long recognized the growing capabilities of north korea. last year i held two hearings specifically on north korea. it's one of the understandings mo vexing security challenges so just a couple questions. ambassador kim, in june of last year the cybill committee heard testimony from your predecessor, ambassador glen davies, and in his testimony he said china is north korea's quote last remaining patron unquote, however, as chairman royce already mentioned pyongyang has a growing relationship with russia and illicit note works with cunning in the middle east, especially iran. we know that north korea maintains a fairly robust

illicit trading network with these rare nation states, and last year signed an economic trade deal with russia. this will provide pyongyang with an economic boost to counter sanctions and counterbalance the chinese who have been putting some pressure on them. there's a growing speculation about how big north korea's cyberarmy really is, and where it has received the training to orchestrate such an attack. could either of you first describe the cyber-capabilities and expertise and finally do you have a sense of how big that

cyber-army is? >> thank you very much. i would refer to the general on the cyberissue. i think franklynoic is running out of friends because of their is it abus. china has a -- i think what we have seen in our conversation with china is china is working with us more effectively in trying to stifle north korea's dangerous activities. i think all of us need to do more, including china. there is been some contact, some senior-level discussions, but i believe the bottom line is the russians remain committed to the shared goal of, and they do want

to make sure that the north koreans move in that direction, despite some of the contact we have seen recently. >> most of these tools are readily available through anyone around the world. many are of tactics techniques in cyberspace predominantly criminals are openingly available through the marketplace and frequently posted online. so the acquisition of capables is readily available. >> thank you. i think i have time for one more question. north korea's cyber-capabilities were first revealed back in march of 2013 as south korean

financial services and media firms were attacked. at that time it was the latest attack from a malware development project called operation troy which revealed pyongyang was attemptling to spy on and disrupt south korea's military and government activities. could you say whether north korea's focus on using the master boot record wipe functionality, if you have familiar with that, for its attack on south korea is similar to the attack launched by -- on sony and what possible responses or protections do we have against this type of cyberattack? >> thank you very much for that question. at the attack using a wiper virus or capability to attack the master boot record in essence means that every computer has an instruction set that's campaigned in part of the

disk called the master boot record. it tells the computer what do do when it's turned on. it tells where the information is stored and the like. using an attack against that master boot record basically wipes out the record. the computer no longer knows how to turn itself on and to look for the information. it's a very devastating attack to the computer. as we look at the code, and we've done in mall ware forensics with the malicious code that was discovered as a result of this attack, it was a sophisticated, well-organized pieces of code that was specifically engineered to attack that master boot record. when it comes to detecting that type of malicious code, it's very difficult to do that for each and every piece of code. our current database of malicious software numbers over 100 million different sample sizes.

that said, we have taken the information we have done from our mall ware forensics, and we have loaded those indicators not only into the einstein system to help protect our federal systems, but we have also shared that with our international partners, with the private sector and the like. so the indicators that we have derived from our analysis we have shared, but this is very, very well-crafted code, sir. >> we go back to mr. brad sherman. >> witnesses should relax for a few minutes, as i have an opening statement, but don't relax too long. obviously north korea is worthy of sanctions. but how do you have trade sanctions against a nation name and shame a country that is shameless? the ranking member and the

chairman have pointed out that we can have secondary sanctions. their bill does just that, and the secondary sanctions are where we threaten another country or a bank or other company in another country with sanctions if they do business with north korea. we would start with the government of china which doesn't just do business with north korea, but gives them free money, free oil subsidies. and i notice the ambassador points out that the chinese have perhaps on occasion stifled north korean behavior by pushing them to be a bit less aggressive. but the fact is last month they threatened to blew up the

members' district you have here. for now regardless of the annoyances they're backing north korea, every day they're giving them free oil. every day supporting them militarily and diplomatically. so we would have to do things that china disagrees with. do things to chinese companies, do things to china's own trade relation-. wicket designate them a currency manipulator if they don't radically change their behavior. this has the additional advantage of being true, they are a currency manipulator. since we are probably unwilling to do that, i think we would target this or that bank to some success, at least to annoy north korea, but china seems to have made a strategic decision that north korea's success is so important that they will give

them free money. i can't imagine they will allow us to completely shut off their banks relationships. so i support all the efforts of the gentleman here and ranking member and the chairman to try to turn the spigot down a bit, but i don't think we can turn it off. there's one other thing we can do. first we all to reflect this is a unique attack. it wasn't an attack gentz a company, but against freedom of speech in united states. i would like to give north korea a double dose the free speech. we spend $8 million broadcasting into -- we could increase that. right now we're broadcasting into north korea only 11 hours a day. the target is 12 hours a day. it ought to be 24 hours a day.

and i believe that those broadcasts will undermine the regime both with the people and the elite. i can't think of anything we can do for $8 million that would better express our ked indication to the first amendment, and to posing difficulties for the north korean regime. i'd liked to explores satellite television into north korea and other television broadcasting because i particularly want to broadcast a particular movie t. and i hope we do the director's cut before they toned down the climactic scene. i commend to all of those on the xhitee the december 8th report issued by the broadcasting board of governors, which of course oversees voice of america and radio free asia. this report was issued pursuant

to the north korean human rights reauthorization act that went through this committee. general how certain are you that north korea is the entity that both hacked sony and threatened terrorist action against our movie theaters? >> thank you very much for the question. just for clarification, i retired from active duty and reported to come on board as the deputy assistant secretary. >> thank you for that clarification clarification. >> attribution is not a function of my organization, but a function of the intelligence and law enforcement communities. that said, i'm well sfoep

familiar with the things that are done by the intelligence and law enforcement communities. based upon what i have seen and in consultation with my partners from both 9 intelligence communities and law enforcement communities, in this particular incident, i have trust and confidence in their conclusions. >> and you've seen more than some of these outside experts on 24-hour news channels that think they can second-guess? >> yes, i've seen more than ss@(@r(t&háhp &hc% of the colleague my colleagues in the private sector. >> mike mccall. >> i appreciate you being here. thank you. >> we just passed the big five cybersfap bills one codifying,

the end kick which is like the cybercommand within dhs, given it the congressional seal of approval. i see it as really the civilian portal to the private sector. when sony happened f. i had asked the question, well, which of the 16 cry can infrastructures does this fall under? and it's a bit -- it's not clear. i know the president is announcing a i'mer plan this afternoon. i just got off the phone with the secretary. i think the vision is to make the department of homeland security the portal civilian interface to the private sector between the federal government and the private sector. sharing information from various data points whether it be nsa fbi, through the to the private sectoor, to incentivize

participation in this civil yags interface, safe harbor within the department. i just wanted -- after this, i can't to talk about the foreign affairs aspects and the cyber-jihad threat to centcom that we just saw. how do you view of role of the dhs broadening with respect to the event that happened with sony? >> thank you very much, sir, for the question, and thank you for your leadership in helping us with the legislation that just passed and your continued support of the department. thank you very much. as we take a look at the end kick, integration is part of our name, with the you see national cybersecurity and sfep -- the other departments and the agencies and our private sector -- are part of coming

together with the ncik team, they have the ability where they are bringing in folks of all sorts of aspects and the intelligence community as well as representatives from the department of defense. so that we are sharing information. we're very transparent with each other. the information ranging from top c-grid sensitive compartmented information down to -- we're finding these partnerships is helping strengthen not only our situational awareness, but getting solutions to issues as they come in. we are working together to secure and make our infrastructure more resilient by

leverages the activities testify ncik. we have come a long way as we look to the future the legislation that's proposed and the activities that have already occurred are -- >> the division i would like to see is that it expands not just to the 16 critical infrastructures, to the sonys offed world could participate as well. because there is a broke bust privacy office at the department of homeland security. i want to just close with that. we had the sony attack and then yesterday an attacked by cyber-jihadists reporting to be on behalf of isis at centcom.

this is disturbing. iran is becoming more sophisticated. now with these jihadists groups that we've seen attempting to get this type of technology actually become successful as hacking hoo our centcom into our military isis. this is severely disturbing to me. proportional response, what does that mean? and i would like to work on a cyber-aenda, because it's outside the lants of my committee.

and in this case when a terrorist organization hits our military. general? >> thank you very much sir. to address the points -- the first one about the attack and the attribution that it got into the centcom networks, first of all, this was a commercial space, a twitter account. there was no compromise and there's no evidence of any penetration into government specifically the military computer systems. rather, it was a commercially facing bulletin board as it were, through the twitter account. certainly anytime there is compromise of any account it's serious business. and in talking with my partners in the department of defense and the fbi last night, they were investigating it with all due vigor. i will be getting an update from them later today. >> let me close, i think mr.

chairman, we have an opportunity to work on this committee on legislation that could deal with defines what is proportional response, how other countries should respond with us. what is going to be the response of the united states of america when our companies are attacked and our departments are attacked and the military is under fire. with that, i yield back. >> thank you, by the way, mr. mccall i would be happy to work with you. i was working with mike rogers on a piece of legislation and maybe we can work together, and i appreciate you bringing it up and look forward to working with mr. engledge engel as well. >> if you're looking for a democrat, i would be glad to work with on you that as well. >> balance in all things. >> cyber-security is a big issue on my district. we do a lot of work on it so i would be dlibted to help in any

way, and i thank the chairman and ranking member for holdling this hearing. and welcome to the panel. the last comment, general, i think underscores something though. i distinct between the private and public sector really isn't a helpful distinction. 5% of the critical infrastructure is controlled by the private sector. that doesn't mean we don't have a public sector interest in it. and the interface between social media and other things we may be doing in the public sector is often almost seamless. that seems to me why we ought to be concerned even on the attack the other day, and better understand where the boundaries are or even if we want to recognize the boundaries. i think mr. mccall was pointing

out that we need to be rethinking the codification of seibel of her security attacks and severe and not only u.s. law, but frankly what it should mean in international law. if you have a cyber-pearl harbor, is that an act of war? at what point does the intensity and severity and magnitude constitute an acigarettesive act that has to be addressed? >> thank you, sir, for that question. the magnitude of the rubric of crossing that like, when did it become an act of war and currently the administration is working to put together that a codified construct for the priorities and the prioritization, and taking a

look at it from a risk management and consequence management, but ultimately through our congressional processes and our constitutional processes, rather, we will be making those determinations. >> i fully appreciate that will be a work in progress, but i think one of the tests or government faces is looking afresh at the legal codification of the subject, because we're really at a very early stage. we want to have it serve as a tool and ally in protecting. mr. ambassador does my memory serve me well that a few years ago probably the north koreaacy help down shut down the bankic system for a day or two? >> there was a cyber-attack on the south korean financial system. >> do we believe that was generated by the north? >> we believe so, more

importantly the south korean authorities have indicated that it's such. >> think about it. virtually the entire banking system wen down? >> i don't recall the exact extent, but it was a serious attack. >> the south korean economy ranks where in the world? >> 10th or 11th. >> so the 10th or 11th banking system in the world had it -- it's a real warning in terms of the north's capability is, and the vulnerability of a whole sector of not just south korea's economy, but frankly our own as well. china, how -- how helpful do we think -- you mention indeed your opening statement that china has more forth coming and we want them to be even more forth coming, but the chinese themselves are engaged in a very systemic way sponsored by the

pla. that state-sponsored cyber-security attacks so how reliable do we think the chinese are going to be trying to rein in the north koreans in their cybersecurity? mall feesens? >> i'll defer to john for part of that question -- >> to whom? >> the democratic h-- dhs colleague. >> all dimensions of it hat improved in recent years. for passing a resolution act of the nuclear tests last year. as an example of how the cooperation has improved. i think can can improve much further. when they think about the streejic interests, unconditionally defending north korean behavior. >> but my question -- we're

limited in time mr. ambassador. i understand that in general, but when it comes to this topic, cybersecurity, their hands are dirty. why would we count on them to help us rein in north korean cybersecurity attacks, when they're engaged in it with all four paws and snout? >> i think one of the reasons when they saw sony pictures entertainment attacked like this, it should have been a wake-up call to the chinese. they are also subject to irresponsible attacks from countries like north korea. >> i'm sorry. we're running out of time, but thank you. general, did you want to comment? >> as we take a look at information sharing, and the common threats and vulnerables that are out there when we have a common threat and as the ambassador had mentioned some

of the things that were observed could just as easily threaten the chinese, so it's in everyone's interest to address the issues and make sure that everyone is a responsible member of the community. >> just a final observation that sounds very noble and boy scout-like, but the fact is the chinese have been stealing military secrets from us, including weapons designs and bypassing, you know the r&d stage for quite some time. the pentagon knows that because the pentagon has been one of the biggest victims. it just seems to me -- i wouldn't rely on the chinese in that respect on this subject, given their record. i -- it is a problematic aspect of what we are talking about today. thank you, mr. chairman. >> we go to mr. poe of texas. >> thank you mr. chairman. globally there seems to be among the many bad folks in the world three main countries.

you've got syria, you've got iran and you've got north korea. i call them the s.i.k. access because they're in different parts of the world and they are a little sick. i understand that the official definition of nuclear weapons from our government is you have the bomb, but you also have delivery system. i want to divide that definition and just talk about the weapon, the bomb itself. does north korea have a bomb of some magnitude? ambassador? it's just yes or no. >> um i wish i could give you a simple yes or no. >> can you say yes or no? i just need a yes or no. either they've got it or they don't have it. >> we know think continue to work on the capabilities. >> do they have the bomb, ambassador?

i just need an answer. >> i'm not sure i can say that. >> mr. glazer you got an answer? >> i would defer to the state department on that. >> so you don't know whether they have a bomb or not? >> as ambassador kim stated, north korea has -- well, north korea has conducted nuclear tests. >> and thefr sent satellites into orbit. >> do you have a paper horse? do they have a bomb or do they not? >> sir, i don't know. >> you don't know. all right. i personally think they have the capability to make one, based on hearings we have had in this commit aye. looking on the other end, the delivery system, the president of north korea said he wants to develop the intercontinental ballistic missiles and for some reason he wants the first to go to austin texas. i take that a little personal

since i'm from texas. what is the status of the delivery system, if you know? general? >> sir i do not know. >> mr. glazer? do you know? >> it's really not a treasury department issue. >> how about you, mr. ambassador. >> we would be happy to provide you a full briefing on the capabilities. >> we've had some open meetings. they have the ability to produce a scud in a bucket as they called it a missile that can go from north korea to south korea? >> yes. >> do they have the capability to do that? >> yes. >> all right. is the united states used to have north korea on a state sponsor of terror list that was

removed in 2008. based on what you knowsh do you think it might be a good idea to put them back on that list? >> there's very clear criteria -- >> i'm just asking another yes or no question. >> my personal opinion i don't think is relevant. >> that's what i want to know your personal opinion. >> there is a criteria there is a process, and we're constantly evaluated all the information. >> how long is that evaluate going to take? after all they are hacking into our cybersecurity in the united states. do you all have a time limit? >> i understand your concern and frustration, but as a matter of law, the secretary of state must determine the government of that country has repeatedly provided supports for acts of t 8!uj and in an ongoing process -- >> excuse me mr. kim i'm re-claiming my time. do you think that hacking into

our system is it is an act of terror or not? >> i believe that is beyond my -- >> general, you're in the military. peer are afraid to say it is. i'm just wanting your opinion. >> i think sir, as we take a look at this this should be part of the public debate and we should have a comfort not necessarily constrained to this particular incident but as we look to the future for any cyber-incidents. >> that's the diplomatic version, i assume it seems to me that's an act of terror, we ought to strongly consider putting north korea, on state sponsor lists. it seems like the right thing to do, the logical thing.

i hope the state department makes up their mind before more of the attacks occur against the united states. i agree with mr. conley when he said that the line is very thin between an attack upon the government of the united states, and an attack on private industry in the united states. that seems to be an act, a terrorist act. i yield back, mr. quharm. chairman. >> mr. higgins? >> thank you, mr. chairman. the nuclear missile and cyber threat of north korea is -- is profound. the question is how does the united states respond to north korea's cyberattack on sony? an attack to punish sony for making a movie that humiliated the supreme leader. the united states options are very few.

counter attack to weaken north korea's military sflm assets, highly infectual. number two relisting north korea as a state sponsor of terror, and with that we don't have much diplomatic relationship with north korea, that too would be highly infectual. the serious threat posed by north korea far exceeds cyberattacks. normian cyberattacks -- intent backed by considerable capability. there is only wen gee on political option equal to north korea's threat. that is to work with our allies, both new and old to end north korea's existence been and reunifying the korean peninsula. north korea's nuclear threat. north korea has 4 to 10 nuclear devices and hind hundreds of

short and intermediate range missiles. they have an active uranium and plutonium program, and it's not inconceivable that north korea in time will have a puck lard capability to reach the united states. north korea regime is a proliferation threat. a decade ago it was helping to rebuild a nuclear reactor in syria, and it is a potential source of missiles and nuclear materials to rogue states, including terrorists. north korea has a serious conventional military which is a threat, an existential threat to the region. it's a population of 25 millions people and the fourth largest arm in the world. north korea's army is two times that of south korea with its population, which is half of south korea. there are 28500 american troops in south korea. further aggression by north

korea would bring the united states into a major costly and dangerous war. north korea is a threat to their own people. 100,000 political prisoners held under horrendous conditions. north korean cyberattacks against sony are not new. north korea regularly attacks south korean banks and businesses. also, there's a changing view of north korea by its neighbors, and only economic sponsored. china and south korea changed their views. the south korean president used to be lukewarm to talk about a unified korea. today the south korean president speaks openly of reunification and of the enormous economic benefits of that unification.

china is frustrated that north korea ignores its request to freeze or dismantle its nuclear program, but the nuclear armed north korea, south korea and japan will want object need to develop a nuclear weapons program. china increasingly is viewing north korea as a strategic liability, not an asset. china views north korea as a growing threat to china's stability. and china's ties to south korea have flourished. and china's president, regular visits south korea and not north korea. so while the discussion here is centered on cyberattacks i think there's a larger discussion that needs to take place. your thoughts? >> thank you, congressman. i think you're absolutely right

about china's evolves and improving relations. what china's strategic perspective? i don't think we can continue to assume that unconditionally defending north koreaial misbehavior is in china's strategic behavior. i think there's an ongoing serious debate on the future direction of the policy. one of the reasons is because they see the future of their relations with south korea. huge flow of traffic students, tourists, business people. i think that's where the future is for china on the grand peninsula. this is one of the reasons why we are starting to get more forth come inging cooperation. >> the gentleman's time has expired.

>> thank you. there's a wide range of other rogue regimes, including syria iran and cuba, though i guess it's not reply kale correct to say cuba is a rogue regime, but i believe that a tiger doesn't change its stripes that quickly. north korean ship was seized by panama in july of 2013. it was found to be carrying cuban and soviet era weapons from cuba. it sailed through the canal, to t. turned its transponder on was loaded with air krafl parts, mig 21s, other covered with sugar, taken back through the panama canal, seized by panama discovered the weapons in the ship. 32 crew members were released, the other three are still being held, i understand.

so you have the cuba/north korean connection there. let's talk about venezuela. venezuela is cubaest and best ally, if i look back to i guess december of 2011 the top diplomat in miami was linked to a cyberattack -- there's another rogue connection with iran. there has been flights from drawn to havana to venezuela i believe. so you have venezuela involved in cyberterrorism possibly against the united states, at least alleged. you have a cuba connection with north korea and we've got now a north korean cyberattack on an american company. it continues a lot of rogue nations involved in cyberterrorism and other things. so i've got to ask, ambassador, how and to what extent does

north korea engage in syria, cuba, and possibly maybe just by association venezuela, and the connection to cyberterrific there. >> generally speaking we're obviously concerned -- i don't have any specific information but we do know that north koreans had relations with a number of the cunning you mentioned. it's something we monitor very closely. it's one example i how international cooperation with field -- and i think this is an important point, because of our limited dealings with north korea directly we need international cooperation to make sure that sanctions actually can be effective. the situation you mentioned is a perfect example of that.

treasury. are you tracking any money? is there any evidence of money going from north korea to iran to cuba to venezuela? any of these connections? are you aware of any of that? >> yes. we spent a lot of time obviously working closely with the intelligence community that does the real tracking to try to identify north korean financial networks wherever they might be, whether it's with rejeeps such as iran or institutions such as iran. to be honest with you, i think when it comes to trying to apply financial pressure on north korea, we shouldn't take our eye off the ball and the ball is asia. that's where north korea gets its primarily access to the international financial system. that's, as we devise strategies to try to put pressure on north korea. >> they're spending some of that money in this hem i sphere.

they purchased weapons from cuba. >> and we responded -- >> i don't castro just gave them the weapons. >> right. and that's -- again that's why we look at the primary arms dealing we targeted. we're trying to go after the arm dealsers trying to go after the financial networks that support the arms dealers. so what we are trying to do is make it more different, if not impossible, but certainly to disrupt and dismantle their ability to move these function around the world and ultimately repatriate and use those funds. that involves bush but i think more importantly it's where the financial notes are that allowed them to ultimately use those funds. >> i'm going to re-claim my time, because i think you're aware of it --

>> the gentleman's time has expired. thank you, mr. duncan. mr. lowen thal is recognized. >> i think to ambassador kim, you've already indicated that we're beginning to see indications that china too has grown weary of north korean aggression. i think you have answered that. i would like to know, there anything else you can add to the evolving relationship, and pyongyang pyongyang, and specifically also what i'm interested in, as we go forward, how is the united states engaging people's republic of china in our common interests in a more stable korea? what specifically are we doing as we go forward? >> thank you very much

congressman. i think in terms of evolving relations between beijing and pyongyang pyongyang, to me it's clear that chinese are thinking much more seriously about the north korean policy, and beginning to realize when north korea misbehaves it hurts china's own interest china's own interests are harmed when they misbehave. i think that affects the chinese a, and affects their cooperation with us. one obvious example is if you look at the interaction between the leadership of china, south korea, north korea, xi jinping and park have had communal indications.

and a number of interactions as well. zero sbhr action between xi jinping and kim jong-un. i think that says quite a bit about their relations. i think we want to continue to work about china so they work more effective, cooperate better with us. in terms of preventing north korea from taking provocative actions, and also in terms of working towards a credible return to negotiations. we haven't given up on negotiation. we do want to try to resolved the nuclear issue, and i think the chinese have a clear stake in that. for one thing they chaired the six-party process. so this is a prominent topic at all levels. and this is an effort that we

will continue to take seriously. >> thank you. my next question is to the general. you've indicated that you're fairly satisfied that it really was the north koreans in terms of the sony cyberattack even though you're not able to discuss with us some of the potential classified information. recently fbi director in responding to some of the same issues, has urged the intelligence community to declassify more details of the evidence to counter some of these skeptics. can any of you -- can you specifically talk to us about the status of declassification and what those discussions are? and will we be able to see some of this information? >> thank you very much for the question, sir. regarding that particular effort, i am not part of that classification, but overall our position has always been

information sharing requires as declassification as much as possibility. we believe it's important to share information as cryos whole community as possible. we are very much in favor of the director's efforts. >> is there a potential fear on the part of the chinese or others that there could be a collapse in the north korean government? >> i think we think about, prepare for all contingencies. i don't think any of us have a magic insight as to what might happen to the north korean government any time soon. but we kin to coordinate so we are effectively prepared for

whatever happens. >> anyone else wishes to -- general? >> the gentleman's time has expired. >> i yield back. >> we're so pleased to recognize mr. ribble, a new member of our committee. >> thank you. you guys have been patient. thanks for being here. mr. glasseser how large is north korea's -- >> i'm sorry i don't have the exact number. relatively small. >> mr. kim, do you know it by any chance? >> no, i don't. >> okay. reports would tell us it's somewhere in the range of 13 to 20 billion somewhere in that, does that sound reasonable to you? i want to go back to the line of questioning, given that about 25% of their gdp is agriculture. it's really relatively small.

sony pictures's annual revenues is $8 billion. >> so if you remove the amount for agriculture sony's revenue is about the same size as their gdp. this goes back to the money. ultimate ultimately if you can follow the money you can get some sense of what their capabilities actually are. i'm curious again, on the money, where it's coming from. could you talk to us a bit about the use of forced labor in north korea? is that part of where at least the workforce is coming from? >> well, as far as their access to hard currency there is a bit of legitimate trade that they engage in with a variety of countries. they also receive a significant amount of support from china, and then of course they engage in a variety of illicit activity

to supplement their income. as you point out, they're a very small country. they really only care about the needs of the top echelons of their echelon of their society, so by engaging in illicit financial activity by engaging in armed sales they can engage in hard currency that keeps things comfortable for the small group of people on top. that is why -- that presents us challenges and opportunities. the challenges are, they don't need broad access. when you are dealing with a country say like iran and you look at the sanctions with iran it was a target-rich environment. and the idea, this is a large economy, we need to shut off broad access. we've already -- as i have had the exchange with chairman royce, that has already been

accomplished with north korea based on actions we've taken in the past and based on the fact that they self-impose isolation on themselves. so the idea is identifying the nodes that you can put your finger on that really have an impact. foreign trade bank, day dong bank sand points from the financial system and how do you work where they get the key points of access namely china to persuade the chinese it is in their interest -- there has been a lot of questions on why would china work with us? china is not going to do us any favors. they will work for us because it is in their interest that north korea not engage in illicit activities because it is in their interest not to affect their banks. we've seen that time and again. that is the challenge and the strategy. it is frustrating because it is difficult but it is something

we're committed to for ten years and something we're committed to continuing. >> it is extraordinary frustrating because the economy is so small it is difficult to get it that is why my question went more on forced labor and human trafficking and the element of revenue that is there because free labor -- could be a large number. and are you aware of the north koreans using in essence, forced labor to do construction or anything? >> sure. north korea is a human rights disaster. and as i've said before, the north korean government bears full responsibility for all of the misery they inflict on their people. i would defer to ambassador kim to get into the details of how -- the precise mechanisms of by which theyo press their -- they oppress their people. >> ambassador king would you

like to add anything? >> i would just add that we know that it is part of the north korean human rights abuse. we don't know how much that contributes to their gdp but the north korean homan rights record is among the worst if not the worst and that is why we need to pay more attention to this issue and i think what happened in the u.n. contacts last year is significant, with the commissioner inquiry findings and the overwhelming passage of the human rights resolutions. >> thank you, madam chair. read back. >> mr. ribl, there has been some good reporting on the use in forestry and other sectors mining. but forestry in particular, the use of chain gangs north korean, what would you call it forced labor to bring hard currency back into the country and the fact those work earps never see any of that money. we now go to miss tulsy gabbert of hawaii. >> thank you very much.

thank you for being here. mr. ambassador it is good to see you again. as you know and is very apparent to all of my constituents, i come from hawaii which is geographically geographically most close to north korea and where people actually monitor and listen when north korea beats its drums and delivers its threats. and when we learn about the nuclear tests and continual increase capabilities by north korea, because it is something that is real for everyday families in hawaii who currently sit within range of north korea's missile program. i think it has been unfortunate that we've seen a disconnect in a lot of different ways. some people within our government others who are so-called experts on north korea who have really been very dismissal on the real threat that exists coming from north korea. so i appreciate that we're

having this hearing to kick off this year because it is a threat that we have to take seriously. my first question goes to ambassador kim and mr. glacer with regards to china. clearly china has expressed that it is in their best interest to continue to have stability and it is good to see that they're interested in working with us to deal with the instability that is caused by north korea's cycle of threats and i'm wondering what specific things what specific targets are you looking for in working with china to deal with north korea? >> thank you very much congresswoman. china obviously values stability on the peninsula, but as you suggest, i think they are beginning to realize that north korea's miss behavior causes

instability in china and that hurts china's interest. we are looking to cooperation with china, one on sanctions enforcement and here we have seen some instances where chinese enforcement has been strengthened considerably. and we want to work with them to make sure the north koreans don't take any provocative action. and over the years we've seen provocative actions and the cyber attack on sony is the latest example but they've had attacks on islands. so we need to prevent them from acting that way. and we need to work with the chinese on how to get back to negotiation on denuclearize is and we need to work with china and other parties in the region to try to get this problem under control and work towards

lasting, verifiable and complete denuclearization of north korea. >> thank you. do you have anything to add? >> just to go back to your question about the types of targets that we look for, and that we work with the chinese on i guess you could think about it this way. that there are -- the north korean s have two primary ways to access the international financial system and including japanese, directly think thur banks or working through front companies or individuals who are disguised -- disguise their true employer or origin. and so we would -- we would want to and we do focus on both. we work with the chinese on both. we try to share information on both with respect to financial institutions. as i've said before we've imposed sanctions on the north korean financial institutions that give it access to the

financial system. including korea cong sung bank which has a branch in china and that is an issue we raise on a regular basis with the chinese. we've seen there has been an impact in the major chinese banks and they have cut these institutions off. and there are smaller banks in china so there is opportunity for them to gain access but for the large commercial banks, we know we've had an impact. and with respect to front companies, that is an ongoing challenge. we try to share information with our chinese counterparts on that to take steps to protect their financial system. sometimes they follow up on that and sometimes we are less successful on persuading them to follow up on that. >> just real quick. i'm running out of time. on hard currency you said they had the impact that was intended. the policy in my view wasn't in place long enough to really the have the impact that it could

have to force major change within north korea so i would like to see how this policy will be pursued again and i'm out of time. >> again, for ten years now, we've been trying to isolate north korea from the international financial system. we've had a lot of success in doing that. as i've said before, the problem is that they don't need broad access. they only need a few points of access to gain -- to get what they need. which again presents challenges and opportunities. the challenges are finding the points of access and the opportunities are when you do find the points of access you could have a major impact. so certainly the goal -- the overall goal is for north korea to act as a responsible member of the international community and we have not achieved that goal. that is an ongoing effort not based on sanctions but about all

of the things ambassador kim talked about. but we're going to continue doing our part of that which is increasing the pressure as much as possible to present as stark a choice on the north korean regime as possible. >> congresswoman, north korea had indicated to the state that they would open negotiations again and that is why the sanctions were lifted. unfortunately it turned out they fibbed and this has been the problem with north korea. we get a little leverage and then they somehow manage to convince us that they are going to turn over a new leaf and the sanctions are lifted and then after the fact, we find out their full bore again developing towards their nuclear weapons programs. and i think the problem at the end of the day having talked to their foreign minister of propaganda who defected into

china, at the oopd of the day is -- at the end of the day the problem is their number one goal is to get the acbm capability for a nuclear weapon and we should recognize that is what is driving them. and cutting off their access to funds to do that is very much in our national interest. let's go to mr. kirk clausen of florida. >> express my appreciation to all three of you for coming here today and also your service to our country is noted and we're very grateful for what you do. let's drill down a little bit on something mentioned earlier if you all don't mind about submarines. the research group 38 north recently reported that north korea may have installed vertical missile launch tubes on a submarine. mr. kim, does the administration concur that north korea has installed missile launch tube

capabilities on this submarine? does the administration believe that north korea is pursuing a sea-based nuclear strike capability? and what would the consequences of that sort of capability be for the region for the security of our allies and for the security of the united states? thank you. >> thank you, congressman. i don't have any offer to specifically confirm the report. but as i said before, we're deeply concerned that north korea is continuing to pursue dangerous capabilities. they are been interested in developing their submarine capabilities so i would not rule anything out. but beyond that, would you be happy to arrange a classified briefing for you in which we can provide a fuller briefing of their capabilities at this moment. >> a appreciate the offer. and i think that would be excellent. and with their growing nuclear capability in the region in

general, what is that -- does that imply for us and our allies not just for us? >> i think it poses a great threat to our allies and to the u.s. directly and this is why we need to intensify our effort on all aspects we talked about this morning, on sanctions, to try our best to cut off funding for them to use on their dangerous programs, to working with our partners and the broader interest of the community to -- to borrow the congressman's words, so they cannot continue their dangerous programs and get out of the international isolation they've been suffering. one of your colleagues mentioned earlier, i believe it was ranking member engel that mentioned the greatest threat the north korean pose is to their own people and i believe that is true.

having visited north korea several times myself i have deep sympathy for the north korean public which has continued to suffer as a result of the leadership's bad decisions. and i think we need to try to work harder so that we're not only dealing with nuclear and missile programs that the north koreans have continued to pursue but to try to improve the situation for the north korean public which has been suffering so badly. >> thank you. bill keating from massachusetts. >> thank you mr. chairman and i would like to thank our witnesses for their patience and for being here. we talked a lot about the international community and how they can affect things. i'm a member also of the cyber security sub-committee and homeland and we realize we have to go further than just our own domestic abilities to influence the situation and we've discussed china a great deal. but let me ask you a question

about russia. russia continues to supply oil to pyongyang and recently there are reports and i think it is for the first time that kim jong-un has favorably acted on an invitation from russia to attend ceremonies in may commemorating the anniversary of world war ii's end and this is one of the first public international visits that he'll do as a supreme leader. if you factor in those issues what is the relationship with russia and north korea and the -- in the opinion of any of the witnesses that would like to comment on that? >> thank you congressman. as you point out, russia has had senior level contact with north korean officials and kim jong-un sent one of his top deputies to moscow. there is some interest of

russian investment into north korea. but i'm convinced the russians do remain committed to our shared goal. if you look at the public statements that came out immediately following the senior north korean's visit to moscow it was all about russia's commitment to the six-party process and the organization and how they would strongly oppose a nuclear test by north korea. so yes, the picture looks mixed but fundamentally the russians do remain committed to the role of denuclearization. >> do you think there is any possibility that north korea did have some assistance in the sony attack or other attacks from experts, not to deny their sole responsibility as the instigator, but into getting expertise they did not have, could that have happened formally or even on the private

side of russia in this area? are there any concerns that might have been a factor? >> thanks for that question sir. frankly, there is -- there is always that possibility. at this point, however i've not seen any intelligence that indicates that. >> thank you. >> and just lastly, because we did spend a great deal of time talking about china. what other asian communities do you feel could be useful in our efforts to deter this type of cyber activities and what other countries could we get assistance from to align together on this cause? >> well thank you sir, for that question. as we've taken a look at it from the department of homeland security and our information sharing, we have several different engagement organizations such as the asian pacific emergency response team which we did in fact share information on. the collection of 21 different

countries. and we used our international watch and warning network membership and should -- shared information out to over a dozen other countries. this really is something that has impact across many, many different countries. and we have leveraged all of our different partnerships across the international community to share information regarding this incident. >> thank you. i yield back mr. chairman. >> thank you, bill. we go now to dave trot of michigan, a new member of this committee. >> i want to thank the chairman and all of you gentlemen for being here and allowing me to ask a few questions this afternoon. first question is to assistant secretary glaser do you think executive 687 is sufficient to accomplish our goals? >> again, congressman our goal is for north korea to act as a responsible remember of the international community so certainly that executive order standing alone is not -- is not

going to get us there. it is about all of the executive orders all of the financial tools we have combined with all of the efforts that sung and the state department are engaged in. and even then, it is an incredibly difficult and frustrating issue. but i don't think a single action or a single executive order will get us there, nor have we asserted that it would. >> do you think our actions and executive orders over the past ten years have moved the ball forward or have we lost ground with respect to what we want to accomplish? >> again, it depends on what you are referring to specifically. i think that we have been quite successful in applying financial and economic pressure on north korea. >> but you think there are fewer human rights atrocityies or paying heed to the u.n. after ten years or not? >> no. as i said, i don't think we've achieved our goal of them acting

responsibly, no. >> so the chairman's bill that passed in last congress with respect to secondary sanctions or do you feel you need more to pursue those sanctions because i think earlier you spoke in -- you said you supported the north korean sanctions enforcement act that the chairman introduced last year would that be a fair statement? >> no. it is not for me to opine on that legislation at this point. what i can say is that with the new executive order, it gives us flexibility that we haven't had before to target the north korean government and target north korean officials and to target those, and this is to your point to provide material support to any designated entity that is not an authority we've had before and an authority we'll put to good use. >> and so if this doesn't work as well as we hope what is plan b.? >> plan b. with respect to sanctions? >> what if north korea doesn't change its bad behavior? what is plan b.? >> well, again, there is a broad policy trying to move north

korea in the right direction, from our perspective we have a strategy that we've been implementing for many, many years now to try to increasingly isolate north korea from the financial sector. and i think that we have a lot of success that we can show. i think it is one way to bring pressure to bear on precisely the people we need to, which is the decision-makers in north korea because they are the ones that benefit from that. but again, the goal is not to bring financial pressure the broad goal is not to bring financial pressure the broad goal is to affect a change in north korean behavior and as you point out, we're not there and it is incredibly frustrating and something we work on every day to try to change. >> thank you. ambassador is there any expedited effort to review the criteria to designate north korea as a state sponsor of terrorism? >> so the criteria is set by law so what we are doing is to evaluate the available intelligence and information to determine whether the north

koreans meet that criteria. >> any idea when that will be done? >> it is an ongoing process but i think as soon as we make the determination that there is credible evidence to support identification we will move forward. >> and say we made an egregious error and somehow concluded they were not responsible for the state responsed terrorism what problems would be created for us? would they stop being as friendly and cooperative as they've been? >> i think it is a fairly straightforward mattner which we are trying to meet -- matter in which we are trying to meet the law, that the secretary of the state has repeatedly provided support for acts of international terrorism and we're trying%jc to determine whether north koreans meet that criteria and when we do we'll move forward. >> any idea when that will be done? >> again it is an ongoing

process. >> and how does south korea view our actions? would they like us to do more? >> they have been very supportive. we have stayed in very close touch with south korea and including japan. they issued a strong condemnation on the attack of sony and expressed strong support to our reactions to the attack. >> thank you. i yield my time. >> we go to mr. tom emmer, a new member of the committee. >> thank you chairman rice and mr. engel for holding this important hearing. i would like to thank the committee staff for their work and the distinguished panel for providing us with their analysist. ambassador kim david albright, the president of the institute for science and international security has commented that north korean policy of --

president barack obama's administration has been called quote, strategic patience. and recently the president said in response to the hacking the sony hacking that the u.s. would respond, quote, proportionally. can you define that for me and comment, if you will, on this strategic patience reference? >> thank you, congressman. strategic patience i think has been misunderstood as our policy. it is not. it was just a description of the approach we were taking about resumption of negotiation precisely because of the important lessons we have learned from our previous efforts in negotiating with the north koreans in the six-party process and earlier in the

framework of the mid 1990s. we were -- we want to make sure to take a very deliberate, cautious approach in coordination with our partners so that if and when negotiations resume, we would have a much better chance much more credible chance of actually making some lasting progress on the nuclear issue. so strategic patience referred to that approach. it was not necessarily our policy per se. i mean -- i think that is where we are still which is to say that we want to make sure that there is adequate preparation and there is demonstration of commitment from the north koreans to denuclearization before we return to negotiations. >> mr. ambassador, if i can then take you to the next part of my question. and i understand that the proportional response language was in response to the sony

episode. but is the administration now signaling an increase in intensity? >> i think that would be accurate. as secretary glase pointed out, the new executive order signed by the president gives us flexibility and broad authority to to go after targets and we will designate more north korean entities and personnel and this will make it difficult for them to introduce their programs. >> there are so many questions and you have been patient for all of the people that are here and this is a process for me and i know the time is limited. so if you could give me this. mr. engel talked about the balance of holding the north korean leaders accountable and at the same time being mindful of the oppressed population.

can you tell me -- and maybe this is a combination of the ambassador kim and the assistant secretary glaser, but how are you doing that, managing that delicate balance and can you give us a specific example of how the supposed expanded authorities under the recent executive order are being applied? >> well again, i fail to see how any actions that we've taken through our financial sanctions or other financial measures we've applied to north korea has negatively impacted the korean people as i've said again, this is entirely of the decisions of the government of north korea. why we would adopt the approach that wife adopted is for a couple of different reasons.

one is that in order for -- in order for the government of north korea to maintain itself, it needs access to hard currency, it needs access to the international financial system, not a lot. but it does need it. so this is -- so when you identify -- >> i got it and the time is running out. so could you give me a specific example of how you are doing that since the executive order? >> well simultaneous with the executive order, it would announce that we employ the executive order with respect to three north korean entities and ten north korean individuals importantly with respect to those ten individuals, eight of them were employed of komed which is the arms company of north korea. one of the impacts of that, at least as its been reported in the press, is two of the individuals, that the government of [ inaudible ] is considering expelling two of the individuals. now this is an important source

of hard currency. conventional armed sales in africa. i'm not doing a victory lap about this but it is an example -- one example and it is going to be an ongoing effort of how we can and will continue to use that authority. >> thank you very much. >> mr. issa of california. >> thank you, mr. chairman. gentlemen, a couple of questions. you're familiar in the federal national authorization act late last year that it applies now in anyone in he is pee on auj and [ inaudible ]. >> that is correct. >> and north korea has no independent access to the internet. >> that is correct. >> so they are relying on a single strand of ip that comes

from china? >> that is correct. >> and do you know the bandwidth of that? >> i don't know. we can get that you. >> for argument's sake let's say it is what the home with comcast. so as though they were being provided by comcast here in the district of columbia, they have one line coming in from china, is that correct? >> in essence, sir, that is correct. >> so two questions. first of all do you have high confidence today that north korea participated in the sony espionage or any in the last year. >> based on the evidence provided by the intelligence community and the law enforcement community regarding at ribusion i have -- attribution, i have confidence

in their conclusion. >> pursuant to the ndaa you have sanctions on that. beyond financial. sanctions are a broader term. >> agreed. >> however, the ndaa said provide sanctions against anyone supporting oren gaging wouldn't it inheritently saying the only way they had to do this was by a route provided by the people's republic of china -- i'm sorry, main land china, china itself, has in fact supported espionage, reasonable assertion by the american people. couldn't have done it without china, china gives them the life line and china monitors all of its internet transactions and it doesn't have a true open internet per se, china had to know what you know isn't that correct? >> at this point, sir -- and thank you for that question -- i

do not know what china knew at the time. >> do they know now? have we directed to them the knowledge that we have sufficient so they know that in fact their lifeline to the internet was in fact engaged in espionage, supporting industrial espionage by north korea? >> sir, we have shared our information from the chinese computer response team and had telephone conversations with them as well and we continue to exchange information regarding this incident. >> so based on that, my question, which goes to the very heart of not the sanctions on a country that is so isolated that the only thing we know for sure is that their people are six inches shorter than people in the south. in fact, since sanctions on north korea are extreme and have not worked because they simply do not care enough about their people to relieve their suffering and since the people -- the government of china now knows that their

lifeline was used to conduct industrial espionage are we and will we hold china responsible to be an active participant in preventing this in the future and should we consider under the ndaa china would then, by supporting espionage by not taking action, be in in fact held accountable. >> we don't have a china desk person, but mr. glaser, you are close enough. do we agree that anyone provides direct support and the internet is direct support that they have to be part of the solution or part of the problem? >> thank you, congressman. i wouldn't want to opine under the statute but i could say that at least from a treasury department perspective, we are

fully committed to holding entities within china responsible and we've designated we're willing to target entities in china. >> the government of china providing a line to the government of korea that has been used in industrial espionage? >> again, congressman i don't think i'm familiar enough with the details on that particular line of questioning. all i can say that we have demonstrated with respect to the authorities we have, we are prepared to use them with respect to parties that need to be held accountable. >> thank you, mr. chairman. >> it is a very good point and one that in dialogue with beijing, i think there issa should be explored because you are right. that line obviously has been used. and i think the other consideration is the fact that some of those involved in the hacking in the past maybe not currently, but in the past had training in beijing as some have

training in moscow. and so i think reminding mr. glaser of the necessity of discussing this with those that might enable that activity is something to raise. go ahead you have the floor. >> i was just befuddled that the general who now has authority over cyber security in the last days of last year, we transferred principal authority to homeland security, so the general is here, he can provide mr. glaser with the questions and answers as to whether or not china had a government line to north korea and perpetrated this and three, the real question is if that lifeline remains in effect and another attack occurs, or is occurring as we speak, how do we deal with china? obviously it is beyond the stoep of this hearing. but i think it is an important

one, will china be part of the solution actively or are we to continue basically dealing with sank shups over a country -- sanctions over a country that is immune to sanctions because they are immune to outside hard currency except when they sell conventional weapons and or nuclear secrets and use that to gain hard currency. that is where the challenge of how do we get china as an open partner and that is why i had the line of questioning. i thank you for your indulgence mr. chairman. >> thank you. we go to mr. ted yo-ho. >> thank you. i appreciate you being here. back to 1994, what was the intent of the nublgt talks -- new clear talks and wasn't it to get into energy talks with north korea? >> the same purpose that we are pursuing now is to denuclearization. >> so they entered into the

north korea agreed framework with the united states. that broke down and they started -- they kept building nuclear capabilities. at what point were there triggers or signs that we knew they weren't staying true to their admission to get away from nuclear proliferation or getting into nuclear proliferation and getting away from energy production? what were those signs? >> well we had credible evidence intelligence, that north koreans were continuing to pursue nuclear programs despite entering into the agreed framework arrangement with us. >> i'm asking you these questions because we didn't respond in a timely manner and i want to know what parallels there are between north korea and where we are with iran right now in the nuclear -- so we don't make the same mistakes. do you see any that we need to pay attention to more closely to make sure we don't make that same mistake with iran? >> i'm not in a position to

comment specifically on our ongoing efforts with iran. but i will note in the north korean context, as we discussed earlier with the chairman, we've learned very important lessons from our previous efforts, both the agreed framework and the six-party process and this is causing us to move much more deliberate and cautiously toward any resumption of any negotiations because we want to make sure that when we resume negotiations that we'll actually achieve lasting progress and not repeat the mistakes -- >> that is exactly what we have to do and we need to learn from the past so we don't make those mistakes with iran. general. touhill, what is your opinion on what we've learned from north korea and where we're at with iran? >> well, thank you for the question, sir. frankly that is out of the scope of my expertise. >> okay, i'll come back to that. i have other questions here. one of these goes along the line

of what mr. issa was saying, i can't imagine north korea being able to act alone in this. and i don't know if it is right to say, but i would see china acting as the puppeteer or north korea being the puppet or the stooge being directed by china, do you feel the same way in this? >> you know, at this point -- thank you very much for that question as well, sir. that point i don't have any indication or any information that would indicate anybody but those that have been attributed by -- >> let me ask mr. glazyer. what do you feel on that? >> i don't have any information on the ongoing investigation but i can say that while china and north korea are allies, i don't think it is correct to say that everything north korea does it does with chinese instruction or even blessing. >> but knowing their limited ability on the internet they have to be working with somebody i would think. how about you ambassador kim?

>> i think that is a very important question. and that is a question that interagency, including our intelligence commuty should be looking closely to determine whether the requirements of ndaa sanctions are met by virtue of the fact that the north koreans used an ip located in china. but i agree with danny that there is no indication that the chinese government or chinese authorities knew about the attack or in any way con doped the a -- condoned at tack on sony. >> all right. one last point and this is off of my colleague mr. connelly he was talking about what constitutes a cyber attack and at what point do we deem it an act of war? how many people need to die or how much damage needs to happen to a country. these need to be answer sod there is a clear definition of what an act of war is. right now i see there is a gray

area and no one is willing to commit. i think it would behoove our government if we drew some lines and say if you cross this line, this is considered an act of war. what is your thoughts on that, general? >> thank you for that question. frankly, sir that has been debated in the war colleges for many years. and as a graduate of the war college, i believe that we should have that dialogue and we should -- >> i don't think we need any more debated, i think we need to define it because the day is coming. how about you, mr. glazyer? >> i'm sorry, what constitutes an act of war is out of my expertise. >> i'm out of time so i'll have to have you submit those to the record. thank you, mr. chairman. >> thank you. thank you mr. yoho and let me go to ileana ross latenan, chairman

amerrittous for this. >> thank you. following up on the north korea-cuba nexus in 2014 north korea attempted to ship from cuba a concealed shipment of, quote, various components of surface to air missile systems and launchers, mig 21 jet fighters parts and engines, shell casings, rocket propelled projectiled ed projectiles, end quote. and we did penalize the north koreans, thank you mr. glazer but not the enablers the cuban regime. why not sanction cuba for aiding and abetting the north koreans. now this shipment of military hardware, i just read a little snippet of parts of what it entailed were traveling from cuba to north korea in containers filled with sugar,

quickly melting sugar. officials stopped it at the canal and the north korean captain attempted to commit suicide. he didn't try to commit suicide because he feared u.n. sanctions or he feared u.s. sanctions. he feared the revenge of kim jong-un. now i want to know why we don't sanction cuba for aiding and abetting the north koreans and why didn't we work with the u.n. so the u.n. could impose their sanctions. you correctly point out ambassador kim that sanctions are important. this is what the u.n. response was. this is the security council committee for -- four-page strongly worded memu. that is what cuba got. it said the concealed arms and illicit cargo to conclude the hazardous cargo was not declared on the ship's manny fest and the

cargo was hidden under 218,000 bags of raw sugar. but, boy, they got really tough. they said the committee encourages all member states to remain vigilant regarding their obligations and responsibility to inspect suspect cargo to prevent prohibited items going to and from the d.p.r.k. and to ensure the implementing instruments -- blah blah blah blah. in regard, the committee draws the attention of member states as security resolution -- oh, my golly. this is all that happened. when they were shipping migs and everything else under melting sugar. and you talk about the sanctions and how important they are. yet, treasury department looked the other way. it was like that ship just came magically from cuba, phantom ship violated all kinds of sanctions of the u.s. and the united nations and there was no penalty to pay. so we wonder why north korea

does what it is doing and why it is in cahoots with other rogue nations. so i encourage you to be a little tougher it. takes two to tango. north korea was not shipping these on their own. and lastly mr. chairman and i know i'm out of time. but on wipo, i've been concerned about this and with former ranking member howard berman, we asked for an investigation on the transfer of u.s. origin technology by the u.n.'s world intellectual property organization wipo to iran and it was clear this administration did nothing from preventing wipo from transferring sensitive dual use technology to north korea and has not taken the tlets of technology transfer seriously, incredibly after wipo directy gem francis gurry knowingly withheld the organization's transations with north korea in 2012 in violation of u.s.

security council resolution wipo again ran a controversial mission to north korea last june and has been less than forthcoming with details about that mission, yet not only was gurry not held accountable, he was once again reappointed in may 2014 as director general of wipo with little resistance from the obama administration. we just look the other way. what are we going to do to prevent u.s. technology and u.s. taxpayer dollars from being transferred in the future when we have that kind of an attitude? we don't have much time, but i just -- you don't need to answer. but just sanctions are important, we need to implement them. a strongly worded memo from either the treasury or the u.n. is not going to do the trick. it won't stop anybody. thank you mr. chairman. >> thank you. in adjourning let me thank our

witnesses but also say that mr. engel and myself look forward to working with state and treasury we're going to bring this legislation up again that we passed in the senate last year and we're going to try to move it quickly. so we'll be meeting with all of you and i think that, frankly, a lot of these actions against north korea have been very long in coming. and for those of us that have urged a more robust response, we want to make certain the tools are there to do it and do it effectively and cut off the hard currency for the regime. we'll be in contact with you. thank you very much for your testimony. >> thank you mr. chairman.

as we leave this hearing over on the house floor, members are considering several key satellite items -- legislative items including a bill that would consider the transactions under the dod frank law to divest themselves of loan obligations or clo's. the house is scheduled to consider a bill setting homeland security budget for the year and

they would consider amendments that would reverse president obama's action on immigration. you can watch live coverage on our companion network cspan. the senate also today considering the legislation of a bill authorizing the keystone xl pipeline that the house passed a similar measure and if no agreement would be reached a vote will occur around midnight. can you watch that on our concurring network cspan 2. coming up at 1:00 we're planning to take you live for more from the heritage foundation conservative policy summit with discussions on digital trade, marriage and religious predom and the pro-life opinion. one of the speaker this is morning was senator rand paul. here are his remarks.

>> thank you. thank you. thanks, jim, i think you're doing a great job and heritage continues to grow. online we have, 20,000 to 25000 people watching on line and i asked jim laughingly if this was off the record could i say anything i want. and i said could i just be frank and he said nobody will be in there from the media. and so here goes. and everybody will have a lot of speeches and i would like to make it interactive so we're going to poll the crowd. media and cameramen, you could participate. who in the crowd thinks that judicial restraint is a great philosophy versus judicial activism. who in the crowd thinks your legal philosophy would be judicial restraint? >> this is going to be a tough sell. how many people think judicial activism is the way to do and that is what we should have is an activist corp? >> nobody. this is really going to be a

tough sell. does anybody know why justice roberts did not strike down obama care? judicial restraint. so i guess everybody here is for obama care, right? and thinks that the court should stay the heck out of obama care and obama care was fine because the majority wanted it. in fact that is what justice roberts said. he said we should not get in the way of the majority. do you know where that comes from? that comes from oliver wendall homes, the progressive in the lautner case. he said the court has no business getting in a way -- to what the majority will is. we should leave it up to the majority. so if you are for judicial restraint, i guess then what happens when a legislature does bad things? what happens when legislature says we're going to pass jim crow laws.

should we have an activist court that comes in and overturns that. and could we have the first slide -- the only slide. i won't bore you with slides. where is it going to be. i can't see it so that won't help me. so we have a timeline. we go back and start in 1905 with lockner and go through obama care. and the question is in each of the cases what should conservatives be for, restraint or activism. we go back to lockner and state legislatures were becoming more progressive and restricting the right or the liberty of contract. and so what happened is you had an activist court in the lockner case that rules five to four say states can interfere. so the question is are you for activism or astronautwere restrapt when it comes to the state government interfering with the liberty to contract. and we move on and get into the new deal. here it is not state government

it is the federal government. the federal government is passing all kinds of laws, assuming new powers, that weren't essentially in the constitution. so you once again have an activist court in the beginning until fdr got his way you have an activist conservative court that overturns federal law one after another until a majority of appointees say no, judicial restraint is the way to go. and then you move on longer and as you come out of the depression you go into brown versus the board and we're looking at institutionalized racism or segregation. what is the position of judicial restraint? the position of judicial restraint said let the states do whatever they want. is that the conservative position? i frankly think it is not my position. i think if the states do wrong that we should overturn them. that there is a role for the supreme court to mete out justice. the 14th amendment gives the

federal government a role in saying the states can't do certain things. there is a book called the conscious of the constitution by timothy sanda fer which is a great book because he says if we were to say, gosh we believe in just state's rights and the federal government has no role in the states, could you be basically in favor of what john calhoun said who supported slavery and supported a tyranny of state government. he thought state government could do anything it wants? is that the liberty position? is that the conservative limited government position we believe so much in a small federal government there is no role nationally to say to a state government they can't do anything. and when it comes to brown, i'm not a judicial restraint guy either. i'm a judicial activist when it comes to lockner and the new deal and also a judicial activist when it comes to brown. i think the federal government was right to overturn state governments that were saying that separate but equal is fine.

plussy versus ferguson is a mistake. it is judicial restraint. so we get to brown, i'm an activist. and then we go to the next one. what is the big bugga bear, the next one when we want to know about activism versus restraint. it is grizwald. and you say why are we having this discussion. does this have anything to do with politics or current events? does anybody remember george stephanopoulos's questions in the presidential debate, what do you think about grizwald? people didn't know what grizwald was. but it had to do with birth control. the state government said you can't sell birth control to women. and so if you are a state's rights person, you say i guess hands off. if you believe in judicial restraint, let the states do what they want. that is a straight right. or you might say individuals have rights also and states can't tread upon individual rights. and then you might say well maybe i am for grizwald and for overturning the state law that

says you can't have birth control. and so there is a question again. are you an activist or restraint? and some say grizwald led to rowe so i guess you are for rowe as well. well in rowe you have a competition of rights. you have a competition of rights between a mother and child. so it is different than whether or not you are restricting someone's liberty because there are two individuals involved. the other side would say there is not but i don't think rowe is as clear-cut as restraint or activism. why is this pertinent? because we move up to obama care. and whether he believes it or not, i don't know, but justice roberts said judicial restraint is why the majority can do whatever they want. and not only did he say that, he basically said if there are two arguments and two equal arguments for whether it is constitutional or unconstitutional or tax a pax or penalty, we have to accept that basic lip the presumption is of constitutionality. this kind of gets back to the idea of restraint f. we believe in judicial restraint we

presume the majority is correct, we presume that laws are constitutional until we can prove otherwise. there is a school of thought that thinks differently. randy barnett writes about something of this. he talks about the presumption of liberty that maybe we should start out with the presumption of liberty. i liken it to sort of saying, maybe we should be presumed innocent until found guilty and maybe we should be presumed to be free until we are restricted. [ applause ] >> yes i've got one convert. yes! my point is not to try to convert you from judicial restraint to judicial activism but to think about it. because it is not as simple as we make it sound. we don't want judges writing laws. i don't want judges writing laws either but do i want judges to protect my freedom but do i want judges to take an activist role in defensive liberty and do i want them to presume liberty and put the burden on the government to prove constitutionality. i think this is important and it

became very important in the case with regard to obama care. in that basically justice roberts says that it is not his role to replace the majority will. now some of you might say well i'm still for judicial restraint, i don't care about any of those cases, we need a better majority. that is an argument. but the question has to come also if you don't have a better majority. if you have a jim crowe majority in the south, does the court have a role in overturning something where a person's individual rights are at stake. i think they do. i think it is an important debate because ultimately ideas are important. i think it was victor hugo that said that ideas are sometimes really more important than strong armies and ideas are the presupposition behind all of this, that precede all of this and really empower all of us. i think as we look forward to what kind of government we want or what kind of role we think government has what kind of role the judiciary has, it is important to decide and to

examine ourselves whether for restraint or activism with regard to the court. another constitutional question we have is on the separation of powers. and i think this is an equally important question. it is a legislative question and a judicial question as well. there is a professor from tufts who wrote recently and said there is an equilibrium between the different powers or branches but we're having a collapse of the separation of powers and a collapse of the equilibrium. our founding fathers talked about there being an ambition that we would pit one ambition against another an ambition against the legislature should be pitted against the ambition of the presidency. the hope was and many times in history this ambition was beyond party label. unfortunately now i think things are so partisan if it is a democrat president all

democrats will support them. but if it is a republican usurping power the republicans will support him. but what our founding fathers thought was it was the positions would be pitted back and forth and the ambitions would push us forward to more of an equilibrium. it doesn't just on immigration that the president usurped and created and brought upon the executive branch power that is not there. it is also in obama care amending the rules. we'll have another ruling on the supreme court on that coming up. but it is also on the power of war. the power to declare was without question given to the legislature. we have been at war now for five months. and no vote in congress. so before christmas, i decided i would declare war and i decided i would declare war on a water bill and people are, like why is he declaring war on a water bill. i said it my only avenue for having any power around here. i'm not chairman of the

committee. i don't get to decide the agenda. they have been working on this water bill for six years. as jim will attest to, sometimes they get annoyed if you amend something they're trying to do. i amended it with a declaration for war for isis. i think they're a threat. i think they're a threat to our embassy in baghdad. they're a threat to our consulate in erbil and apparent they're a threat to americans by killing americans. and there should be a debate. the president shouldn't do this alone. these debates have to go on. to me, i think what is more important than belonging to one political party or another is the ideas of the constitution and how the whole goal of the constitution was in limiting power and not letting too much power gravitate to one body or one person. while i'm here in washington in the future as long as i'm here that will be my overriding goal to try to limit power and try to

keep too much power from gravitating to one person or body and i think this is above and beyond all partisan politics and i will continue as long as i'm give than privilege. thank you very much. and i would ask if i converted you from restraint to activism, but i'm afraid to. >> we both have microphones here. are they both on? we'll take some questions. yes, sir. >> my question is very simple. why -- i ask this question

these people are crazy we don't have -- if you want to know so my question is very simple, how smart it is for you to think -- they are crazy. what do americans have to gain by picking up the fight. >> good question. the way i would look at it is i say this often because i think it bears repeating, i think there say long war going on. the long war in some ways is sunni versus shia but it is also within the islamic faith there is a war going on between what i call civilized islam and barbaric islam. and some conservatives like to criticize the president and say why is he being so nice to

islam? i think sometimes what he's trying to do is point out that there is a difference. if you want to paint with a broad brush that everybody in islam is an enemy of the united states, you're talking about a horrific terrible kind of war with, you know, a billion people hating america. i don't think that's true. i think that the vast majority of islam is peace loving and civilized. but if it is 5% or 10% of islam, that's a lot of people and a big problem. the long war is not only sunni versus shia but a long war between a barbaric form of islam islam. i think no matter what we do we have to defend ourselves printing cartoons shouldn't engender people murdering you. we have to defend ourselves. france has to defend themselves we have to defend ourselves. we have to defend our diplomatic missions around the world. i put a lot of blame at the feet of hillary clinton for not defending the embassy or the

consulate in benghazi. i think she did a terrible job. and i think it is ip excusablee inexcusable basically, when you ask for security you not provide it. the same goes for erbil or baghdad. while i don't want to be in the middle of the long war because i don't think there really is an answer in this long war and that some -- much of this war should be left to be fought by the middle east, at the same time we can't leave our embassies unprotected. we have a couple of choices. come home completely and bring everything home or we defend our embassies and our interests. i think at this point what i would say is we defend our interests. but that doesn't mean we have to be involved in every war and skirmish. if there is any one true thing i think is irrefutable and that the facts really support is that every time we have gotten involved to topple a secular dictator, it has been replaced with chaos and the rise of

radical islam. that would be in hillary's war in libya, this would also be in the republican war in iraq. i think what is over there now is less stable than before. and so i think there are more problems with the rise of iran as a problem because there is no counterbalance in iraq anymore. and so some of these problems are insolvable, the only thing that i think we have to know from our perspective is we should defend our country and our people. >> senator paul makes an important distinction as something we have looked at a lot at heritage. there is political islam. welling itself with the powers of government, perverting the basic religion itself and there is a civilized, more, i guess, religious islam and making that distinction is very important, i think, in solving the problem itself. some other questions for senator paul. yes, sir. >> while i agree with your definition -- but to your point

about separation of powers and intention of the founding fathers, how do we get that into a pop culture or every man definition we can understand because it does transcend partisanism. you bring the topic up and get under the labels and what that means, i think it would easily transcend politics. some people don't understand that and we fall into the democrats are nice, republicans -- how do we get into -- >> i think unelected bureaucrats shouldn't write laws. who are the unelected bureaucrats working for? it is a separation of powers issue. all of the bureaucracy of government works for the president. and so we have abdicated our role as congress. people say well, obama care was 2,000 pages, that's so long. that's long. but the regulations are 20,000 pages. so much of it is being done without our knowledge, but without us doing what we need to do. there is this debate over

defunding the immigration, executive order. i'm all for that. however, i'm for that and about a thousand other things on every bill. i want a thousand instructions, or thousands of instructions on every appropriation bill and people say well, you're trying to tie the hands of the president. that's our job. i don't care if it is a republican president. the power of the purse, when people talk about the power of the purse those are instructions. we have been writing outlines of bills, sending them to the president, and no matter which part, they do whatever they want. as a consequence thisey do many things we didn't intend. i think regulations that are written that are very expensive, like over $100 million, ought to come back. jim was the lead sponsor of something called the rains act when he was in the senate. i have it now. it says that any regulation written by a bureaucrat, written by another branch of government that is very very expensive has to come back and be voted on to become law by the congress. that would go along way toward reasserting our authority and reasserting the balance of

powers. other questions. yes, sir. >> senator paul i thought that you're a -- your father is one of the big founders of the libertarian party and that one of the main thrusts was you're against regulations. i'm glad you're slowing down this president by the regulations, but are you for regulations in a constitutional way rather than you know just more red tape? i thought that was what most -- >> i'll give you an example of that. we passed a law that the clean water act that says that no one can discharge pollutants into aa navigable stream. i would support. i am for that regulation, a federal government regulation. however, that was passed in the 1970s.

it says discharging pollutant into a navigable stream, over time they have defined dirt as a pollutant and your backyard as a stream. and we now spend $100 million policing private property and i think we do so much to harass private property owners that we forgot about the stuff we're supposed to be doing the ohio river and the great lakes and the oceans. so there is a role for government in communal property, but we have gone way too far in what we have done to individuals. one quick example ken lucas put clean dirt on his own land to raise the elevation to sell lots in southern mississippi. he's been imprisoned for ten years. he was 70 when he went to jail. he's now 79 and still in prison for putting clean dirt on his own land. that is a crime and whoever put him in jail is the one who really ought to be in jail. >> one more question, then we better call. >> senator, i was just -- americans for limited government and they were making a