how many lives it saved i think we can say pretty confidently it definitely saved lives. u.s.a.i.d., the office of foreign disaster assistance and our mission in the philippines have worked many years with the government of the philippines to help build up their disaster risk reduction capacity and they take that very seriously because they are hit by disasters many, many times a year.they tak in this case the storm was hit anticipated well in advance. and there are regional nce. meteorological networks that help contribute to that awareness. that enabled the government of the philippines to evacuate nearly 800,000 people into emergency shelters out of the way of the storm's path as well as prepositioned food and some other commodities. >> so reports the storm surge took many people by surprise you think is exaggerated?surge >> the storm surge was surprising. what we were anticipating was certainly heavy winds, rainfall -- actually, we were r anticipating a much worse rainfall problem than we saw. these predictions are never

exact. >> did the storm surge come as a surprise to our scientists as well? >> the storm surge -- and much o like i think with superstorm sandy here where the severity of the storm surge was not rm anticipated i think it's a similar dynamic there. we anticipated some but not a 30-foot storm surge.30 >> do you think after hurricanei sandy and after this situation a that we should begin to te reevaluate what it is that we should be expecting in terms of storm surges? is the fact that the oceans are getting so much warmer and the c storms so much more dynamic something that should be factored in to what it is we include as warnings from storm surges? >> you know, i think -- and i'm not a scientist on these issues. clearly we need to factor in the potential for storm surge. and i'm not sure what the science behind making that possible looks like. but it's something in our -- ngt after any disasterha like this

usaid does a review and i'm sure that will be a factor we look at. >> it's my understanding many ot the casualties occurred in government shelters that collapsed or flooded.we were they badly built and the positioned or was the storm just too strong? >> senator, my understanding isr that -- i can't speak for everyone, but in general people were evacuated to storm shelters that most of us had anticipatede would serve the purpose effectively. but the storm surge in particular that jeremy described i think affected and inundated some of those shelters even if they withstood the wind and the rain. >> this was an ef4 tornado strength, you know, winds.uilt what were these shelters built to withstand? do you know? >> i don't know offhand but we can look into that. there's going to be -- certainly once this initial period of

intense relief activity settlest down there's going to be a lot t of probing of those kinds of ofp questions. >> i thinkr it might be advisabi for us to work with them so that we might be able to give them a good recommendation as to what the strength should be given kind of the predictable nature of intensifying of storms. water expands when it's heated. the oceans are getting much warmer. and as a result the waves are ch much higher. as a result the storms are more devastating. this is something that's scientifically indisputable and i think that we should work with them to help them work it through. it's worth noting that this etn typhoon was forecast to hitaf vietnam after it struck the viea philippines. just last month the usa and vietnam agreed to a civil nuclear cooperation agreement. i think we should begin to think

about whether or not we should be putting nuclear power plants, you know, with u.s. cooperatione in countries like vietnam knowing that without proper protection there could be catastrophic consequences that l flow from the interaction of a natural disaster and a nuclear power plant that is not as strong or as well positioned as it could be. we just saw that in japan.tions they're going to be going several generations with the a consequences of a natural disaster linked to nuclear powen plants. and so from my perspective i want to, you know, congratulatev everyone who participated in helping, especially in these early stages of relief.but but i think for u.s.a.i.d., for the state department, for the defense department, i think that

we all have to come together in a way that deals with the national security consequences ofof climate change, the impacti that it's having upon our allies and our enemies. that modifies their behavior in terms of how they are able to in fact control their own environment and understand thenm what the consequences are for our national security because theirs is undermined. so again, it's just one more warning. and if we needed it it's a domestic issue as well, with 65l tornadoes all dropping down in one day out in the middle west s in the middle of november. this is unprecedented, the impact that climate change is s having, and it has severe long-term national security consequences, and we thank both of you for your work, mr. chairman. >> let me join senator markey is

his concerns. it's clear that the relates of more extreme weather require uso to be engaged international ly n mitigating as much damage as wee can with the n new reality.nator of course the best course in which senator mark yees been one of the leaders is to do something about this from the standpoint of climate change. of i think both are important nt pi points, that the costnt of thes storms in loss of life and in the cost of rebuilding communities is enormous and beyond the capacities of government to be able to respond to. and then when you put certain ik facilities in these high-risk areas the security issue becomes even greater and the cost even . greater. so thanks, senator markey, for raising those issues. i am very impressed by the u.s. response to this storm, and i thank both of you for your

leadership. mr. konyndyk, i wish you safe travels tomorrow.afe mr. marcel, we wish you a speedy return here tomorrow for our yo second hearing this week of the subcommittee. but we thank you both for your r public service, and we will ntee continue our interests, and we y thank you for not only your ngns testimony today but your willingness to keep us informedo as we look at the long-term rebuilding process that's going to be necessary in how the united states plays a role in that, in following up on senator markey's points as to what we should be doing to try to mitigate these types of disasters in the future. and with that the subcommittee will stand adjourned. thanks.

president obama spoke today at an event hosted by the "wall street journal." you can see the entire event at c-span.org. here's a little of what he said about partisanship. >> so we're going to have to do it all. in my conversations with the republicans i actually think the divide is not that wide. so what we just have to do is find a pathway where republicans

in the house in particular feel comfortable enough about process that they can go ahead and meet us. this, by the way, jerry, i think is a good example of something that's been striking me about our politics for a while. when you go to other countries, the political divisions are so much more stark and wider. here in america the difference between democrats and republicans, we're fighting inside the 40 yard line. maybe -- >> you fooled most people on that in the last few months, i'd say. >> no, but -- no, no, no. i would distinguish between the rhetoric and the tactics versus the ideological differences. i mean, in most countries you've got -- people call me a socialist sometimes. but you've got to meet real socialists. you'll have a sense of what a

socialist is. you know, the -- i'm talking about lowering the corporate tax rate. my health care reform is based on the private marketplace. stock market's looking pretty good last time i checked. and it is true that i'm concerned about growing inequality in our system. but nobody questions the efficacy of market economies in terms of producing wealth and innovation and keeping us competitive. on the flip side, you know, most republicans, even the tea party -- one of my favorite signs during the campaign was folks hoisting a sign, "government, keep your hands off my medicare." think about that. ideologically they did not like the idea of the federal government, and yet they felt

very protective about the basic social safety net that had been structured. so my simple point is this -- if we can get beyond the tactical advantages that parties perceive in painting folks as extreme and trying to keep an eye always on the next election and for a while at least just focus on governing, then there is probably 70% overlap on a whole range of issues. a lot of republicans want to get infrastructure done just like i do. a lot of them believe in basic research just like i do. a lot of them want to reform entitlements to make sure they're affordable for the next generation. so do i. a lot of them say they want to reform our tax system. so do i. there are going to be differences on the details.

and those details matter. and i'll fight very hard for them. but we shouldn't think that somehow the reason we've got these problems is because our policy differences are so great. >> well, the -- >> a typical day would begin with her coming in in the morning, probably around 9:00. and she would come in toting a straw bag in each hand filled with some of these things you see on her desk that she had taken home for signing or speech writing or event planning or whatever she was working on. she'd come in. her desk was always very orderly. and as she worked on her desk with letters she was processing or things, when she completed things she'd put them on the floor. she loved this office because she could look out at her alma mater and then a corridor through to the capital in the city she loved so much. we had three office staff at the time. we had a person who handled her

calendar. we had a person who came from the white house as her press secretary who helped her work on speeches. and then i was in the office. by friday afternoon she was ready to leave and go to the ranch, which she really called home. and about 3:30 in the afternoon she would say do i have anything else to do? and if the answer was no she would say tell the secret service i'm ready to go. watch our program on the first lady lady bird johnson on our website. or see it saturday at 7:00 p.m. eastern. and you our series continues live monday as we look at first lady pat nixon. now a hearing on the future of digital currency. members of the senate banking committee also discussed how to better protect consumers online. this is a little more than an hour and a half.

i'm pleased to co-chair this joint subcommittee hearing on the present and future impact of virtual currency.mpact of my friend senator merkley and ir also appreciate the work that senator heller has done. i know senator kirk is going to be joining us as well.one we're going to do this a little different because this is a joint subcommittee hearing. i will chair the first panel. and senator merkley will chair the second panel.s the uses of virtual currencies have proliferated in recent years. my hope for this hearing is to educate the senate members and m others. and start the education of the public about virtual currencies, including their potential and drawbacks.

i also hope to explore how regulators are keeping up with g this technological innovation to protect consumers. and i've gotpr a full statement here, but i actually have to he acknowledge that, you know, i'vc been following this kind of development of bitcoins for the last few months.hs. and i think i'm only starting to wrap my head around the ntial potential up side, down side, regulatory issues, monetary policy issues, taxation issues, consumer protection issues, tha this innovation represents. and rather than going through my whole -- i'll just point out tot the witnesses and those that back in 1982 i had the opportunity to get engaged in a

new industry at that point that was on the cutting edge of an innovation called cellular o telephones. and all of the experts at that h point t thought it would take t world 30 years to develop out a wireless network and at the endr of that 30 years about 5% of of americans would use them. luckily for me the experts weree wrong. and now these devices transform our lives. getting it right from all of the regulatory, financial, consumer points around virtual currencies, bitcoin in particular, could poise as great if not greater challenge and opportunity. and what my hope is this will b the beginningsbe of an effort t come in with open minds to hearu about the potential but to also

hear about the important ramifi ramifications around monetary policy, around taxation. think about the notion with this 21 million bitcoins that could be created and as we see acceptance, i understand the f.e.c. has already allowed s political contributions to be te made in bitcoins. so this is a development that's already in process. but if this becomes a standard currency or tool, it could radically and dramatically transform the role of central banks, monetary policy. tran it could transform -- it has enormous security concerns. i so i am very, very interest ed s this hearing as a member of the intelligence committee. i'm concerned as well about the

potential abuse of this velopmen development. but i think as we see now aboute somewhere between 10 to 12 million bitcoin that's have beee mined and just the reactions yesterday from senator carper's hearing where i believe bitcoin spiked at over $700 per unit., r we're talking about a currency that has already been monetized and we as policy makers in wayse will have to catch up. so i'm very much looking forwara to this. really appreciate my colleagues and in particular senator merkley's interest in this. and with that i'll turn to senator heller and we'll go back and forth with just a couple ofc quick opening statements.k witha and then i'll get to introducins the wintszs. and >> thank you, mr. chairman.ommie i want to thank you and chairmag merkley for holding this we're subcommittee. i think we need to have more of these. and with that i'll keep my statement relatively brief. today we're here to learn aboutn

virtual currencies and cryptocurrencies.cies. the most popular of which of course is bitcoin. while generations in nevada have mined for gold and silver, copper, today nevadans can now l mine for new virtual currenciess on their computer. while these virtual currencies a are not yet widely accepted, th number of users continue to grow. and we must recognize that these innovations decentralize digital payment systems. today i look forward to learning about the long-term viability and practicality of virtual ticy currencies. i also want to learn how various government regulators interact i with virtual currencies, which by their design are meant to ben independent, of course, of any government. i will end with this note. the internet is a new frontier of innovation. is new with every new internet-based technology i believe that members of congress should sh recognize we often don't knowoun what these new advancements wilw develop into. adv while we must ensure proper

safeguards, it is my hope that c through hearings like this we nt can help maintain an environment that helps promote new technologies and innovative growth. thank you again to my n colleagues. i look forward to hearing all ow the testimony from our witnesses. >> senator merkley. >> thank you. and it's a pleasure to co-chaira thisir gathering. i see by the full room the level of interest and enthusiasm in this topic. certainly this is a new technology strategy that has a tremendous number of implications. the wave of innovation is he wor reaching into the world of curren currency, payments, and money transmission. we've all heard about exciting developments such as mobile payments and companies like square which rely on classic com banking system payments. this latest generation of technology, which we're talking about today, takes things to a whole new level. with the creation of virtual currencies like bitcoin and more recently ripple, we're actually seeing payments transacted entirely with peer to peer trust

driving the stores of val krewe. combined with open source code and a public transaction ledger listing every transaction, virtual currencies are truly a completely different animal.t similar to the ways that the e last decade's innovations out of the silicon valley and silicon forest have improved people's lives -- i had to throw silicon forest in there because that's r inow oregon. developments in virtual currency have real potential to provide r value to american consumers and businesses.zens and lower transaction costs. more secure money transmission. these are significant qualities. at the same time leaving this space unwatched and unregulatedn will all but ensure it is full i of pitfalls for userlls and lawa enforcement alike. we've had recent news about illicit activities, narcotics, money qularngd. we've had rapid fluctuations in the value of the market for the bitcoins p p we have questions about consumer protections. and there are certainly therefore a lot of issues aboutr whether virtual currencies are ready for primetime.

today's hearings will explore is the current and future state of virtual currency, especially ho it affects core financial ia services that families and businesses rely on to move mone and make payments.a whereas the potential for and innovation and opportunity and where are the gaps and weaknesses along the way? i wanted toga note, i have a g recent article here called ses businesses enter the world of digital currency. back in 2009 greg abbott, the owner of withee's fried pies, e was hanging out with a bunch of tech enthusiasts along his food cart and he was discussing the s potential of the then new online currency known as bitcoin. and one of the folks hanging out, an early investor, offered abbott 1,000 bitcoins for one of his hand pies.pies. he says, "i didn't say no.he s i just got distracted and the n. individual wandered off."in and he says, "that was a stake. $250,000 mistake.. silly me."based on well, based on yesterday's value

that was a $700,000 mistake.n that certainly would have been the most expensive pie in the history of humankind. this is absolutely fascinating. by the way, he did proceed to start accepting bitcoins as a number of portland facilities have done, using a mobile app that converts from dollar co bitcoin to dollar and back and forth based on the most recent exchange rate.rate so. this is actually a functional, viable technology at this very moment. so with that senator kirk. senar >> senator kirk. >> thank you, mr. chairman. not just thank you for gathering us together on this bitcoin effort. i would say that i have been i o worried about bitcoins, that rrd because it's so complicated it could -- it could facilitate illegal activities or terrorist activities. >> thank you, senator kirk. sen and i think that's obviously one of the focuses we'll work on ine this first panel. let's get to the witnesses.

let's get to the real experts.es the firsset panel, as mentioned will focus on the governmental side. the second paneler will focus ml from some of the advocates, and i think it will be an interesting afternoon. we have ms. jennifer shaski-gavari is the director of financial crimes enforcement network. prior to joining treasury she was chief of the asset forfeiture and money laundering section at the u.s. department of justice. as chief miss shasky-cavalry managed a justice department program responsible for the of annual forfeiture of more than 1.5 billion in criminal assets and related programs to make hoe sure those assets were returned to victims and reinvested in law enforceme enforcement. she's also testified before congress on a wide range of issues including transnational organized crime, financial nal crime, state business me, incorporation practices, and

this one will please break some new boundaries as well.mmonwe welcome. mr. david kameny has served in that position since november 2010 over seeing over ng200 ban and credit unions with assets in excess of 325 billion.cotney mr. cotney is an active contributor to consumer protection efforts both in massachusetts and nationally. in 2013 he was elected as vice chairman of the board of directors of the conference of state bank supervisors whose behalf he testifies here today. mrs., mr. cotney. miss shasky-cavalry, if you could start. >> chairman warner and merkley, rafrking members kirk and heller and members of the subcommittee. i'm jennifer s hachlt sky calvery, the director of the financial crimes enforcement network. i'm pleased to be here to i'm he discuss the work we're doing at finsen to prevent illicit actors

from exploiting the u.s. financial system as technological advances such as g virtual currency create new ways to move money. recognizing the potential for abuse of emerging new payment a methods anymd understanding tha anti-money laundering l protections must keep pace with these advancements, finsen begag working with our partners several years ago to study the issue. here's what we learned.le illicit actors might decide to use virtual currency for many of the same reasons as legitimate a users but also for some more us nefarious ones.specif specifically, an ullist-it actor may choose to use virtual ency b currency becauseec it provides anonymi anonymity, is easy to navigate,y may have low fees, is accessiblw globally with a simple internet connection, does not typically have transaction limits, is generally secure, and provides a loophole from the aml cft reg regulatory safeguards in most mt countries around the world. indeed the idea that ill lits actors might exploit the vulnerabilities of virtual

currency to launder money is not theoretical.to l liberty reserve engage in a 6 billion major money laundering e operation. and just recently the department of justice addressed that y, customers of silk road, the largest contraband marketplace on the internet, were required t to pay in bitcoins to evade y detection and facilitate launders hundreds of millions of dollars. that being said, it's also important to put virtual currency in perspective. it's been publicly reported that bitcoin process transactions worth approximately $8 billion p over the last year.last but by way of comparison, in in 2012 bank of america alone made $245 trillion in wire transfersa thus, while of growing concern l to date, virtual currencies have yet to overtake more traditionar methods to move funds whether for legitimate or criminal none purposes. nonetheless, to address growing concerns, in july 2011 after a public comment period fincen

released two regulations which update several definitions and provide flexibility to t accommodate payment system g innovation including virtual currencies under our pre-existing regulatory framew framework. then last more fincen issued additional guidance to further u clarify the compliance regulations. in short they're required to register with fwincen, put aml controls in place, and provide s certain reports to fincen.n repo it's in the best interests of virtual currency providers to u comply with these regulations. any financial institution could be exploited for money laundering purposes. what's important is for poses. institutions to put controls in place to deal with those money laundering threats. at the same time being a good e. corporate citizen and complying with regulatory responsibilities is good for a company's bottom line.om every financial institution needs to be concerned about its reputation and show that it is

operating with transparency and integrity within the bounds of the law. legitimate customers will be drawn to a virtual currency or administrator or exchanger wher they know their money is safe ny and where they know the company has a reputation for integrity.i and banks will want to provide r services to administrators or t exchangers that show not only great innovation but also great integrity and transparency. the decision to bring virtual currency within the scope of oun regulatory framework should be viewed as a positive developmen for the sector.or it recognizes the innovation virtual currencies provide and the benefits they might offeprr society. several new payment methods in the financial sector have proven their capacity to empower customers and expand access to financial services. we want such advances to continue. however, those institutions that choose to act outside the law will be held accountable. fincen will do everything in its regulatory power to stop abusesl of the u.s. financial system. we have proven our willingness . to do just that by using our targeted financial measures nes under section 311 of the patriod act to name liberty reserve as a

primary money laundering concert and take steps to terminate its access to the u.s. financial system. we stand ready to take additional regulatory actions a necessary to stop other abuses.s as the financial intelligence unit for the united states, fincen must stay current on how, money is being laundered in the united states so that we can share this expertiseow with ourn domestic and foreign partners ri and serve ass the cornerstone o this country's amlcft regime. we are meeting in obligation in the virtual currency space as we continue to deliver cutting edge analytical products to inform the actions of our many r many partners.as m the administration has made appropriate oversight of the ove virtual currency industry a priority and fincen is very encouraged by the progress we have made thus far. thank you for inviting me to testify before you today. i would be happy to answer any questions you may have. >> thank you so much. mr. cotney. >> did you.merkle good afternoon, chairman warner