the fbi and most particularly the mem and women of the fbiing in pursuit of its mission. your investments in our worse forex investments in our technology, in our infrastructure have made a different to the fbi every day and the transformation of the fbi that has an undertaking over the last ten years would not have opinion possible without the support of this committee. my thanks and i look forward to answering what questions you have. >> thank you very much, director mueller. and to my colleagues who've arrived, we're going to have one round of questions here, recognizing people in the order of arrival. when we've completed that, we will recess and then have moved to a classified hearing with the director, particularly on the sensitive matters, and we will do that in our classified center and we'll recess to room 1378. direct i, i wanted to move

right into my questions. first of all in your testimony you showed the bredth of the work of the fbi from international terrorism to cyber threats to really works with our cops on the beat. let me get right to, i think -- we need to have for the record the major categories for the fbi, which is -- how much of your $8 billion, which is actually a modest request, held very tightly at pretty much last year's funding. how much goes into national security. then how much goes into traditional crime fighting. and then also where do they cross like in the area of cyber

because i think many people don't realize that the fbi has such a substantial role in counterterrorism and con turin tell jens. the fbi's transformed since 9/11. could you elaborate of the $8 billion what goes into what category goir goers. 60 is scored to national -- the national drp wo what i would call the programs. counterterrorism, counter intelligence, weapons of mass destruction. and then additional pieces of other programs and that's about 60% of our budget, that $5 billion. but also scored peeszs of other programs. for instance, the cyber program is split between criminal and national security where 60% of the cyber program, that which has scored to national security relates to intrusions, whereas

the other 40% relates to programs such as innocent images which addresses child pornography on the internet and ipr, the intellectual property crimes that we also address. so 40% of it is cyber crime. the other 60% of it is perceived and scored against the national security budget and that relates to computer intrusions. >> well, let's then go to threat of sequester. i'm concerned that the congress doesn't have the sense urgency about cyber, but i'm concerned that they don't have a sense urgency about the threat of sequester. gimp this $8.2 billion, when one looks at what all we spend on other security issues, this is

really modest when you think of the scope, depth, technical expertise, perj integrity require of the agents and all who work there. what would happen to the fbi if sequestered were triggered? >> we tried to estimate what would happen in the event of sequestration, and the preliminary figures show we would face a cut of 650 to $800 million. that translates into a -- this would be of the $8 million appropriation for 2012 that would translate into a 25 work-day furlough across the bureau. and a reduction by 300 work years for special agents, intelligence, analysts, and professional staff. given what i've described in terms of the threats, we would have to do some very substantial prioritization. and we would have to -- and it

would have a huge impact on our investigations, have an impact on our intelligence and it would have a very large impact on the morale of the work-force. we would have to rerotate the furloughs to lessen the impact. we would have to repore tiez. i it would set us back to where we were many years ago and the impact of that sequestration would be felt for many years in the future. >> i have a whole set of questions related to cyber, which i will defer to our classified meeting. but in terms of accountability, i want to ask you about sentinel, keeping it within a budgetary framework. as you know, we've been at the sentinel program, which was initiate add long time ago to

provide the fbi with essentially virtual case files to make them more effective, more productive in the old lingo of post-9/11, connect the dots. could you tell us are we getting sentinel connected while we're trying to figure out how to connect the dots? >> well, as you are aware, congress -- the contract was entered into a number of years ago. we had phase one that was produced. phase 2 in our -- from our prospective was not adequate, so we restructured the contrast to bring inhouse much of the software development. we had anticipated that we hopefully would be through the test last fall and start sentinel. we had a test of the sot ware as well as the infrastructure to support the software but it worked well and it needed updating. so since the fall, we have put

in new servers and build up the infrastructure to be able to handle the software package that is in the last stages of being completed. there are three factors that go into sentinel. one is i want a product that people can use that will be embraced in the field that actually works and is helpful. secondly is the budget and staying under budget. and third was doing it in a timely fashion. i have had to sacrifice the tombly fashion in order to make certain that the product we put in the field would be in place by work-force and secondly keep it under budget. currently we have built up the infrastructure as a result of the consequence of the test we put in in the fall. we are testing that, and the tests are positive. my expectation is that certainly by the end of this fiscal year, certainly be by the fall we will have completed this, and the sentinel will be in the field and it will be under or just at budget.

>> even with, keep us posted on this. i now want to turn to senator hutchison inson. >> madam chairman, i'm going to let senator graham have my time and i'll come back at the end because i'm going to stay anyway. i do have questions, but i'm going to defer it to senator graham. >> senator graham? >> thank you. this has been a very informative hearing. is it fair to say that we did not have the legal infrastructure in place to deal with the cyber threats that we face that congress needs to give you better legislative support? >> yes. >> is it fair to say that of all the things that we should be concerned about, cyber attacks from foreign governments and terrorists is a growing threat by the day? >> yes. >> okay. would you consider a cyber attack generated from the people's liberation army of china against our national

security infrastructure? should that be can considered a hostile act. >> you're in an area somewhat beyond my per view but in the way you design, absolutely it would be a hostile act. i don't know the contagions. >> see, i don't know either but i think we need to come to grips with that because you've got a law enforcement model against cyber attacks. >> yes. >> where people engage in economic espionage. they may try to shut down, you know, the power plant or a grid. when is it a crime and when is it a national security hostile act done to the law of war? i think that's what we need to costa rica among ourselves. and i would argue -- let's say that these websites generated by al qaeda, if an al qaeda backed organization tried to consider a cyber attack, would you consider that an attack on the united states? >> yes. >> so if we captured somebody

involved in a cyber attack that was affiliated with al qaeda, they would be treated difrply than a common krlt, is that correct? >> it depends on the circumstances. >> you could use one or two models. >> you could. and if i may, what you point to is one of the difficulties in the cyber arena, because at the point of time of the intrusion, you don't know whether it's going be a country, a terrorist, or the 18-year-old kid down the block. >> right. and the best way to find that out, i believe, is to hold someone that you suspect of being involved in terrorism and gather the information in an orderly fashion. and i do believe the law enforcement model has deficiencies in that regard. the people at guantanamo bay, there are some people being held there for multiple years, is that correct? >> yes. >> has the fbi interviewed the populati population of guantanamo bay. >> yes. >> don't you believe the way to question them is to not torture

them but use traditional military techniques? >> that's somewhat of a loaded question. >> if you say -- >> i would say we follow our rules -- >> you don't torture people in the fbi, do you? >> pardon? >> you don't torture people. >> no, sir. >> and you get good inform snoogs yes. >> i totally agree. what i would suggest to the committee is snochlt mikulski's request for a see question trags, if this is not a wakeup call, what would be. i think he's doing a marvelous job. if we do, we're going to devastate one of the front line agencies in the war on terror. ten years ago, what was the fbi's budget when it came to national security issues? what percentage of your budget? before 9/11. >> i would say one-fifth of the budget back in 2001 was national security and i would say the principal percentage of that was

addressed to espionage in the counterintelligence division. >> so before 9/11 what apartm t percentage of your budget? >> i would say no more than a quarter. a fifth or a quarter. >> so if your budget has gone up from a fifth to a quarter, it's now 60% dealing with national security issue, something's got to give. has your budget gone up? >> how much has your budget gone up in the last three years? >> last three years i'd say maybe $2 billion. i'd have to check. >> what percentage of increase is that? >> i could tell you since 2001, our budget in 2001, which i'm much more familiar with, it's 3.1, now $8.1 billion. so it's almost tripled since that period of time. >> so these resources have been needed? >> yes. >> do you see -- do you have enough money to do all the jobs that you have told us that you do? >> in the -- >> and if you don't, tell us. >> yeah. i mean it is a prioritization.

we have to prioritize. we have, as you saw the threats that we face are substantial. >> mr. mull, it's one thing to prioritize. everybody does it at home and in their businesses and the other is to have do it on the cheap. are we givinging you enough money to not only prioritize but to fully and robustly deal with the threats that the united states faces and if you think you need more money, now's the time to tell us. >> i would say that my concern in the immediate future is having sufficient funds to build up the capabilities to address cyber in the same way we had -- and were afforded the funds to address counterterrorism. whether it's 2013, 2014, 2015, i think that is an issue that's going to require additional funds down the road. >> could you give us some estimate privately or whatever's appropriate about how to build up the cyber account because not only do we need new laws to deal with the cyber threat, we

probably need to fund you more robustly. so thank you. >> thank you. >> will you be able to come to our classified -- >> yes, ma'am, if i can get back from my press conference about medicare, i will be here. and if wi can save money on medicare, we'll give some of it to him. >> senator graham, thank you very much, and we'll look forward to you in the classified hearing. your considerable expertise in the armed services and, again, you're a j.a.g. officer, your information was extremely informative. i want to comment on this side. senator alexander is an cement because of illnesses. he wanted to let you know his absence was due to a very compelling family reason. senator? >> thanks, madam chairman and thanks director mueller for the wonderful work that the fbi has

done, the diligence and the competence that your people operate with. and hat's off to you for your leadership there. it's quite incredible when we hear a review of what has happened budgetarily for these years, and i'm reminded that on 9/11 the loss of lives and the restriucturing of our society took place in a way that is not yet fully understood. on d-day at normandy, on pearl harbor day, we didn't lose as many americans as we did on 9/11, and what we find, the proliferation of guns -- and i'm not doing a second amendment review here. we're talking about guns in the

wrong hands. we're not talking about people who apply and duo through the rigors of testing as they do now. one of the questions that i'm really anxious to review, and that is we now understood -- understand that people from the new york police department were doing surveillance in the state of new jersey, across the river into our sovereignty. and last week the special agent in charge of the fbi newark office criticized the new york police department's surveillance of new jersey communities and universities saying, and i quote, it makes our job much, much harder. mr. director, how do you feel about that? >> let me start off by saying that we have a very good relationship with nypd, and the

work that the nypd has done since september 11th to protect new york and the surrounding communities is first rate. and there has not been a successful attack on new york in large part attributable by the work that's been done by the new york police department along with the joint terrorism task force that's been ongoing for many years in new york and new jersey and elsewhere. often there are issues in how you go about doing your work that arises over a period of time where there are burps in the road in terms of cooperation. and my expectation is that whatever bumps in the road there have been in the past in terms of alerting people to actions that are taken will not take place in the future, but it should not interfire with the work being done and done

exceptionally well with the joint terrorism task forces in new jersey as well as in -- as well as in new york. >> yeah. i agree with that, director. but the fact of the matter is there ought to at least be some privilege given to the law enforcement structure in our state and for them to be alert. why should be that information available? what about cross-currents and bumps into one another? i'm not going to press you further on this. >> no. i'll tell you to be as -- as everybody knows you, have jurisdictional issues between the fbi and state and local law enforcement, between sheriffs and pleats chiefs and the like. it is not unusual to have that. and my belief is you sit down, you talk about it in private, you get it resolved, and you move on. that's what has happened over a period of time, whether it be new york or philadelphia or

washington, d.c., los angeles, or what have you. and so i -- as was pointed out by the s.a.c. in his remarks, he has a good and they have a good relationship with nypd in new jersey. >> that's true. i want to ask you a question about people on the terror watch lift. th they're able to have guns or explosives. anyone can walk into a gun show, purchase a gun, no questions asked. and when you look at the statistics of murders in our country compared to other advanced societies and our numbers dwarf anything that comes from other places, england, germany, australia, you name it, canada. isn't it time to close that terror gap and the gun show loophole? >> as we've discussed before in

each hearing that we've had, i'd defer to the department of justice in terms of particularized legislation, but needily to say, anything that can keep the hands -- the guns out of the hands of criminals or terrorists or the like is something that is beneficial in terms of reducing, at the extent of -- i believe the extent of violence in our society. >> madam chairman, may i continue with one more question, even though the gun may go off? cruise lines are required to inform the fbi about serious crimes and the number of crimes that are supposed to be made public. however, according to fbi data that i obtained, the number of crimes posted online is lower than that reported by the industry. we're planning to change the law to address this discrepancy. in the meantime, what steps can the fbi take to publicly disclose the actual number of

serious crimes on cruise ships? and i don't want to -- i'm not interested in hurting the industry, but i am also not willing to permit crimes to be developed and not -- not give public -- the true facts about what's taking place. >> well, i think you raise two issues. one is the extent of reporting and compliance with the law which requires reporting. certainly we can educate cruise line companies in term s of the necessity of doing that that they comply with the statute. secondly, in terms of making public those figures i have to go and get back to you. i am not certain to what extent they are publicized and if not why they would not be publicized. >> thank you, madam chairman. >> before i turn to start feinstein, i just want to comment. you have a long history on

defending people on cruise ships. do you remember, there were some terrible incidents many years ago. >> absolutely. >> and you're to be congratulated. we freneed to protect the peopl who sail on the seas from pirates or other despicable behavior and we look forward to hearing for from you. >> thank you. >> senator hutchison who is going to be next yields to you so then we'll go to murkowski and hutchinson that way. okay? >> well, thank you. >> thank you very much. i wanted to take up where senator graham left off. and there has been an effort emanating out of the arms services committee to change the defense authorization bill to essentially put this country's detention policy under the laws of war. and under the laws of war, an individual can be held without charge or trial until the end of

hostilities. the point made that america is a battlefield and i think that's the point that some have been trying to make. i'd like to ask your view of this. i am strongly opposed to it. i also know what you said during the worldwide threat hearing, that the fbi has interrupted or arrested some 20 terrorist plots in this country over the past year. you have the high value interrogation group, which you testified to the house committee has done 14 interrogations and i gather with some success. i would like to ask you to comment on whether you believe that permanently detaining americans without trial, without a trial or charge is

appropriate? >> i would have to start with nbaa legislation that has recently been passed which addresses that particular issue, and as i think you and other, aware i had some concerns at the outset in two areas. the continuation of our authorities during this possible transfer to, not transfer, detention initially into military custody here in the united states and secondly, whether or not there could be clarity in terms of -- either the statute or presidential directives that would clarify the process in which a person's deemed to be not an american, non-american citizen, but a person who is an al qaeda affiliate engaged in a terrorist plot not an american citizen to what extent there would be immediate military detention? with both the statute as well as the president's directives i'm comfortable that -- that the

capabilities of the bureau and coupled with the capabilities of d.o.d. will be maintained in that rather unique situation where you have a foreigner, not a u.s. citizen, who undertakes a terrorist attack affiliated with al qaeda in the united states. i'm looking at that discreet issue and are comfortable we preserve what we needed to preserve in terms of our role in that process. >> the broader question that you have -- >> the broader question is that the law is very cloudy. and this is a problem. and the court has had some holdings that can you not detain a person indefinitely regardless of whether they are a citizen or not in this country without charge or trial. >> well, the supreme court has occasion to -- on certain

aspects of that, and i am -- what i have wrestled with is particular pieces of loach slags that would impact that process where a person is detained in the united states, a u.s. citizen, non u.s. citizen as the president and the president's prerogative to determine whether or not ultimately a person is tried or you proceed against that person in an article 3 court, which we operate, or in a military tribunal which has also been yul held by a supreme court. and so with the ndaa legislation, i believe that the issues have been flushed out to the extent that i'm comfortable with that, but i really hesitate to comment on other issues which have, either not been the subject of legislation or are unique to a particular circumstance, where you really don't know the facts and not knowing the facts it's very hard

to apply the law. >> right. i appreciate that and i appreciate the need for executive flexibility in whether it's military or whether it's federal court. having said that, senator mikulski and i serve in fisaened mufisaened -- and must be authorized by the end of the year. do you view that authorization as important? do you view it as valuable and if so, why? >> i would go beyond, use the word critical. because the world in which we live today is -- a, talks about a flat world with technology criminals, terrorists, cyber terrorists cut across borders at will in seconds, and it is absolutely essential that the

intelligence community whether it be domestic but most particularly foreign has the flexibility and capability of obtaining communications by these individuals as quickly as possible in order to prevent attacks. whether those attacks in the future be a terrorist attack on the infrastructure, on the financial structure, or attacks by al qaeda and like in cyberspace. absolutely essential we have those tools. >> would you say the -- is a critical tool? >> it will be in the cyber arena. >> yes. thank you much. thank you, madam chairman. >> senator feinstein, i hope you can join us shortly in our session as well. senator mikulski. >> thank you, madam chairman.

welcome. nice to have you here. this morning the investigative report that details the prosecutorial misconduct in the case against senator ted stevens was released. it was -- it was, i guess, precipitated almost that the brady violations came about, but not until five months after that trial was complete d that we learned of these violations and it came about because of a kpleent that was filed complaint that was filed by an fbi agent that alleged the prosecutorial and our law enforcement misconduct in that case. in my opinion that was sepexcep good work by that agent and judge sullivan suggested that wereno