it has been around 5%. the transition yet is not without risk. low-income countries, in a way, they sit between the advanced

country and the emerging market. in these regions it means more from guilty in low-income countries. they essentially depend for the trade of commodities in particular without -- from what is happening in the other region. so these countries, they need to take action. ..

before i jump now to the financial transition, i want to say a few words at the arab countries in transition. there was a lot of talk about the arab spring. the proper description, because it is going to be more than a season -- is arab country's in transition. and the ongoing quest to build more open and more inclusive society. in this region the economy is in political and public transition and increasingly challenging, and much of this is wrenching. how can you not be deeply concerned and moved and horrified by what is happening in syria, for instance, where

people -- lose their life, lose their home. what does the imf have to do with it apart from being human being and being concerned about senate we are concerned because the economic situation actually matters. and we have to help them keep the drum beat for economic reform. this means breaking down vested interests to harness the willingness to invest by the private sector and create jobs for all those who need them. you remember, i mentioned one out of two of you not having a job in some countries. well in many of the arab countries in transition, it is the same. a lot of young few -- few tutu few -- -- and means bringing the fiscal deficit down.

some are running deficits that hit almost the 15% mark and that's an issue that needs to be addressed. they need to do it at the right pace and we're not suggest that i go have to rush, cut down on public spending. those see sites will not put up with it. so they have to do it at the right pace, but do it and stick to it. as well as they receive external financing and not just from the international institutions. we are there, we will continue to hang in there with them as partners. but also from the international community. and in many ways, that transition is one of most complicated of the ones that i've described, and will probably take longer than all the others. but to succeed it needs the unweaving support -- unwavering support of the international community. we're very engauged. we have a partnership and programs injure way in morocco, jordan, tunisia.

doing massive capacity building in libya and we're entering into new negotiations negotiations ak we'll talk to the egyptian authorities. [inaudible] >> that was a nice way to introduce my next and final transition. because we have looked at the big movement, the big things taking place in the economy, and they take different courses and shapes and different sets 0 policy and require coordination and cooperation between the countries. that's one that is affecting all continentses across the board and that's the global financial sector that is going through a transition, that needs to go through transition and that needs to really be serious about this.

mr. president and madam president, our finance minister in the g-7 countries and i was appointed in that position in june of 2007. i was hoping to have a few weeks off in august. as many do, including the french. and guess what? full four years there was no august break. markets went down, lehman hit in september of the following year and on and on and on. so when i say that under the old model, the one that prevailed in those days, the financial sector took an oversized risk for outside rewards, causing outsized ruin and that has really led us to the experience that we have lived in the last five years.

now, since then, international community has been struggling to build something better, and it is not easy. it means throwing away old blueprints, and designing new ones. it means dealing with the perverse incentives of financial friend and the inability or unwilllingness of authorities to actually act. how is this transition doing? it is happening. in the imf assessment -- i said earlier that the current issue about budget and debt ceiling was mission critical. on this one i would say that it is mission not yet finished. we have seen progress. higher capital standards, that apply across the board. they are being implemented. we have agreement on knew liquidity standards and plans to keep hack seeries in check.

we have moved forward in identifying the systematically important institutions and holding them to higher standards for both regulation and resolution. but progress is too slow. it is being held back by complexity, but also by delay and divergence, and like all good business, the g-20, for instance, has an action plan. and you take check the box as you move on. we've done this or that. since the g-20 meeting in london, which was the one immediately after the washington one, which started the g-20 as head of state travel, many, many of the boxes have been ticked-but where there is delay is in the financial sector reform, which is interesting. so we have seen delays. key concern, for example, is the lack of progress in establishing

effective cross-border resolution regimes, frameworks and agrandmas to unwinds at the the global systematically important institutions and market infrastructures in an orderly way. that's is what was' missing at the time of lehman. remember? entailed collapse across the globe, counter-policies, uncertain advertise, tote -- instant certainties and lack of transparency. this is late coming. the same is true for the derivatives market reform. lack of transparency still a huge issue. there has been progress, granted, a agreement between the cftc and the europeans about better transparency, but at the end of last year, deriff tips amounted to $633 trillion of which only 24 -- 24 trillion only -- were traded on organized exchanges. the rest are huge and it really

needs supervision, and we need speedy agreed derivatives reform between the various markets. another danger zone is shadow banking. i'm sure you have heard about that. it's attracting a lot of risky activity. in the u.s., the nonbanking sector is now twice the size of the banking sector, and in china, about half of the new credit that is issued, this year, has been extended through the shadow danking system. -- shadow banking system. so shadow banking system, working on maturities, but with very little by way of supervision and regulation. there has been some progress with the adoption of principles for money market funds and proposals for regulating securities lending and reposts. for sure, nonbank financial enter mediation can provide a valuable alternative.

so we're not saying that shadow banking should be eliminated but it needs to be made a lot more transparent and much more overseen. that's for the delay. how about divergence? the problem here is that if they are divergent in the financial sector, it's like pulling a fabric in different directions. because money moves around in nanoseconds, but if there are divergents, you create arbitrage options and you endanger the whole system. we have already seen some evidence of discrepancies in capital requirements, for instance, different interpretation of the capital ratios, different countries have also taken different approaches to business market restrictions, such as the voelker rule in the united states. so putting this together in a

globalized world is a bit of a headache and yet it must be done. nothing less than global financial stability depends on it. is that something that is just incumbent on the regulators, the policymakers? no. the financial sector has to also make some serious decision. it is their responsibility because it's the survival and the continuation and the growth of the activity. the new rules are changing the economics of banking, and banking will probably change. it is likely that some of the largest banking institutions will not do as much by way of financing infrastructure projects, for instance, or project financing, or mortgage lending, and it's very likely that the footprint of those international banking institutions will change. we're seeing that at the moment. now, this must be taken into account when designing the new

framework. what is ultimately important, is that the financial sectors stay focused on what it is expected to do for the economy. to serve the financial -- to serve the economy, it should provide the financing, it should mature money. it should move it around. it should finance investment and innovation. old habits die hard. so it will take time. but it can be managed, particularly if all parties unite around shared goals. this means industry and regulators accepting co-responsibility for the public good. that means countries acting in harmony so that the new financial framework looks more like a color coordinated mosaic rather than a clash of unmatched colors, a monet painting.

is that mission impossible? no. so united we can get there let me conclude. in those two major transitions that i've tried to display for you, economic and financial, international community faces a common challenge, make sure that all can gain from globalization, and prosper in our increasingly interconnected world. you will be reading now and in the next few weeks or months, books published about the very tour of retiring to your own purse, less opening of the marks. more protection, more restrictions e.r.a. industrialization here and there. well, that's probably because the global financial crisis has shaken the faith of many -- in the virtues of being open and engaged with the world.

if we manage these transitions well, in the best possible way, it will demonstrate the benefits of interconnectedness, which have been enormously beneficial so far. the reason so many people have been lifted out of poverty, the reason why those low-income country will be the frontier economies is because of the openness of markets, because the liquidity and fluidity of movement. now, this can only be didn't if countries work together. in the belief that mutual help is also going to the best form of self-help. as you say in latin, prom omnibus. don't need to translate, but just in case for all and for each. what is good for all is going to benefit me. now, as i said at the outset, this is exactly the function of the imf. our job is to help countries

manage transitions. we have done it in the past. imf was set up in 1945, right after the second world war. and the first country to have a program with the imf was actually my country, france. so we have helped many countries in transition after the second world war, pretty much all over europe. after the iron kurt top came -- curtain came down we helped all the central and eastern european countries that moved and transitioned towards a different model, and we are doing it again for the arab countries in transition. we are helping the low-income countries in transition, and we are also helping so the countries going through their transition. that's what we're doing. we have to continue helping, and i have begun with a quote by emerson. i'd like to finish with a quote by one of my french favorite

writers. he said, i'm translating -- don't walk in front of me. i may not follow. don't walk behind me. i may not lead. but walk beside me and be my friend. this is what i see and what i want the imf to do, to continue to partner with those countries that are going through this period of great transition. thank you. [applause] >> thank you. i can have a drink now. >> i'm professor foster. irene foster, i teach in the department of economics, and it's my great pleasure to have a large number of very bright, interested, passionate students,

some of them are going -- i think it's the older guys that are leaving. it's only 11:10 but they're all here. they listen, they're passionate about making a change in the world so thank you for you very inspiring talk to us today. i understand this is also the theme of the meeting, and it's a challenge to talk to countries about changing their patterns of economic growth, thinking about how they structure their financial sector so thank you very much. we have a few minutes when madam lagarde agreed to answer some questions. so if you're a student, please come up to the microphone and tell us your name and ask your question. while people are coming up to the microphone, i think i have to -- here's a question right here.

>> hi. i was actually wondering, where do you see the leadership and strong economies like singapore with regards to future economic growth in southeast asia and the asia pacific region. thank you for your talk. >> good morning. singapore is actually in a good geographical spot, and it's clearly one of the advanced economies in at that time part of the world. asia-pacific is fascinating because it has some of the most advanced economies, quite a few low-income countries, and has the small pacific islands as well. so as an area, it's fascinating and full of challenges. singapore is actually hosting an interesting initiative taken by some of these countries in the area, which is called the -- where they decided to actually in coordination with the imf, they decided to pull their resources together and to be able to help each other in case of hardship. so singapore plays a role in that area, which is clearly

significant. the finance minister of singapore is the president of the imfc to which i report. >> i'm rebecca, a freshman in the columbian college. i have a noneconomic question. as a whom who has ascend the ranks of a male dominated field, hey how have you struck a balance in your leadership. >> i try use humor as much as i can. so i try not to take myself too seriously. and i try to instill in my partners, the people across the table, those with whom i negotiate, a little bit of humor. life is beautiful. it's tough as well. but we need to keep a smile on our face. so i try to use humor, and to remind all that as madam clinton would have said, women's right are human rights.

>> my name is arshan and i'm a freshman in the elliott school of international affairs. i was wondering if nations with emerging economies such as india and brazil, have the internal infrastructure to sustain long-term economic growth? >> that's a really good question. if you ask me, in the emerging market economies, which countries need to absolutely focus on infrastructure, they are the two. not to say that russia should ignore it, not to say that south africa is fully equipped. but it's clearly the case that india and brazil need to really focus on that. there are initiatives underway. the g or 20 has clearly identified that as an area where there has to be financing expertise and a political determination, but i would -- if you ask me, i think monitoring

inflation in india and investing in infrastructure that will be helpful to unlock the huge potential of india. those are the two on my list. thank you. >> hi, i'm anna, and i'm a freshman in the elliott school of international affairs. coming from mexico city, i'm interested in what do you think is the role of latin american countries in the global economy and what do you think are their challenges to become dominant in the world? >> the latin american countries have come a long way collectively, and while there's a lot of focus on brazil and the policy that brases sill should apply to sustain its growth, which is ticking up now, all latin american countries have either significant resources or in the process of good developments, and they face

different challenges. some of them are very much dependent on commodities. i think of chile, for instance, largely dependent on copper, and where the price of commodities is going do have a significant influence on chile. some of them are going to be major oil producers in their own right. brazil being one of them. and there are also some very strong economies that need to be careful with the risk of overheating, actually. if you look at chroma, for instance, which is going very -- colombia, which is going steadily, that's where they into be careful and use the monetary policy and the fiscal policy i referred to earlier. i would say the same is true with peru, where there is a bit of overheating as well. but it's a whole continent that is really on its way and more than emerging.

>> my ima senior in the elliott school of international affairs. thank you for coming to speak to us. we really appreciate it. my question pertains to something you mentioned during your speech. you mentioned the role of easy monetary policy and bailing out the financial system following the 2008 collapse. now that as you say the sort of shadow, the fog of the financial crisis is wearing off, when do you feel is the appropriate time to start tightening monetary policy, especially considering even at the mere mention of it economies steam to tumble. -- seem to tumble. >> we think that tightening is way down the road. we're is not there. by tight 'ening you mean sort of increasing intrastate essentially, but tapering -- and gradual tapering, which would mean lower programs of purchases by the feds is something that should be coming if the economy

improves. and certainly we value the thought it will be associated with specific reverends, criterias, and indication of how the economy is progressing and how stable and sustainable the progress is in that vein. in our view it should -- as i said earlier, should be gradual, should be aligned with criteria and indications of how much greg there is on and how stable it is. it should be -- there should be a dialogue with others, because decisions made here can have spillover effects. downturn or instability of volatility there can backfire. it's very interconnected and fully justifies the dialogue actually exist. thank you. >> madam lagarde, thank you for coming out. i'm a sophomore in the elliott school of international affairs here, and my question is regarding, you mentioned the

importance of subsaharan africa and the growth out of there many people are concerned with the political unstable in the country and the corruption in that region, and i'm curries -- curious if you think that be focusing on economics that's will elim nat they question or take care of corruption first before investing in the area. >> by conviction and by training, i'm convinced that transparency is critical and can actually help solve some of the issues you referred to. things that become exposed suddenly become unbearable and cannot be justified, and transparency is a two-way street. but equally i believe that we need to continue supporting the reforms, helping with the fiscal monetary policies and reform of the financial sector, in order

to help those economies move along. i think economy growth can be one way. one of the ways -- not the only one -- to actually address this plug that hurts those economies. >> i believe we have time for one more question. >> yes, okay. >> hello. >> good morning. >> i'm a second area market of finance student at gwu business school. i have a question. for the last ten years, china's economy is the largest -- especially its aggression, largely relies on the credit growth. especially for the real estate investment and labor, china has a lot of population so their labor is cheapful right now our prime minister established the shanghai free trade zone. so, my question is that in your opinion, what can -- opportunities in china for the next five or ten years?

thanks. >> hoo. i don't have the number off my haven't but i wouldn't be surprisees if china was the second destination of investment in the world today. so, investors are who are making those decisions are seeing opportunities in the whole of china. when -- the reason i focused on the free trade initiative in shanghai, this is a very subtle approach by the chinese authorities of your country, to actually experiment the difficulties and potentially develop what will happen in that free-trade zone. it's not a huge zone. it's quite restricted in geographical terms, but the degree of freedom and the liberalization that is announced, would certainly entice investors to actually focus in that particular zone.

i think the equally monetary policy of the chinese monetary authorities to actually rein the growth of credit to avoid the risk of boom and bust, particularly in the real estate sector, is very, very welcome. thank you. >> please join me in thanking madam lagarde for spending her very valuable time with us today, inspiring us. i want to wish you all the very best as you begin your meetings this week. and i want to remind you all, she is watching you from her window, and so please study. thank you very much. [applause]

[inaudible conversations] >> today we're at warren school in billings, montana, and we're on the crow reservation. there's 40 students at the school. one of the few one-room schools

left in the area. bring books, videos, cds and things out to residents of yellowstone county. the library just has the one main branch downtown. as part of the outreach program we like to get things out to the outlying residents. people are spread out in montana. >> we have 30 second left. there so if you are able to check out and you have not done it, please come up here. >> doesn't want to cooperate. until we can get some branches out in the county, this is probably the next best thing, butt i think the bookmobile has its own unique appeal because it's a really fun way to bring books to people. books and videos, and we're very lucky to have this wonderful truck. >> more from the bookmobile this weekend as booktv and american

history tv look at the history and literary life of billings, montana, saturday at noon eon c-span 2, and sunday at 5:00 on c-span 3. >> here's a look at our schedule on c-span2. up next, form senior fbi official testifies before a house committee on the militant group al-shabaab. and then supreme court bloggers and reporters discuss the roberts court and what is ahead in the upcoming supreme court term that starts next week. after that, remarks from imf managing director christine lagarde on the federal budget and debt ceiling debate and howl the government shutdown is hurting the u.s. economy. >> yesterday, a former senior fbi official testified before the house foreign affairs committee on the militant group, al-shabaab, and he feels kites become more of a global threat

if the yates won't counter its influence. al-shabaab is the group that took credit for the attack at a kenyan shopping mall. this is just over two hours. nod conversation [inaudible conversations]

>> this hearing will come to order that this time. today we're going to meet to assess the threat of -- i'll just ask all members to take their seats at this time -- today we're going to discuss the threats from al-shabaab, which is al qaeda's franchise in the horn of africa. we're going to discuss the threat that it poses to somalia, the threat to the horn of africa, to the region, and the threat it posts to the west, including the united states. al-shabaab translates to, the youth. and that organization officially swore aledge januaries if you recall last year in february to al qaeda.

al-shabaab has been primarily focused in the past on attacking the young somali government because the focus on al-shabaab was establishment of a very extreme form of sharia in somalia. and they continue their attack on african peacekeepers that came into that region that were working to secure that country, but this is changing. this is evolving. and the dramatic attack on september 21st on the westgate shopping mall in nairobi, kenya, demonstrates al-shabaab's ability and demonstrates their desire to threaten civilians throughout east africa, and in this plot, you had 70 killed, over 200 injured, very common knowledge, if you're going to attack a mall, most of the adults in a mall over 70%, are

usually female and many will have children with them. so this planned attack obviously was focused on maximizing the psychological damage. several americans were wounded there. this is not the first time that this group has carried out this type of deadly attack in the region. if you recall, the attack in uganda, july 2010. there were a series of bombings begins civilians, watching the first world cup match in uganda. 74 were killed there by al-shabaab. many more injured, including, by the way, one american killed there. today, we are joined by the fbi agent who led the bureau's investigation into that deadly al-shabaab attack in uganda. last year, about a quarter of al-shabaab's attacks took place in kenya. so that's a significant

increase. for al-shabaab, these attacks are retribution for a neighboring country's contribution to troops, to the u.n. authorized african union peacekeeping mission in sew malia. this peacekeeping effort, which has made great strides are has become strongly backed by the united states, by the african union, by the european union, of considerable concern, al-shabaab have demonstrated a unique ability to recruit young members of the somali diaspora community, in europe and the united states, convince them to travel to somalia and convince them to join the fight. u.s. africa command suggest these forefighters, their word, remain the greatest threat to western interests regionally and internationally. one witness today called the united states a, quote, primary

exporter of western fighters to the al qaeda a -- affiliated group. one of the first americans to become a south dakota bomber carried oust -- a suicide bomber carried out his aknack somalia. online videos shown here in the united states and shown in britain, promise potential recruits a glamorous new life and we'll larry today about one effort in the somali american community to counter such propaganda and recruitment. we need to be on top of this al qaeda aligned groups reach into the u.s. al qaeda leadership recently encouraged sympathizers in the united states to carry out smaller but still deadly attacks as individuals. or in teams of two or three. and such strikes on the u.s. soil could be similar to the one al-shabaab launched.

al qaeda elements have proven they're able to aspire and to train attackers. and they've done this primarily over the internet, as dem moon straighted -- demonstrated by the boston marathon bombers and the fort hood shooter. two years ago, when dr. jones first appeared before this terrorism subcommittee that i chaired at the time, to discuss the future of al qaeda, we discussed al-shabaab, and at that time the head of britain's mi5 was warning that in his words, it's only a matter of time before we see terrorism on our streets inspired by those who are today fighting alongside al-shabaab. that was at the british view at the time. given our support for the african peacekeeping mission and the fact that the u.s. remains a top al qaeda target, we need to get ahead of al-shabaab's efforts to radicalize vulnerable youth. and we need to do that before

that statement applies to streets in the west. so, i will now turn to our ranking member, mr. elliott engel, from new york, for his opening remarks. >> good morning, mr. chairman, and thank you for holding this hearing, and welcome to our panelists. we're here today to discuss al-shabaab, somalia based terrorist organization that continues to threaten the horn of africa and western interests there. two weeks ago, as you mentioned, group of heavily armed terrorists storms the westgate mall in nairobi kenya, al-shabaab claimed responsibility for the heinous attack, as punishment for kenya's involvement in the au mission there. after a four-day siege the attackers were finally overpoured, but not before murdering at least 67 men, women and children among them the wife of a u.s. foreign service national who was seven months

pregnant. while attacks by al-shabaab in kenya are not new, the westgate mall attack was particularly ruthless. the worth terrorist attack kenya has seen since then 1998 al qaeda bombing of the u.s. embassy, and raises important questions for kenya, the international community, and members of congress as well, about al-shabaab's size, strength, and intentions. for many years, al-shabaab controlled most of somalia. it imposed a brutal form of sharia law. one illustration of their completes complete disregard for human life, al-shabaab banned most organizations gaining access to large parts of the country during the devastating famine in 2011, lead though deaths of thousand office somalis. in late 2011, kenyan forces joined the african union mission to somalia, and helped to

finally turn the tide against al-shabaab. they have had a number of successes against al-shabaab. first by expelling the group from mowing deep -- mogadishu and litter from a significant source for the terrorist group. despite these successes it seems they've reached is physical limit of expansion in somalia. while al-shabaab has been deprived of valuable territory, it continues to cause military and civilian cash advertise inside somalia with new girlll -- girlll la tactics. all of this must lead to us ask is al-shabaab as weak as we thought it was? should we expect more attacks of this scale and perhaps of other countries, such as uganda, have internal struggles of shark back

made the group more focused on jihad? i understand its difficult to say anything definitive about an organization as shadowy as al-shabaab, but given this latest attack we must recondition what we thought wi knew about the organization. finally i would like too take a moment to highlight the significance of the very large somali refugee population in kenarch which is another facet of this complexion picture. after decades of war and instability in somalia, it's not surprising that there are nearly between one and two million somalis living in kenya today. it will be tempt fog their kenyan people and government to blame somalia for their insecurity and call for somali rev few gees to be sent home. i hope it does not come to this. kenya has long been one of the world's most generous host country. the fact that the refugee camp constitutes the second largest

city in the entire country is evidence of this. i hope kenya will continue to provide a safe haven to those fleeing from violence, hunger, and constant fear. i mention this not only because of the humanitarian implications but also because it has a very real bearing on al-shabaab's ability to grow its network, recruit, and operate in kenya. i think it will be valuable to hear from our panelists on what they think kenya can do with respect to somali community that would help impair al-shabaab's operations and, conversely, what actions could make the terrorist threat even worse. so i'd like to thank the chairman once again for holding thing hearing, and i look forward to the testimony of all witnesses. i yield back, mr. chair. >> thank you, m-engel. we go now to mr. chris smith of new jersey for one minute. the africa subcommittee chair. >> thank you very much, mr. chairman. last week staff director greg simpkins and i were in nye year

ya,, -- nye year ya, and heard from christians who were survivors oar fire bombings and a murderous campaign by a sister type organization to al-shabaab. we need to recognize more fully, i believe, the threat posed by these cowards, these terrorists, who are slaughtering people and as we all know the reason why the kenyans were targeted is because they had deployed peacekeepeses to bring some kind of peace and stability to somalia which has suffered for so long under the grip of al-shabaab. i point out that there was a statement made by al-shabaab, pointing out that they will intensify, we'll strike kenya where it hurts, turn their cities into graveyards and rivers of blood which they say will flow in nairobi, to its credit, kenya has not turned and ran strongly. the kenyan president, uhurrah

kenyatta, has said we will not be intimidated. we will not be cowed, and talk about keeping his pastekeepers on the ground to bring some semblance to the country. we need stand by the kenyans, and the somalis, while people were watching the world cup, were slattered slaughtered by al-shabaab because uganda deployed peacekeeps as well. so we need to do more to support this because this growing intolerance, this hatred is spreading in africa. they have to be defeated. >> we good now to karen bass of california, ranking member of the africa sub committee. >> i want to thank the chair and rank member for holding this hearing today. the crisis at the westgate mall is troubling and represent as serious security concern to east africa, our partners, and by extension, our ken tri. while al-shabaab been

significantly handy caped by counterterrorism activities by the frick union mission in somalia and with support of our military, the event office last mock are a cold reminder we can't lose focus in preventing and eliminatings terrorists. and white wire here to address al-shabaab there are sim hill concerns in west africa that requires our attention. these groups are a destabilizing factor0s an constant innocent that is becoming more stable, peaceful and increasingly a target for economic investment. i also want to mention that on the news this morning, i saw that al-shabaab essentially has initiated another threat, saying that they intend to go back into kenya and i really hope that our witnesses have an opportunity to address this. thank you. >> thank you. we'll go now to judge ted poe of

texas for one minute. >> while the attack on the westgate mall in kenya was ongoing, the terrorist group responsible, al-shabaab, was sending out tweets, twitter knew about the al-shabaab account a year before the attacks but refused to take it down. unlike facebook, and youtube that go after these terrorist sites, twitter wants the fbi to tell them when to take down a particular site, and apparently the fbi remained silent for various reps. it's against u.s. law to sport terrorist cozy twister calamites its doesn't allow terrorists to use the twitter account. twitter says it has no way of knowing if an account is run by a terrorist group or not bit twitter has a rule you can't claim to have a false identity on twitter. so either way twist sheer be taken down terrorist accounts. either the terror group is operating the accounts or it's not a and somebody is misrepresenting its. at it time for twister to stop violating u.s. law and giving terrorists a free away to release anywhere propaganda and ahead to the world.

i look for answers today. thank you, mr. chairman. >> thank you, mr. poe. this morning we're joined by a distinguished panel to address this issue. we have dr. seth jones back, assistant associate director at rand corporation's international security and defense policy center. dr. jones specializes in counter-incentury general skins and counterterrorism with a focus on al qaeda. we also have mr. don bow really, 25 years veteran of the fbi, former special agent in charge of the joint terrorism task force in new york, he lead the investigation of al-shabaab's 2010 world cup bombing. mr. mohammed fa a is the

executivetive director of ka joog, which means stay away, working to count their negative influences of groups like al-shabaab in somali communities in the united states. mr. fa a has been on the front lines of his community's counter-radicalization efforts and was given the fbi director's community leadership award in 2012. richard downie is the deputy director of the africa program for the center for strategic and international studies. mr. downie analyzes emerging political, economic, social and security trends in africa, with a particular focus on sources of unstable on the subcontinent. without ox, the witnesses' full prepared statements will be made part of thors and maybe -- part of the record, and we'll ask all of our witnesses to summarize their testimony to five minutes

if you would, and dr. jones, we're going to begin with you. >> thank you very much, chairman wrist, ranking member engel and members of the committee. thanks for inviting me and news general to testify at this hearing. al-shabaab, how great a threat. as those of you who just spoke noted, the al-shabaab attack at westgate mall and its followup attacks -- it conducted attacks later in and around the kenya, somali border -- are a stark reminder that this somali-based group and al qaeda affiliate remains lethal. despite some losses, it's been push out of mogadishu, and the hub for the group, the group does present, in my view, a significant terrorism threat in the region, including to united states embassies and citizens in east africa, the horn, and

potentially other areas. at the moment, it is my judgment that al-shabaab does not appear to be plotting attacks against the u.s. homeland. certainly not to the degree that an organization liked a quite in yemen, but there are several reasons in my view why america should be concerned about al-shabaab and recent developments. first, as we saw with the west gate attack, al-shabaab does have a competent external operations capability. the westgate mall attack was well-planned, well-executed, involved impressive intelligence collection, surveillance, rereek con sans of the target. asking questions to individuals before killing them or letting them go these skills could be used to attack the united states and its interests in that

region. second, al-shabaab officials have expressed an interest in targeting u.s. and other foreign targets in east africa. they have also planned to kidnap americans and other foreigners in the region. they plotted attacks against malls, summer markets, elm -- supermarkets, embassies. the u.s. embassy was struck in 1998 by al qaeda in the same country. third, and perhaps most concerning, americans from cities like phoenix and minneapolis for the past several years have traveled to somalia to fight with al-shabaab. had a number of suicide bombers, other american cities, boston, seattle, washington, san diego, columbus, have seen individuals either recruited or left for somalia. now, the fbi and law enforcement in these cities have done an

effective job of wrapping up a number on these individuals. but the ability of the group to recruit in these areas, in particular reach out to individuals through social media, does pose a concern. based on an examination of counterterrorism efforts against al qaeda, more broadly, since its establishment in 1988, i would suggest the u.s. consider several steps to help weaken al-shabaab in this region, including more broadly in the united states. but in the region, the first is implementing what i would call light footprint strategy that focuses on covert intelligence, law enforcement, clandestine special operations forces. i covered al-shabaab somewhat when i was in u.s. special operations, and then diplomatic efforts to work with the somali government and its neighbors, the good case i think of working with the somali government and its neighbors such as kenya, and ethiopia, in their efforts to

counter-al-shabaab and its financial logistics and other networks in the region and somalia itself. this means, to be clear in my view, the united states should not consider -- should certainly not deploy conventional u.s. forces to somalia. i think it's a good case of working with the somali government and local governments in the region to take the lead in this effort, so u.s. role should be what i would call light footprint. ite be happy to spend more time talking about that. then second issue and one we have not done a particularly good job is to aggressively undermine al-shabaab and al qaeda's more broadly extremist ideology. for al-shabaab the struggle to overthrow the somali government and establish an extreme sharia is just as much as ideological and military struggle. the u.s. over the past two decades hat done things like disbanded the u.s. information agency, in my view we have a

very disjointed information campaign among multiple agencies. i think what we saw really one of the most effective efforts against the soviet union in the cold war, it was a substantially increased overt and covert effort to come bat the soviet unions ideology. i think we're weak here. to close briefly with a statement from al qaeda leader zawahri back in 2005. quote, i say to you we are in a battle in more than half of this battle is in the battle of the media and we are in a media battle in a race for the hearts and minds of our uma. in conclusion, members of the commit. >> would just like to highlight that al qaeda realizes this is an ideological battle. >> thank you. let's go now to mr. borelli. >> mr. chairman, distinguished members of this committee, thank you for the opportunity to speak before you today on such an

important topic. as mentioned i'm 25 year veteran of the fbi. my last position was assistant special agent in charge of the joint terrorism task force in new york. in that position i was responsible for fbi international terrorism matters, including those involving africa, and i led the team of more than 60 fbi agents to uganda in july 2010 to velocity the simultaneous suicide bombing attacks during the world cup soccer game which was conducted by al-shabaab, so i have first hand experience in dealing with the atrocities committed by this group. since leaving the fbi i have happened -- overseen our study into countering the narrative 0 of violent extremism. i i personally interviewed policymakers commune leaders, security officials, and young people in the crosshairs of

al-shabaab reciteses and -- recruiters and i'd like to folk focus on al-shabaabs recruitment efforts. al-shabaab's political agenda is the nationalist agenda, which aims to fight against foreign troupes and somalia and install sharia based government, and the jihad agenda, against the west and its allies. this is reflect threat al-shabaab's recruiting efforts the narrative of the nationalist agenda uses reports of violence in somalia along with compelling combination of propaganda that appealed to a sense of obligation to defend somalia. the global agenda is aligned with the broader al qaeda message, claiming the west is at war with islam. after peeking with many members of the somali american community in minnesota, we found that the

marritive that resonates loudest with somali youth is overwhelmingly political as opposed to religious and focuses on the nationalist agenda and is driven by a deep nationalist concern for show malia. however just because a young person might be enticed to joan -- join al-shabaab, and while somali here's may travel to somalia, to defend somalia they can be converted into following the global agenda, the al qaeda agenda, and return to the u.s. to launch attacks here. we have seen this pattern with other communities. the thwarted attack against the new york subway system 2009 illustrates this effect. it the man was cooperated by al qaeda and convinced he could do more by taking the fight back to the u.s.

so what can we do to mitigate this threat and counter al-shabaab's recruiting tactics here in the u.s. and abroad? we need to continue to put 'r-under pressure on ago al-shabaab through military and economic resources. we need to expand our efforts in promoting education and critical thinking among would-be groups, as we have seen in minnesota, many who join al-shabaab to help their somali homeland need to understand that al-shabaab is not helping their homeland. rather, it's commit committing atrocities against people, potentially vulnerable recruits need to see how they're being manipulated by al-shabaab. they need to understand that al-shabaab will turn their attention to help turn somalia into an organization at that time experts violence and kills innocent people. how do we do this? we need to understand that extremists use local grievances as initial motivators to

recruits so the counter-narrative must take place at the local level. and we need to be vary strategic in the medium, the message, and the messenger we use. our focus should be on helping credible voiceness the community count their message of violent jihad offered by al-shabaab, al qaeda and the like. and the internet needs to be an integral part of the strategy. al-shabaab was bragging on twister about the attack against -- on the westgate mall. we need to be just as a effective as using the internet if not more so. lastly we must not make the same mistake with al-shabaab we did with al qaeda and that is viewing it as regional threat. in the 18990s many smart people ignored al qaeda because it was seen as a group only focuses on the middle east and central asia. we have seen how a terrorist organization gone unchecked can morph into a global threat.

we must not let that happen with al-shabaab. i look forward to expand on these points and others during the question and answer period. ... news organization in the united states. it was formed in 2007 by a dozen

of students from high school level to college level students. who had few things in common such as education, art, positive role model in the community, and proud citizen of a country with limitless opportunities for those who are willing to work hard. the term cajole means stay away or stay out. and the message behind that is get you away from any negative influences that hinders the success or reaching the best professional -- we are worked the same thick in this morning. how is this that american youth can scum to radical. sure any of us today sitting here would not dream of strapping explosives on let alone even fight alongside extremists for whatever really glorified costs. but why? because we have been all educate, el educated to

understand that our human special worth far more than explosive and that our human purpose transcends the murders agenda over the extremists. the number one issue of our community is the improvement of our youth. as americans we must constantly assure ourselves that these attempts made by al-shabaab and their affiliate entities are act of desperation. religious tolerance have already denounced the claim for legislated mate sincerity in the light of islam. that the particular time, the -- lifting to reveal the true agenda as political intent of the extremist group. we shall no longer be the victim of the terror. we shall no longer let their actions affect our children and most certainly we shall not generallyize by the actions of individual fews who have painted

the name of this the somali people across this great nation. al-shabaab has taken every possible measure in full capacity to globe their ideology with an appealing message to our youth. they have targeted the disfranchised marginalized and socially estranged youth with the message to restitution infused with religion, rage useness. the young men left victims to deception are no longer with us today. we will be the same fate of many more youth unless we act swiftly. why is it we spent millions of dollars on counterterrorism and still american citizens are disappearing and fighting alongside with alsha al-shabaab inspect conclusion. i would like to thank you for the time to address this concern. i would like to finish by saying it's an uphill battle. we must call on the corp. of all agencies, communities, and organizations to share the

interest. who share a vested interest in the safety of our youth and wish to seize the effort of extremist entity. we must empower more local partners to bed a quiltly -- to deter growth being -- lack the vital resources. i'll repeat again. to safe guard our children and most importantly safe guard freedom here in the united states of america. i urge this committee and our federal government -- my government to stand with us to find al-shabaab and take the eliminate this cancerous ideology and take this fight to somalia. >> thank you. thank you. we'll go now mr. down any.

al-shabaab is a fragmented group representing different interest and objectives. it began in the armed wing of a broader islamist movement which briefly govern part of somalia before toppled by invading troops of ethiopia in 2006. it gained popularity by presenting itself as a nationalist movement by protecting somalis from foreign aggression. many tagged alone in the hope of a meal or cohearsed joint. but always been a faction that

harbored grand -- is now has control and strengthen the tie with al qaeda. it reflects the groups. the leader for the innovation and occupation of southern somalia launched two years ago chronic instability from the two country shared border. you began is the largest contributor to the of a cab union peace keeping force in smol yap. the targeting of the west gate packed with families around the world shows it to twoish make broader statement. not only to the country and the region but the western allies. we should be weary -- broader conclusions by the risk pose bid the u.s. homeland. the threat level is not

substantially unnecessarily changed by events in nairobi. an alarming aspect of west gate al-shabaab has from the perspective scored big hit with relative ease. it realized that all it needs is a target, good planning, low tech rep -- weapon i are. is therefore likely to look the target beyond somalia's border and seek opportunity team up with like-minded group in the broader region. there are suggestions, for example, supported in the past

physically and terribly. that support tended to flow one way toward somalia. but vigilance is required. building trust with the somali comiewrnty in the united would be a critical part of the prevention strategy. however, the more immediate threat not u.s. homeland but the interest of the united states in east africa, which are substantial. i have brief substitutions for the united states to consider. they should intensify efforts to prevent and respond terrorist attacks. improving intelligence capacity is critical. so too is the need to improve communication and coordination among the security agencies. instilling a security consciousnd among the public is another key way to bridge the imedges gap. it it a challenge to the high

level of distrust in the police. it can cannot be relied upon the information from the public. the u.s. should seek to build momentum behind efforts to reform the police turning them to an organization that people respect rather than fear. as ken began authorities seek to neutralize the threat the will be critical. and i should urge the ken began to authority to reemp tout community and avoid heavy-handed actions that might alien ate them such as the risk threaten to expel refugee. the key e to dealing with it will be in smol yap. therefore removing the threat of al-shabaab means isolating and pursuing the most extreme. as for the majority members joint for reason other other than the pursuit of international --

rehabilitate through a combination of threat and endeucement. they may even be persuaded to -- for broadly policy responses -- insecurity economic hardship, and govern man which allowed extremism to take hold. the united states is an important thunder of the somali federal government. improve security, and delivery of public services. i thank you for your attention and welcome your questions. >> we thank you. let me ask a question first. that has to go to the question of young somali americans that al-shabaab attempts to recruit. are there particular types of young men that for which they have a greater instance of success when they try to

recruit? what is the target? >> al-shabaab is targeting the disfranchised youth. that's their tactic. and that's the game that we need to we're playing here. we need to be able -- the youth in the community, you know, there's a lot of underlying issues radicalization doesn't happen overnight. t a process. and so whey need do is really try to engage the disfranchised youth that are missing whether it is jobs, whether it's lack of mentorship, those are the youth that al-shabaab is targeting. that is the core issue here. that's what we need to target. >> i just i don't know if you read the book yet. it's very interesting speft on this issue. let me ask you about how you would assess the u.s.

government's antiradicallization efforts and i'll probably ask the same question. >> my aseas in regards to what our government is doing in term of al we're very good at, you know, the external in term of military going after, you know, -- to do more engagement, more work what shows -- what happens over a week ago shows me and shows us in the community that we need do more work. so what i would suggest that the federal government must invest local and empower local entity to do more work within the community and across the nation. >> thank you.

your thoughts on that? >> thank you, mr. chairman. number one, i do agree with him in that the federal government needs to invest at the local level. we have seen that these recruitment efforts are hatched a the the local level. they start with local greercheses. the best way to stop that message to counter that message is by credible voices in the community. i'm not sure that the federal government has really a good strategic plan yet for doing that. in term of cve. we have seen that many different agencies within the federal government have a role in the are cve in encountering this violent message. in some cases it seem to be as by disjointed and disconnected. we have seen a lot of this responsibility has been put on the back of law enforcement, fbi, and homeland security. and sometimes that may not be the best messager to working on

cve on one hand you're trying to bridge the gap and build trust and develop a dialogue on monday. then on thursday, you know, you're counter part in the same agency are make arrests and putting sting operations together. you have sometimes opposing forces that they have different agenda, the same agency. so i think this is something we should be looking at closely. >> thank you. dr. jones, you passed hearings -- in past hearings we have learned various networks some affiliated with al-shabaab involved with smuggling somalis to the united states. and i was going ask you if this is still happening, and i was going ask you for what purpose would al-shabaab smuggle people to the united states? >> mr. chairman, my understanding is the pace of

smug m -- smuggling and individuals leafing the united has likely decreased somewhat for the past probably two years. but thing is an interest in recruitment and fundraising in the united states within the somali community. the somali-american community. the primary reason for bringing people in to recruit to go back to somalia and fundraise and ensure there is money that is going in to the pockets of some cash draft members of al-shabaab. >> in the past, how were people brought to the u.s.? through access? >> the -- one of the primary routes were through the u.s.-mexican border through the southern group. if somebody has a legitimate pass port and name didn't come in. you can fly in. other than that, a primary route

is through multiple board crossings along the u.s.-mexican border. >> thank you. we go to mr. i even gal from new york. >> thank you, mr. chairman. i want to refer back to a question i mentioned in my opening statement. anyone like that an this is welcome to. could you discuss the relationships between the ken began security forces and the somali population and provide -- what kind of engagement could be effective in combating al-shabaab? mr.downy? >> the relationship between the ken begans and the security forces and somalis have not been good inside somalia and kenya as well. inside somalia and ken began forces invaded some part of the country two years ago there were

growing us is pugs that ken began was not purely interested in -- pursuing political and some extent business interest in southern somalia. that's clearly creating resentment within the somalia. meanwhile inside kenya, the tendency when we have a tax like this for the ken began security forces to lash out somewhat indiscriminately intoxing members of the somali-ken began commune any nairobi and as we've heard a large refugee community. these are incredibly counter productive measures. these are the two communities that ken beganses have to rely closely on getting the information about the sort of attacks. many observers have suggested that the attack at west gate was

desperate attempt to provoke reaction against the somali community in kenya. do you agree and what sort of policies responses are to be avoided in order to just avoid this scenario. >> ranking member, i think there are probably multiple mote vases for conducting the attack. i suspect as we have seen with other organizations not just al-shabaab overreaction would be welcomed by al-shabaab. it could encourage recruitment. i would suspect there are other reasons a desire to exact revenge on ken began forces which have conducted lethal operations against al-shabaab training camps within somalia. and also to get attention. they got 24/7 attention from

simultaneous. international media sites. i think there were multiple reasons for doing that. i think from an overreaction stand point. i think one thing we have to be careful about we don't encourage the ken begans to overreact -- conduct oververt attacks within somalia that are likely to walk to the same issues that several of our witnesses have talked about then. walk us to a nationalist problem which encourages recruitment within somalia. >> if i may add one thing. is that i think this is the west gate attack was very shrewd for recruiting. as i mentioned before, you have various factions within al-shabaab. you have more of a nationalist action. you also have kind of the global jihad mentality. the attack seemed to appeal to both. you were able to launch an attack against kenya and against

your -- you know, the country that has boot on the ground that appeal on the nationalist movement. but also by targeting westerners and all of the media. the global media that was given to this attack and has a broader appeal to the al qaeda-like faculty. i think in that sense, it was very shrewd and could be a good recruiting tool. >> i might just add one thing as women. clearly it was an attempt to get attention with the other organization with al qaeda. terrorist been -- we seen in the past at least bin laden was -- dubious about al-shabaab's seriousness as a organization. they were discriminate in their attack and killing too many muslims. there's been a conscious effort at least in the way al-shabaab prevented the attack and try to single out christians and i think we shouldn't be taken in

to this by this pr from al-shabaab. the single -- in the beginning when a grenade was locked to a group of people. mothers and children's watch a cooking demonstration this was a completely indiscriminate attack. since you mention al qaeda let's get one quick question in. what is the relationship in nature of the relationship between al qaeda and al-shabaab. al-shabaab, we know in 2012 and now it's formed a merge with al qaeda. what does that mean? want to take directions from al qaeda? do they get training or operational or financial support? >> frankly, it's hard to know. certainly the two groups have been moving closer together particularly since it became the leader of al-shabaab. he's better than trying to appeal to al qaeda. whether the take involves the sanction support coshed nation

with al qaeda funding or even receive a blending from al qaeda. i certainly am not aware of that. thank you, mr. chairman. we now go to -- chairman of the middle east subcommittee. >> thank you very much, mr. chairman. well, this horrible al-shabaab attack coupled with the closure of over 20 u.s. em -- embassy and consulate and the last month targeted south suicide bombings by christians in pakistan by an al qaeda-linked group proves terrorist groups are extremely active still and the influences are far reaching. the threat to the u.s. national security interest from extremist groups such as al-shabaab remain very real. the united states is not let

down our guard. as you pointed out, they are attempting to strengthen their ties to communities here in the united states. that must be of great concern to all of us because it will spread the propaganda to recruit susceptible use to join their ranks. as you had pointed out in your testimony, these groups recruited by al-shabaab are more driven by nationalistic and political ideologies rather than religious one z if we know that al-shabaab and al qaeda have been successful in recruiting these susceptible use, what more can we do target those communities in an effort to counter this influence. also, if we're going invite terrorism and the activities we've got develop a comprehensive strategy that can disrupt their networks, prevent

their operations from spreading. one entity that can be of assistance to us is the u.s. africa command. what we have seen that the combat and command -- fracture personnel and resources to effectively fight terrorism successfully. and another keys a foact dismabt ling al-shabaab's activities is through the drug trade. we have known that the threat of are in koa terrorism continues to grow. it's used by many terrorist organizations to finance their activities and expand their networks. the last year the senior dea official testified as a result of drug trafficking, quote millions of dollars a year are being sent to somalia and other countries in the horn of africa. some of which end up in the commerce of terrorist organizations such as al-shabaab, end quote. in conjunction with the regional ally we need fight the extremism

head on. we have to reassess our priorities and continue to use the initiative that are doing a fairly good work. but could be dubbed the oas africa counterterrorism initiative. the transshare are a counterterrorism partnership. they could help our allies and africa more to protect national security interests and disdismantle terrorist cells who we see that these programs lack prioritization. they lack clear objectives. realistic benchmarks of what they can do to look at our progress in fighting these extremists. and in your assessment, would you say the united has been given the threat of al qaeda the intension and focus that we should, we need reevaluate our assessment of these threats and our policies and programs in place to fight them. so u.s. communities and

reassessing the threat and who is going take any of these? >> thank you, sir. >> thank you, congressman. i think to your point about stopping the threat and trying to target the threat against these young people in the communities. i think we do need to continue to evaluate our programs locally and federally. as as he pointed out, some good work is being doned in the community. we need to continue to support that. as an example, when i was in minnesota visiting the local community and speaking with many of the young somali people there, they had actually put together a youtube video showing the atrocities submitted by al-shabaab and showing how al-shabaab was manipulating people with the distorted u

message. these are the type of praments that we can put forth to support using the internet and using the same social media recruiting these people. >> thank you. anyone else wish to comment. >> yep. if i may add my colleague here said we need to reassess moving forward in the regards to the threat of al-shabaab and the recent attacks shows us that we al-shabaab is not weak as we think. we need it do more and more work within the community and -- 99.99% of our community are law-abiding citizens. we're talking both few individual but those few individuals are the ones that we need to target that we need to go after the other ones we need engage in. >> thank you. thank you, sir. >> i've just run out of time.

>> ranking member of the western hemisphere subcommittee. >> thank you, mr. chairman for holding this meeting. as i listen to you, what is the main source of revenue of al-shabaab? where do they get the money? is it drugs or? >> my understanding is they have redundant sources of funding from illegal criminal activity including involve in the charcoal networking to kidnapping to other multiple sources including taxation and southern somalia. redundant sources as well as funding from a population of somalis across the globe including from the u.s. i assume we keep track people contributed to this somehow. >> yes, and some of it have been arrested for that.

>> we have been arrested. >> yes, we have been arrested. the thing is, it's very difficult to track the money once it gets to somalia. there are many people at the somali desk that send money to their families because they desperately need it. the problem is that once the money gets there it's hard to track if it's actually going feed their relatives or being diverted to go al-shabaab inspect is the challenge for law enforcement because quite frankly, it just, you know, some of the people need the money. it's sent with good intent but diverted. >> it's a very live issue right now. because of the adulty of monitoring the money tran fors of much of the money flows. a lot of banks are getting leery of the business with the firm. the problem is, it's certainly true it's hard to monitor the flow. by cracking down you stop vital sources of income for somalis. and just at the moment where the

countries are starting to rebuild the economy to some extent cut off the flow could have a disastrous effect in the development process expect for somalia. >> how is the muscle community in somalia and kenya view al-shabaab? i can -- 99% 99 percent of somali across the world condemn the work of al-shabaab. this is something that al-shabaab would not convey my image. they do not convey the image of the somali communities across the united states nor across the globe. >> so i guess one way of tracking the money would be the community that is send the money making sure that the money goes through is intended to. >> definitely. and that is where we really have to take --

really empowers the federal government and the regional government to really put laws that, you know, a system that can oversee where money is floating. >> the agencies in the country work with you on some of the issues? >> definitely. yep everybody in the community is unborn in term of where al-shabaab stands in the community. it doesn't stand anywhere. it is condemned across the community. >> thank you, mr. chairman. >> thank you. we're going go now to mr. smith. >> to our distinguished witnesses. you know this very well in 1998 assistant secretary carpenter -- assistant secretary for diplomatic security sat where you sat and said the u.s. embassies were quote soft targets and of course we now had a decade long several years long effort to hardin the targets no matter what we do anybody in the

world there never be a hardining of supermarket and restaurant in the like which underscore the need to hideous terrorist organizations because they pick through grill action where they want to destroy people and destroy physical infrastructure. if you could tell us and, you know, dr. jones you said that unfortunately u.s. efforts again al-shabaab and al qaeda more broadly have been, quote, discounterred. -- disjointed. you said current efforts by international bank is stop doing business with money transfer companies through which some of the funding is believed to flow are understandable or misguided. and i'm wondering when al-shabaab was placed as a terrorist organization in march of 2008. obviously one of the main thing of the law is go after the financial transaction to keep them afloat and aid and abet

their killing. how effective has the designation -- how would you assess the weakness and strength of the u.s. response. you go further elaboration. while you're asking, you mentioned that he's now in control of the movement. if you could elaborate on what it portend in further international idessing the efforts. and family if i could, many of us have met with sheik mohammad. how do you assess his work and capability. he's trying with other support to build military capability with the strong emphasis on human right. if you can speak to that as well. >> thank you. >> tackle the last couple of questions and the importance of

the merchant as the leader. i think it is significant he's, you know, very, very thin end of the scale in term of extremism. has been since his rise to the top of the organization with al qaeda he's very much motivated by the international jihadist agenda. and he's been awfully ruthless within al-shabaab as women. it's a fragmented organization. just in the last few months he served through assassinations and other dispeern of potential rivel. some disagreed with his method have consolidated his power and strengthen those tie of al qaeda. that has has significance in term of the group choice of target and willingness to look at targets outside somalia. in term of the new president

somali president mohammad has been in office for a year now. given the challenges that somalia faces more than twenty years without a functioning government. he's doing okay. it's progress. in his favor he's a serious person. he's not tainted by the politics of the past. he's come from outside of politics. he's trying his best. he has tech karattic government around him. the challenges are immense. one is the one you highlighted. that's security. the effort to strengthen the security sources of somalia. the u.s. government doing all it can do? >> i think one of the weak spot you highlight the financing specie. there are no very easy solutions to that. by clamping down -- as i said you're holding back the economic progress in somalia

as well. it's somewhat a blunt force. yeah. i was going to say more broadly on the fto designation. when i look around the globe. there are some al qaeda affiliates in syria which have clearly strengthened their control of territory. al-shabaab has decreased. so i think the effort of the u.s. and some of the neighbor and the somali government have done to al-shabaab have decreased the control of the territory and put on the run. it's not dead and i think the lesson we have learned over the past couple of weeks take our foot off the gas a little bit. the group has a cape tobility strike. i would -- i would hope we come back to the ideological issue here. i would say that's the biggest weakness we have right now.

everything >> you goes by rerl. if they say medicare is where you need to be. that's where they are going. they'll be moving and so that's where a lot of the -- that's why you see a large concentration in the somali in libya in minnesota. >> also aware of the fact that i think quite a sizable could help

me. is there any particular region economics is -- minnesota is giving our country a good example for immigrants to come to because there seem to be offering a lot better programs in other states. is that the reason why so many of our smol began americans live in minnesota? >> based on my discussion with people in that community, that is in fact the case. t very easy for people from other countries to go. they can get some program nas help them get on their feet and get established and then just becomes a very hospitable place for people from other countries to make it in the united states. i want to just get your

response. when we had the oklahoma city bombing, there was an immediate profiling by federal agencies as well as state enforcement officers in oklahoma. anybody with an arabic surname was questioned because the presumption being instead of stereo typing the profiling to say that the terrorist must have been done by a muslim terrorist well, it turned out to be an american. and i'm just curious have there been any incidents that somali american community have been profiled since the incident took place in nairobi where syria's question have arisen about the loyalty of the smol began-american community? event of this terrorist act? i'm not aware of in.

i don't live in minneapolis. i would defer to my colleagues. thank you for the question. since the incident happened in kenya, there's been a lot of media throughout the community. really cross-suit nicing the image of the somalis and what we need to reintegrate over and over the majority of the commune try law-abiding citizen. we talk about the have physical few individuals. there's about 5,000 members that make up the al-shabaab organization. dr. jones? >> that number sounds a little

high now for full-time members. i think you are droarkt point out the numbers of al-shabaab are larger than the numbers of al qaeda in afghanistan. i believe dr. joandz is right. it i can make a point on your other statement. i think we have learned lessons over the course of the years within law enforcement that don't jump to conclusions too quickly. we need to not look at the american's last name where they're from. we need to look at the action and keep an open mind. the opportunity to join the terrorist group and commit ability of violence that transcends a person's place of birth or religion. i appreciate that. thank you very much.

would indicate that. that's never been proven. the radicals whether their anglo or muslim seem to have the same enemy. that's decent people throughout the world. especially united states of america. trying to ally ourself with the good and decent people of the world. let me just note we were talking about thousand of people and terrorist organization thousand of people. this is not an oarpg that can be financed through contributions

from individuals who sympathize. that's the cost of -- what is the cost of a bullet in somalia? i would say it's around 10 to 25 cent a bullet. not mention the cost of an rpg or explosive or the cost of vehicles or the cost of training or the cost of recruiting. these are enormous these are things that cannot be done. one the problem we have here, madam chairman, in the united states is our law enforcement is trying to find out somebody who still needed $100 some cab driver somewhere to this terrorist networking somewhere in the world. we need to find out who is

providing the hundreds of millions of dollars to the terrorist operations throughout the world. who is spending the money to recruit these young people? who is providing that money? for some reason, i have an inkling they are people in the middle east who make a lot of money from oil. i don't know what countries they are. but i just have that ilking. i would suggest that we can be able to prove that if we wanted to. we have been keeping that information from the united states as to who is pumping in millions, tens of millions of dollars to the terrorist organizations. am i off base when i think that? >> mr. jones, gentlemen, well. >> i think there's a lot of grey where al-shabaab gets all the funding. i would stay gets large amount of funding from other locations in addition to the middle east kidnapping actually has can be

quite profitable as can illegal trafficking in a range of goods including the charcoal smuggling. in some cases in the hundreds of thousand and when you add it to kidnapping millions of dollars. >> they have to put it in the bank? someone has to have those resources you're talking about. in to a central location and distribute it. there's banks involved in this in some way; is that correct? >> that is likely, again. i'm not a treasury expert. i would refer to those who bank more than i have. what i've suggested today we are been law enforcement and i like talk about how we have to get down to some of the actual psychology and combat the recruitment of people in these communities.

whether big bank or somebody in saudi arabia who has a billion of dollars in place and pumping in $10 to $20 a million a year. we are ignoring them. i would hope that our government after this horrible mas consider in kenya decide to focus on some of the big guys who are financing all of this may him around the world. >> thank you, mr. chairman. i would be happy to yield. if i could. has the indict by the international criminal court in any way frustrated the u.s. ability to work side by side with the ken beganses? as you know he stated he will

not be intimidated. he has a large number of peace keepers deployed in somalia. >> thank you, mr. smith. that's a wonderful question. we hope they get the opportunity answer it at some point. now we will turn to for her question and an. >> thank you. thank you for sharing your insight with us here today. a couple of questions first with regard to the work that they are doing. it you can give a couple of example on the outreach you're actually doing in the community as well as your suggestion both with the nongovernmental or non-profit organization within the somali community can do as well as law enforcement a proactive way to prevent these recruiting efforts secondly to that. if you can speak a little bit how the somali american community views these recruiting efforts, and what actions within the community as well as

externally they're taking to denounce these efforts. >> thank you for the question. in term of -- or mission is to empower the youth to really stay away from all negativity. whether it's al-shabaab or gangs. we there -- we have to treat al-shabaab like a gang. that's what they are. a lot of education go hand and hand in everything we do in term of art. ultimately education is the key. tutoring and mentoring in support of what we do. and recently we have created really the first ever somali boy quotes. that's something we haven't seen recently. we are trying integrate the greater society of the benefit. there's a lot of work in the community being done before us.

what we need to do is invest in those programs. than is what is missing here. aside what we're doing externally in the united. we need to focus what is owningen in the community and empower local entitieses. it's an all-volunteer peace organization. how can we fight al-shabaab? they have millions of dollars and you have enties in the community who are, you know, trying to who are running on e pretty much in the federal government is mia. missing in action. in term of the somali community, they feel the same way across the board when it comes to al-shabaab. we condem the work of al-shabaab and those individuals -- individuals don't convey the message for the somali community. >> thank you. and to the rest of the panel, i don't know if you're able to

estimate what percentage of the financing for al-shabaab is cometting from the u.s. or these remit you are talking about. and secondly, if those recruits that al-shabaab is getting from the u.s. is it your understanding that nairobi intent in order engage fighting abroad or here? >> based on the conversation i've had with people in minnesota their intention is to fight abroad. as i mentioned especially now with change in consolidation of power and this jihad message, the fear is they can be turned to come back and tyke -- take the fight in the u.s. with regard to your question about financing, i don't have a number of percentage. maybe one of my colleagues has in term of total.

the subject is -- given the way that money is tran forked and the lack of transparency within that system. one thick to follow up on dr. jones' remarking earlier a key source of financing for al-shabaab until recently has been from somali itself from taxation of population in al-shabaab controlled area from controlling previously the largest port in the country. there's a silver lining for many of us is al-shabaab is being pushed back from the territory controls its funding is being squeezed as well. thank you i yield back. thank you. now we are honored to recognize the chairman of the homeland security committee. thank you. i want to echo the gentleman from california's remarks about the funding issue. i got briefed yesterday on the

threat. when you look at the organization and you look at the funding extremes, a majority tie back to the peninsula in term of funding. this is sort of the inconvenient truth that no one talk about and want to the deal with either. there an article today $100,000 sent from the gulf to fund 25 assassin to the elite of the somali terrorist organization. is something we are going have to deal with at some point in time. it's something the saudis being our ally presents a problem.

>> i think the first question is to expertise with the fbi what degree of confidence do we have on the identity of these americans? we get them on the no fly list? what is a threat to the homeland i think in regard to your first question in to be positively identify the individuals. get them on the proper watch list and so forth. a lot of progress has been made. i've been outside the fbi for three years. i can't speak what happened from the gap when i retired until today.

i think when i left the fbi, we had a fairly high degree of cd. nothing is 100%. again this is where we need to engage the commune toy help us help the fbi identify the people to know when they leave the community. the type of situation where somebody leaves with the intent to fight abroad and coopted to take the fight back home and certainly these individuals. if they have been off the grid for awhile. if they haven't a passport they can get back in to society and reintergrate and have a serious problem.

between the mesh from alabama and the current leader. the risk, disindz is between whether they focus regionally or whether they want to exdemand as you talk about external operations beyond the region to western targets and possibly the united. he was assassinated by his -- a week before the shopping mall attack. the other thing that worries me is a symbol -- it's a western target. you put it together and it's confusing and disturbing. what do you make with the risk within al-shabaab and the assassination? and were these americans under the control in my way

responsible and complies it with the attack on a western symbol of the west gate shopping mall? >> i can't speak to the degree of involvement by americans. my understanding it's being looked at by our own agencies to some disagree. what i would say is i would strongly support your point of notable risk within the organization. b., there has been encouragement apparently and three, i would also note that al-shabaab and al qaeda the u.s. does can influence it. not just in 2010 was involved in the suv attempted attack in time square nap organization the pakistan taliban was assessed earlier that year not to be a threat to the homeland. we assassinated the year before the head of that organization with a drone strike. it if we were to take those

kinds of action in somalia, my guess they would be right back after us. our actions also can impact where it goes forward. >> i see my time is expired. >> thank you, mr. chairman. >> thank you. >> thank you very much. i want to focus on the united states. obviously i read on page 4 that al-shabaab demonstrated remarkingability to recruit somali americans since 2007. the epicenter is in minnesota. i represent the area of san diego. we have a fairly large somali population. there was during the ethnic cleansing in kosovo, my wife and i decided we wanted to adopt a muslim family and went through the or rows of the ethic cleansing. they lived with us for two years. i got to meet many in the somali community. i have not heard of any

recruitment in san diego for al-shabaab or any other terrorist organization. could you comment on that? >> i would say that the fear is the internet doesn't know the boundary between san diego and minnesota. we have seen that al-shabaab is effective in using the internet. many of the young people get the message from the internet. so while there may 0 not be boots on the ground. that type of recruiting. i think the fear is that you absolutely have recruiting in san diego via the internet. particularly the miewmplet of individuals from the united states south across the border.

some have returned. i'm not aware of many that have returned that have been prepared to conduct attacks. the vast majority do. my only point earlier was a human trafficking networking that has moved somali out and in to the united via the u.s.-mexican border. it represents a very -- the reason i say that is the border seems to become the excuse the terrorist are coming across the border. and i have a good relationship with the border patrol there. in fact we met here last week. they have not apprehended many terrorists coming across the san diego border. if seems that most of the terrorists, i do agree there are a number of them here. we caught people.

we find people. seem to have come here legally