be asking the goernment to cohere as much as possible on also who are the players on the government side of the conflict. thenn the question of civil society i think was important to bring up the women and chilren. i think the reason i haven't emphasized too much is i don't think this is something that the international committee should take on and make demands. it is something where we hould be very actely building up the capacity of afghan civil society to articulate what kind of afghanistan people want to live in. and building up the capacity to put pressure on the partes, put pressure on the government, the pressure on the taliban about women's rights, human rights, children's rights. and i think from my own testimony -- my past expense, the days in boston where we were pushing very hard for returns, and there was such a strong

constituency among the bosnians who were insisting on those returns happening. we could come behind them and support them. so i think there must be a role for us to help galvanize both society and an articulate their position. and, finally, on pakistan and some of the regional questions. yes, i think more pressure would probably be needed. at the moment pakistan -- pakistan's situation is one that will probably not be very -- it will be hard to put the pressure on because i think that such a sense of fragility in pakistan itself. but i do think that pakistan is starting to see the stable afghanistan is, in fact, in its interest. and i think that there's some potential there to also have, start having bilateral talks with india about afghanistan, separate from some of the other issues like kashmir.

so i think is probably scope for engaging pakistan, maybe not talking so much about pressure on afghanistan. >> okay. i see we don't have anymore questions, and we are running out of time. i have one or two last comments, or questions. just to throw out there, but i think for me, my perspective, the militia issue is just a very good example of i think the contradiction between what we currently have -- or the lack of a political strategy and a military strategy. there can be some short-term stabilization gained at a very local level, possibly with some of these initiatives. at its very striking to me in 2002-2003, when i get a lot of research, the very number one demand was disarmament. it very hard to find any example in recent afghan history of where in certain weapons at the local level our creating

militias. so just to me, i think that's a critical issue that we might be getting some short-term gains from that but i think we have to be moving more towards looking at political processes and politically negotiated settlements. i think more weapons, the more it will complicate the more strategic level objective i think moving towards a politically negotiated settlement. the other interesting thing that came out is a discussion, the real need for the u.s. to i think clearly articulate what its position is. there's a lot of questions about this. again, hamish mentioned, when you're in afghanistan, the theories of what do we want to be there. the very senior level afghans, cabinet level afghans will tell you believing that we are really there, we are there backing the taliban, arming the taliban because we need them there to

justify this long-term because we really want long-term basis there or to steal their resources. or whatever the reasons are. but this lack of clarity on what our clinical objective is and what our position is regarding the negotiated settlement think is very damaging right now. but that does create tension why think the u.s. needs to articulate the position, but what the u.s. may find right now is this has to be afghan lead and led by the afghan government. again, we've heard from many the afghan government is the number one problems of fueling the insurgency. they are a party to the conflict. so are they actually the right body to believe the process? i think just a real tough issue there that needs to be dealt with, but also get a urgency for the u.s. i think to clarify what its position is. i think the issue of the withdrawal of troops, we didn't

talk about that too much, but it is certainly one of the key demands of the taliban. and yet there's a tension there where lisbon in the context of the transition, the transition of the afghan national securities lead, but didn't immediately clify that there'll be long-term strategic partnership agreements. we'll be hearing about that more in the next few weeks i think about longer-term commitmen. nato secretary-general also talk about longer-term commitment and you know a bit of ambiguity about 2014, exactly how matrix do stay behind. it seems to be clear there is a brand for troops to stay behind, not least of all the afghan, the afghanistan national security, there is no air force. it would be an importantly important role. i think the issue i think is going to be interesting in how that isresolved, demand for

withdrawal of troops and get increasing signals that we don't plan to withdraw. and then lastly i think the issue of the afghan national security forces, which a real push in terms of numbers now, and yet it seems pretty clear from the current fiscal and five in this town that the sustainability assumption seems to be a bit of a stretch. we had good meetings i kabul with t general caldwell and his team are doing excellent work but they're also very explicit that the systemic cost cost of the nsf are about $8 billion a year. and where is that going to come from? so are we creating these institutions that are completely unrealistic in this context? and given the context as a troops withdraw, the appetite for funding these things is going to also decrease. we're seeing that in the right.

for everyone american troop could pay for -- the fact of the matter is the american congress is much better to pay for one amican troop. but also just the amount of resources that is invested into building the afghan national see kitty forces relative to civilian institutions. and again, this problem that you don't need to look too far in the region to see what did he stabilizing consequences, and so question i think is also the umbrella of isaf starts to move away, how will the afghan national army in particular be perceived? we know the afghan national police is not too terribly will proceed. it has been so closely linked to isaf that i wonder will e

perception of the ethnic imlance really come to the floor, and could the exit strategy which were hinging quite a bit on actually potentially become a decisive force if it ethically or in terms of military imbalance. so again just to highlight some other topics and some of the points that were touched on, but i would just like to conclude by thanking again the panelists for really a rich rich presentation. survey on what i think s i think the most important issue confrontg the u.s. afghanistan into day. .. >> now more on afghanistan with secretary of state hillary clinton. she urged taliban forces in

afghanistan to sever ties with al qaeda and become part of the political process she also announced the appointment of retired investor marc grossman to beat special representative for afghanistan and pakistan, replacing the late richard holbrooke. the asia society in new york hosted this hour-long event. -- for understanding the culture of the region. first, let me welcome everyone

on behalf of the board of trustees and staff to this very special program, with the honorable hillary rodham clinton, secretary of state, to celebrate the legacy of ambassador richard holbrooke. let me add to that welcome a small group in san francisco, who is live, broadcast from here, and as you might not be surprised to know, richard holbrooke was one of the great advocates of the digital age and moving this organization into the modern era. i cannot be more pleased to have my colleagues in san francisco today live along with the many thousands of others on a webcast. much has been written about this giant public figure, richard holbrooke. today, i would like to focus on his extraordinary contributions briefly to the asia society, an institution that he loved very deeply for more than four decades. richard holbrooke was first

spotted as a young man with roh promised by our founder, john d. rockefeller iii. mr. rockefeller invited this young diplomat to participate in our annual williamsburg policy dialogue in 1972 and stayed in touch with them through the late 1970's when richard holbrooke served as assistant secretary of state for east asia with president carter and was heavily involved in the normalization of relations between china and the united states. we lost richard to europe and to global affairs in the 1990's, but he came back to his early love for the asia society would he became chairman of our organization in 2002 and remained our leader in that position until january 2009. when he entered into government service this time, as special representative for afghanistan and pakistan, to say that richard holbrooke was the

dynamic or strong-willed chair is an understatement. from the very beginning, richard threw himself into the workings of this institution, first with nick platt and then with others. he pushed us to become more media savvy. he constantly brought new thought leaders and supporters into our orbit. some of you in the audience today have felt the holbrooke pressure to join the asia society, and we thank you for your support. during richard's time as chairman of the board, the asia society became a stronger institution with a number of significant new initiatives. we inaugurated two new centers, one in mumbai, and one in seoul. we celebrated our 50th anniversary with richard urging us to protect our global presence. this included getting a live connection with the chief executive officer in hong kong

that night in the middle of our gala dinner at the waldorf. this center of u.s.-china relations is thriving. richard was a force of nature and sometimes that force seemed to powerful for others to withstand. but in the end, it was clear, he had the very best interest of our institution at heart. when richard's stepped down from the chairmanship in january 2009 to take on the most challenging assignment of his career, he had already been focused on the issues surrounding afghanistan and pakistan. he urged us to develop programs on the region and convinced our trustee to help support them. he also urged us to look out for the next generation of leaders

and policy around the world to bring them into the asia society's fault. i am pleased to tell you that as part of our the parting gift to richard, we established the richard c. holbrooke fellowship to be awarded to promising young leaders in asia and the united states. in fact, we were working on having the first group of fellows meet richard sometime this spring. we will continue to add to the hulbert fellowship fund through contributions we have received in his honor. when richard steps down, he said, "the just society will always be an important part of my life. we know that richard's contributions to this institution will be invaluable to its future ongoing life. finally, richard came to san francisco often where i live and the co-chair for the center in

san francisco, and every time richard kane, we left with new assets in san francisco. one trip within the space of six hours, we ended up with george shultz's our honorary chair and dick blogger as an adviser. those trips are memorable, and he's still very much a part of our san francisco mission. he and i came to know each other well as partners on the search committee that asked a member to become the president of the asia society in 2004. hard to move be -- hard to believe it was 2004. time has flown. we had many agreements over the years, but on this issue, we were 100% on the same page. they became partners in the leadership of the society. they were a special team. i will never forget the evening of the 50th anniversary, which i mentioned before, celebrated at the waldorf, where is co-host,

and i am sure many of you were there, the entertainer, inspired comic and choreographed one of the most moving evenings the asia society ever celebrated. under passionate and inspired leadership, we have today's asia society, and it is my pleasure to introduce my friend, colleague, and president, meshaka desai. >> thank you, jack, for that generous introduction, which i do not deserve, but i am delighted to be here with all of you. good afternoon and welcome to this very special program with the 67th secretary of state, honorable hillary rodham clinton. to celebrate the legacy of our a powerful antidote -- the leavitt former chair, late

ambassador richard holbrooke, many people have mentioned that the last assignment of richard holbrooke was perhaps the toughest of his life. he accepted this challenge because he was persuaded by his friend, secretary clinton, secretary clinton, you have this effect on people. it is hard to say no to you. because you always appealed to the highest instinct in all of us for serving this nation. and the truth is, serving this nation is what richard holbrooke was all about every day of his life. youe honored to welcome back to this society, madam secretary. last time you spoke here was on february 13, 2009. less than a month after you were sworn in as the 67 secretary of

state of the united states. this is on the eve of your first overseas trip to asia. those of us who are asia were happy regard to asia first. and it was your first major speech on the renewed u.s. commitment to engage with a should hours. right before the program, i definitely and distinctively remember getting a paucolorado m richard. he was on his way to pakistan, his first trip as your special representative to afghanistan and pakistan. imagine his surprise that he did not even know that you would be speaking at the asia society. and it was not because he had twisted your arm. he was very proud of the fact that your office had reached out to us without his crotty, as was always the case before that.

at that point, i knew that we can actually go on without richard be our leader. much has happened since the first speech that you gave here, secretary clinton. ambassador holbrooke is no longer with us, and we feel his loss acutely every day. in your tenure so far in these two years, you have made it very clear that asia is central to the obama administration's foreign policy. we also know that now, as of late january, you're the most travelled secretary of state. we also know that you have traveled to asia eight times in two years. that is more than most secretaries of state. your articulation of smart power as the basis of foreign policy has meant that known traditional issues, such as women's rights, and educational exchanges, in true public-

private partnerships for tackling major global issues have received higher attention than ever before. it is not surprising that in many parts of the world, you are treated like a rock star. most importantly, you have used all the implements in your tool kit to create a dynamic and effective foreign policy for our nation. we have assembled a special group of our patrons and friends of richard. we have a large group of people from all over the world joining us virtually, and i should add that in addition to our san francisco center, we also have colleagues in houston and hong kong listening to this, along with all of you who are on our live webcast. at the asia society, we recognize that a deeper understanding of the issues around the u.s. engagement with afghanistan and pakistan, one of the most complex regions of the world today, requires a strong

public-private partnership. we're very pleased that the asia society to do our part. both ever special exhibitions will focus on the historical dynamism and crosscurrents of the region this spring. it will remind you that, in that is today part of afghanistan was part of the great persian empire before. we have online sources teaching about afghanistan for teachers and students. our policy division will launch a major report entitled " pakistan 2020" with scholars from pakistan as well as the united states. we have worked with your colleagues in the state department on many of these projects, and we are delighted that we can continue to do this with your support. i am pleased to announce that the season of afghanistan and

pakistan this spring will be dedicated to the legacy of ambassador richard holbrooke. i personally am deeply grateful that you so readily agreed to give this memorial lecture in honor of our mutual friend and partner, late ambassador richard holbrooke. we're also thrilled that he will inaugurate the season of afpak programs at the asia society. so ladies and gentlemen, please welcome the 67th secretary of state, the honorable hillary rodham clinton. [applause] >> thank you. thank you. well, it is wonderful to be back here at the asia society, and i for thatshakha deasai

introduction and for her strong leadership. i also want to think jacket all the board members and supporters that are here doing what i think is very important work, continuing to build ties between people across regions and continents and looking for opportunities to find those points of common concern and common cause. it is always a pleasure to be back here. vishakha deasai that it is mostly -- i tell vishakha deasai that it is mostly because of the gift shop that i always come back. [laughter] i gave my first major speech as a secretary of state here, as she said, and i am so pleased to be back here today to really celebrate you and all you do to strengthen relationships and understanding. and i also want to say a special word of greeting and acknowledgment to kathy martin, the wonderful partner in life of

richard holbrooke, and a dear, dear friend and colleague to so many of us who are here. now if there were ever any fear that i might somehow forget about the asia society, that could not happen with richard holbrooke be sure to remind me at every single turn. he never stopped serving as a champion and promoter for this organization that he loved so much. and in the days after we lost richard, i heard so many stories, many of which made me smile in memory of similar experiences that i and others had had with richard along the way. and one story in particular about the mark he left on his organization involves his time as chairman of the society, and he was trying to recruit or word -- or will shell, who was in the

audience, to run the new very exciting tennis center. orville had a really nice life in northern california. [laughter] he was reluctant. now if any of you have ever tried holding out on richard, you know what a losing proposition that turns out to be. and richard would have none of orville's reservations. during one intense recruiting session, richard picked up the phone and ordered a private helicopter to whisk himself and orville of to east hampton to an impromptu meeting with a key donor. now orville, you have to admit it, you're really impressed, and ended up taking the job. that was richard being richer. he had a flair for the dramatic, but it was far more than theatrics. he understood in every cell of

his body that bold action and big ideas can and will change history. after all, he did it himself again and again. and that was how richard approached his final mission in afghanistan and pakistan. he called it his toughest assignment, and certainly, the challenges were almost beyond description. and richard was always the first to enumerate them. but he understood the importance of this mission to our national security and to the future of such a critical region of the world. we have made progress, but the tribal areas along the border between afghanistan and pakistan remain in the epicenter of violent extremism that threatens americans' and peace-loving people everywhere. here in new york, richards' home town, we need it now remember --

a reminder -- we need no reminder of the stake. over 10 years ago, al qaeda launched an attack, planned and root -- prepared in a safe haven of taliban-controlled afghanistan. tragically, it took the lives of thousands of our fellow citizens but also individuals from across the world. since then, al qaeda and its followers have killed innocent people and encourage the killing, whether it was in afghanistan and pakistan, madrid, london, bali, or istanbul. these attacks have served only to steal our resolve. as president obama said at west point, we did not ask for this fight, but we will surely finish it. since that terrible day in 2001, two successive administrations from different points on the

political spectrum have made an enormous commitment of american lives and treasure to pursue the terrorists who attacked us and those who harbor them. and after all that, many americans understandably want to know how we plan to achieve the goals we have set forth. for their part, people in the region, not just in kabul or islamabad, but in beijing, moscow, delhi, and tehran, wonder about america's long-term intentions and objectives. they want to know if we will walk away again, as we did in 1989 after the soviets withdrew from afghanistan. today, i want to answer some of those questions and talk in more detail about a new phase of our diplomatic efforts on afghanistan. i will be clear right at the start about a few key elements.

our adversaries, our goals, and our strategy. first, our adversary. despite heavy losses, the al qaeda terrorists who attacked us on 9/11 and retain it dangerous capabilities. they continue to plot large scale, a catastrophic, international attacks and to support and inspire regional affiliates. united states and our allies remain their principal targets. before 2001, al qaeda was protected in taliban-controlled afghanistan. al qaeda and the taliban, along with various associated groups, still maintain an alliance based largely in the border region between afghanistan and pakistan. and the taliban continue to wage a brutal insurgency against the

government in kabul, in an effort to regain control the country. the taliban and al qaeda are a distinct groups with the street names. but they are both our adversaries, and part of a syndicate of terror that must be broken. after he took office, president obama launched a thorough review of our policy and set out a clear goal to disrupt, dismantle, and defeat al qaeda and prevent it from threatening america and our allies in the future. al qaeda can not be allowed to maintain its safe haven. protected by the taliban, and to continue plotting attacks while the stabilizing in nations that have known far too much war. from the tigris to the indus, the region will never live up

to its full potential until it is free of al qaeda and it screed of violence and hatred. that is an aspiration that should unite every nation. in pursuit of this goal, we're following a strategy with three mutually reenforcing tracks. three surgeons, if you will. a military offensive against al qaeda terrorists and taliban insurgents, as civilian campaign to bolster the government's, economies, and civil societies of afghanistan and pakistan. to undercut the pull of the insurgency. and intensified diplomatic push to bring the afghan conflict to an end and chart a new and more secure future for the region. the first two surges set the table for the success of the third, which aims to support an afghan-led political process to split the weakened taliban off

from al qaeda and reconcile those who will renounce violence and accept the afghan constitution with an increasingly stable afghan government. that would leave al qaeda alone and on the the run. in 2001, after 9/11, i would remind us all, the taliban it shows to defy the international community and protect al qaeda. that was the wrong choice, and they have paid a heavy price. today, the escalate the pressure of our military campaign is sharpening, as similar decision for the taliban. break ties with al qaeda, renounced violence, and abide by the afghan constitution, and you can rejoin afghan society. read his, and you will continue to face the consequences of

being -- refuse, and you'll continue to face the consequences of being tied to al qaeda as an enemy of the international community. they cannot wait us out. they cannot defeat us. and they cannot escape this choice. all three surges are part of the vision for transition in afghanistan that president obama reaffirmed in his dec. policy review and that nato endorsed in lisbon at the most recent summit. ultimately, afghans must take responsibility for their own future, for providing security, for strengthening governance, and for reaching a political solution to the conflict. that transition will be formally launched next month with troop reduction starting in july and continuing based on conditions on the ground. it will be completed by the end

of 2014. as the transition proceeds and afghan leadership strengthens across the country, a process of political reconciliation will become increasingly viable. in turn, successful reconciliation will reduce the threat to the afghan government, making transition more sustainable. crucially, the enduring commitment that the united states, our allies, and our partners will continue to support the stability of the afghan government and the durability of a responsible political settlement. that is the vision of transition. one that is shared by the afghan government that we are pursuing. so we have a big challenge with many moving parts. let me go through each surge, military, civilian, and

diplomatic, and explain how they fit together to advance our larger goals. first, the military surge. which sent thousands of additional american and allied troops to afghanistan to deny safe havens for al qaeda and to break the taliban's momentum. more and better trained afghan security forces are also in the field, working side-by-side with our troops. and we honor the service and sacrifice of all the women and men from every nation as well as their civilian colleagues who have put their lives at risk, and all too tragically, too many paid with those lives. they are engaged in a very tough fight, but we are in it together. thanks to their efforts, the rapidly deteriorating security situation the obama

administration inherited in its january 2009 has begun to stabilize. ended local security measures at the village level -- expanded local security measures at the village level have helped protect vulnerable populations. security has improved in kabul and key provinces like talent in kandahar. the momentum of the taliban insurgents has been planted, and in some place, even reversed. from the beginning, we have recognized the fundamental connection between our war effort in afghanistan and the extremists safe havens and in a bowler's in pakistan. it is no secret that we have not always seen eye-to-eye with pakistan on how to deal with these threats or on the future of afghanistan. but as a result of growing cooperation between our governments, military, and law

enforcement agencies and determined action by the pakistani army, we have been able to dramatically expand our counter-terrorism and intelligence efforts. pressure is increasing on both sides of the border. as a result, the terrorists who attacked us on 9/11 are under threat like never before. al qaeda's leadership has weakened. safe havens in border regions are smaller and less secure, and its ability to prepare and conduct terrorist operations has been significantly degraded. but make no mistake, al qaeda remains a serious threat. but it is finding it tougher to raise money, train recruits, and planned attack felsite the region. just as importantly, we have given its taliban allies and

sympathizers reason to question the wisdom of their loyalty. now let me turn to the second track. i know there are some on capitol hill and elsewhere who question whether we need anything more than guns, bombs, and troops to achieve our goals in afghanistan. as our commanders on the ground could be the first to say, however, that is a short-sighted and ultimately self-defeating the. we will never kill enough insurgents to end this war out right. the military campaign must proceed hand-in-hand with a robust civilian effort that helps the afghan government build credibility with its own people, offer alternative to the insurgency, and provide incentives for all afghans to renounce violence and work together toward a better future.

that is how insurgencies end. and that is why we have matched our military surge with a civilian surge. that triples the number of diplomats, development experts, and other act -- specialist on the ground. these efforts are mutually reinforcing and both support the transition process. we now have more than 1100 civilian experts from nine federal agencies working in afghanistan on everything from improving agriculture to expanding infrastructure to stemming the drug trade, and training afghan civil servants. we have also expanded our civilian efforts in pakistan, including through the carry lugar berman assistance program, which is funding projects to address pakistan's urgent energy and economic needs. after the devastating floods, we

stepped up with a in relieved, and our strategic dialogue is building and habits of cooperation between our governments at every level. now of course there are still significant challenges to overcome in our relationship. distressed leaders on both sides, and we need to work together carefully to prevent misunderstandings and disagreements from derailing the progress we have made in the past two years. so in both nations, the decision to deploy an additional civilian resources is paying dividends. even as we remain determined to work smarter and better at how we deploy these resources. the budget that president obama announced on monday provides the resources of our diplomats and development experts need to be effective partners to the military to get the job done.

retreating from the civilian side of the mission, as some funding proposals currently before congress would do, would be a grave mistake. i certainly appreciate the tight budget environment we find ourselves in, but the fact is that these civilian operations are crucial to our national security. consider the long-term price we have paid as a result of disengaging from afghanistan after 1989. as secretary of defense bob gates told the senate armed services committee just yesterday, we cannot afford to make that mistake again. or consider iraq, were the transition to a civilian-led mission is helping the pentagon save 45-billion dollars -- $45 billion, and the state department required an increase of only $4 billion to make sure

that we're robustly engaged with the government and people of iraq. that is a good deal by any standard. so we are working with congress to ensure that the civilian surge in afghanistan and pakistan receive the support it requires now and in years to come. i will not sugarcoat the fact that the afghan government has, from time to time, disagreed with our policies. there is no denying the challenges that our civilian efforts face in afghanistan. corruption remains a major problem. fighting fraud and waste is one of our highest priorities. a major focus of the civilian search has been expanding our presence in the field, getting more experts out to provide hands-on leaderships of our development projects. we have partnered with the military to put in place

starting your controls on contractors, and we're working with afghan institutions that we fund directly to help them improve auditing and accountability. so as the military surge weakens the insurgents and pressures them to continue -- to consider alternatives to armed resistance, the civilian surge is participating in a peaceful society. together, the two efforts prepare the ground for a political process which history and experience tell us is the most effective way to end an insurgency. and that brings us to the third track. president obama's december policy review emphasized, and i quote, " that our civilian and military efforts must support adorable and favorable political resolution of the conflict.

in 2011, we will intensify our regional diplomacy to enable a political process to promote peace and stability in afghanistan." as promised, we're launching a diplomatic surged to move this conflict toward a political outcome that shatters the alliance between the taliban and al qaeda, ends the insurgency, and helps to produce not only a more stable afghanistan but a more stable region. now of course, we had always envisioned richard holbrooke leading this effort. he was an architect of our integrated military, civilian, diplomatic strategy, and we feel his loss so keenly. but richard left us a solid foundation. over the past two years, he built an exceptional team and a strong working relationship with

our allies and our regional partners. today, i am pleased to announce a the president and i have called back to service ambassador mark grossman, a veteran diplomat and one of richard's most esteemed colleagues as our new special representative for afghanistan and pakistan. ambassador grossman's first for in foreign service was in pakistan. he knows our allies and understands how to mobilize, and actions to meet shared challenges. he played a crucial role in the dayton talks, and richard described him in the memorable book that richard wrote as one of the most outstanding career diplomats. ambassador grossman has followed in richard's shoes before, when he served as assistant secretary of state for european affairs in the 1990's, and i am absolutely confident in his ability to hit the ground running.

now ambassador grossman and the rest of his interagency team will marshal the full range of our policy resources to support responsible afghan-led reconciliation that brings the conflict to a peaceful conclusion and to actively engage with states in the region and the international community to advance that process. as i said, important groundwork has already been laid, but i richard and his team and by the afghans themselves. many low-level fighters entered the insurgency not because of deep ideological commitments but because they were following the promise of a paycheck. so in london last year, the international community pledged financial support for the afghan government's comprehensive program to draw them off the battlefield and back into society. as military pressure escalates, more insurgents may begin

looking for alternatives to violence, and not just low-level fighters. both we and the afghans believe that the security and governance gains produced by the military and civilian surges have created an opportunity to get serious about a responsible reconciliation process led by afghans and supported by intense regional diplomacy and strong u.s. backing. such a process would have to be accepted by all of afghanistan's major ethnic and political blocs. for this to work, everyone has to feel they have a stake in the outcome and a responsibility for achieving it. president karzai made a good start by convening a broad based ps secured debt in june that set out a framework for national reconciliation. -- a broad based peace group. then he formed a council

including representatives from across afghanistan. council leaders are holding meetings and key provinces throughout the country with tribal leaders, civil society, women, and villagers to hear their hopes and concerns for a reconciliation process. they are working to form local councils, to begin the tension -- to begin engaging the insurgent and the broader community. the u.s. supports the second ever. over the past two years, we have laid out our unambiguous redline for reconciliation with the insurgents. they must renounce violence. they must abandon their alliance with al qaeda. and they must abide by the constitution of afghanistan. those are necessary outcomes of any negotiation. this is the price for reaching a political resolution and bringing an end to the military actions that are targeting their leadership and decimating their

ranks. if former militants are willing to meet these red lines, they would then be able to participate in the political life of the country under their constitution. now i know that reconciling with an adversary can be as brutal as the taliban sounds distasteful, even unimaginable. and diplomacy would be a lot easier if we only had to talk to our friends, but that is not how one makes peace. president reagan understood that when he sat down with the soviets, and richard holbrooke made this his life's work. he negotiated face-to-face with milosevic and ended the war. it will not be easy. all adversaries will need to see that their own self-interests lies in setting aside their grievances. taliban militants will have to decide that they're better off working within the afghan political system, rather than

fighting a losing struggle alongside al qaeda in bombed out caves. the afghan government must be prepared to be more inclusive and more accountable. all parties will have to commit to a pluralistic political system that respects the human rights of every afghan. the united states is committed to helping afghans defend those rights. we will not abandon our values or support a political process that undoes the social progress that has been made in the past decade. the afghan government needs to safeguard the rights of all afghans, especially women and minorities. i know firsthand for what happened in the balkans, northern ireland, and other places, recovering from conflict, that the participation of women and a civil society

groups will be essential to building a just and lasting peace. the united states supports the participation of women at all levels of the reconciliation process, because we believe the potential for sustainable peace will be subverted if women are silenced or marginalized. afghan women made significant contributions to the peace jurga. they must continue to be part of the high peace council, and they have an important role to play at the provincial and local levels is genuine reconciliation is going to take route. reconciliation, achieving it, and maintaining it will depend on the participation and support of afghanistan's neighbors, including and most importantly pakistan. let me be blunt, we all need to be on the same page for this to work. whether we live in kabul,

islamabad, or washington, we need to share a common vision for the future, a vision of a stable, independent afghanistan, rid of its urgency and proxy conflicts fought by neighboring states. a vision of a region free from al qaeda. as we have underscored through the beginning, pakistan plays a pivotal role. it is a nuclear-arms a nation of nearly 170 million people, with deep ties and strong interests in afghanistan. it was with pakistan that the united states and other countries supported the afghan people in their fight against the soviet occupation in the 1980's. and pakistan continues to host thousands of refugees from the current conflict. unfortunately, the historic distrust between pakistan and

afghanistan remains a major cause of regional instability and does not serve the long-term interests of the people of either country. pakistan has legitimate concerns that should be understood and addressed by the afghan government. under any reconciliation process. with the steps that provide transparency and a reassurance. but pakistan also has responsibilities of its own, including taking decisive steps to ensure that the afghan taliban cannot continue to conduct the insurgency from pakistani territory. pressure from the pakistani side will help push the taliban toward the negotiating table and away from al qaeda. for reconciliation to succeed, pakistan will have to be part of the process. it will have to respect afghan

sovereignty and work with afghanistan to improve regional stability. we know cooperation is possible. just last month, afghanistan and pakistan took a huge step forward with formal ratification of a long awaited transit trade agreement, which will boost economic opportunity on both sides of the border by opening new markets and trade routes for afghan and pakistani goods. this was one of richard's proudest accomplishments, because it had been in negotiations since the early 1960's. expanding this cooperation to security issues, including reconciliation, is in the interests of both nations and will be a focus of our diplomatic efforts going forward. beyond pakistan, all of afghanistan's neighbors and near neighbors, india and iran, russia and china, the central asian states, stand to benefit

from a responsible political settlement in afghanistan and also an end to al qaeda's safe havens in the border areas and the exporting of extremism into their countries. that would reduce the terrorist and narcotics threat to their own citizens, created new opportunities for commerce, and ease the free flow of energy and resources throughout the region. it could also help move the other regional conflicts toward peaceful resolution. indeed, we are encouraged by news that india and pakistan are relaunching a dialogue aimed at building trust, and we encourage them to work in that same spirit to support a political process in afghanistan. we look to them and all of afghanistan's neighbors to respect afghanistan's sovereignties, which means agreeing not to play out their rivalries within its borders and

to support reconciliation and efforts to ensure that al qaeda and the syndicate of terrorism is it denied safe-haven everywhere. afghanistan, in turn, must not allow its territory to be used against others. the united states will intensify our efforts to build broad international support for afghan reconciliation. in early march, we will meet in saudi arabia with our partners in the international contact group, hosted by the organization of the islamic conference. the contact group, which richard worked so hard to build, brings together more than 40 countries and international organizations, including a growing number of muslim-majority nations. the afghan leaders of the high peace council will join us and review efforts towards reconciliation. nato ministers will convene in paris a few days later to review transition planning.

we're also preparing for a conference in germany later this year for the 10th anniversary of the bond conference, which we hope will be an important milestone in the political process. as this work proceeds, the united states will relentlessly pursue al qaeda and those taliban who refused to renounce violence, while working to improve security development and governance of the ground. again, the afghan taliban have a clear choice. the part of afghanistan's future or face unrelenting assault. for reconciliation to take hold, for it to be irreversible, afghanistan oppose the government will need to provide security -- afghanistan's government will need to provide security to all its people. the u.s. and our allies will continue training, advising, and assisting afghan forces. we're working with president

karzai to implement a responsible transition to afghan security leadership, which will begin in the coming weeks. and in july, we will begin to reduce the number of troops based on conditions on the ground, transition to an afghan leadership will be complete by the end of 2014. we think this provides the afghan government the time andits means to further build up the security forces, ministries, and institutions that will make reconciliation and durable and sustainable. just as importantly, a political process that takes insurgents off the battlefield will make it easier for our troops to hand over responsibility to afghan security forces and for transition to proceed. we have been clear that this transition does not mark the end of our commitment to the people of the region. nato has pledged an enduring

military and financial commitment to afghanistan that will extend beyond the completion of transition in 2014. and at the request of the afghan government, the u.s. will launch negotiations on a new strategic partnership declaration. it will provide a long-term framework for our bilateral cooperation in the areas of security, economic, and social development and institution- building. this new partnership will complement our ongoing strategic dialogue with pakistan. the development of these relationships, along with our deepening engagement with key neighbors, is crucial to providing stability and confidence in the region. the united states will always maintained the capabilities to protect our people and our interest, but in no way should our enduring commitment be misunderstood as a desire by

america or our allies to occupy afghanistan against the will of its people. we respect or a presence that would be a threat to any of afghanistan's neighbors. the united states is not walking away from the region. we will not repeat the mistakes of the past. our commitment is real and it is in during. but for all that america is ready to do and for all the work of the international community, the people and leaders of the region are ultimately responsible for their own futures. pakistan these are tired of terror and turmoil. the afghans have suffered through three decades of war.

but the leaders of both nations in and out of government have not done enough to chart a different course. despite steps by the government over the past two years, pakistan's public finances remain in disarray. energy shortages are having economic growth and causing political and social instability. routine suicide bombings, including last week's tragic by a so-f 31 innocencts called suicide schoolboy bomber _ the threats of violent extremism, and shocking, unjustified anti-americanism will not resolve these problems. america stands ready to assist pakistan's leaders in addressing these challenges. they have already enacted some reforms aimed at stabilizing the

economy. the test will be in how they are implemented, supported, and expanded. pakistan's leaders still have a lot to do to reduce corruption, to rebuild from last summer's floods, and to keep making progress in eliminating extremists and their sanctuaries. the afghan people also expect their government to present a positive vision for the future. president karzai's stated commitment to enhance transparency, improve basic services, and reduce corruption is a start, but its people will look for deeds to match the words. they will look for strong and independent democratic institutions like the courts and electoral bodies to ensure their rights. most of all, they will look for results that make a difference in their lives. leaders in both nations will have to decide what kind of

future they want for their children and grandchildren to inherit. what that future looks like will depend, to no small degree, on the success of the political and diplomatic process i have described today. so long as leaders in kabul and islamabad i each other with distrust, so long as the taliban has safe havens from which to wage war, so long as alcott operates anywhere in the region, the prospects -- as long as al qaeda operates anywhere in their region, the prospects for success are slim. two months ago in december, just before the protest began in tunisia and egypt, i warned that the region's foundations were sinking into the sand. afghanistan and pakistan's conflict is blasting the

foundation the part, brick by rick. reform offers another way. south asia is home to 1.5 billion people. they are talented and hard- working, rich in culture and blessed with entrepreneurial spirit. if the countries of the region can move beyond their historic conflicts and cooperate to seize the opportunities of the 21st century, there are no limits as to what they can achieve. hr friend richard holbrooke believes a better future is possible for afghanistan, for pakistan, and the wider region. he once observed to "in every war of this sort, there is always a window for people who want to come in from the cold, if they are willing to accept the red lines and come in, there has to be a place for them."

those were his words, and that is the policy of the united states. may not produce peace tomorrow or the next day, but it does offer our best chance. and it offers especially the best chance for the people of afghanistan and pakistan, who so richly deserve a different future. the united states will be there as a partner to help them achieve that, if that is the path they choose. thank you all very much. [applause]

>> i don't have to say anything. the truth of the matter is what a comprehensive, clear eyed, amazing speech that will be heard all over the world. thank you. [applause] >> sunday on prime minister's questions, david cameron response to concerns about the recent rise in unemployment in the u.k. he also talks about the increased cost of health care,

investment in rural broadband, and stepping up efforts that stop human trafficking. that is at 9:00 p.m. eastern here on c-span. >> in his weekly address, president obama discusses the need for improving education for the u.s. to compete globally for new jobs and industries. he gives the week's address from intel corp. facility that he visited yesterday near portland, oregon. he is followed by house budget committee member tom price with the gop address. he talks about the 2012 budget request and the need to cut government spending to create a better environment for job creation. his remarks follow a series of amendments passed by house republicans early this morning that would reduce 2011 federal spending by $61 billion. >> i am speaking to you from just upside portland, ore., wehrheim visiting intel, a company that helped pioneer the digital age. i just came from a tour of an assembly line were highly

skilled technicians are building microprocessors that run everything from desktop computers to smart phones. but these workers are not just manufacturing high-tech computer chips. they are showing us how america will win the future. for decades, intel has led the world and developing new technologies. but even as global competition is exemplified, this company has invested, build, and hired right here in america. three-quarters of intel's products are made by american workers. as the company expands operations in oregon and builds a new plant in arizona, it plans to hire another four thousand people this year. companies like intel are proving that we can compete, that instead of just being a nation that buys what is made overseas, we can make things in america and sell them around the globe. winning this competition depends on the ingenuity and creativity of our private sector, which was on display in my visit today. it also will depend on what we

do as a nation to make america the best place on earth to do business. over the next 10 years, nearly half of all new jobs will require education beyond high school. many require proficiency in math and science. yet today we have fallen behind in math and science and in graduation rates. as a result, companies like intel struggle to hire american workers with the skills that fit their needs. if we want to win the global competition for new jobs and industry, we have to win the global competition to educate our people. we have to have the best trained, best skilled work force in the world. that is how we will insure that the next intel, the next google, or the next microsoft is created in america and higher american workers. this is why over the past two years, my administration has made education a top priority. we have launched a competition called race to the top, a reform that is lifting academic standards and getting results.

not because washington dictated the answers, but because states and local schools pursuit innovative solutions. we are making college more affordable for millions of students and revitalizing our community colleges so that folks can get the training they need for the careers they want. as part of this ever, we have launched a nationwide initiative to connect graduates that need jobs with businesses that need their skills. intel understands how important these partnerships can be, recognizing that their companies success depends on a pipeline of skilled people ready to fill high-wage, high tech jobs. intel often pays for workers to continue their education at nearby portland state university. as a result, one out of every 15 of intel's oregon employees has a degree from portland state. intel's commitment to education begins at an even younger age. the company is providing training to help 100,000 math and science teachers improve their skills in the classroom.

today i mean a few students from oregon who impressed the judges in high school science and engineering competitions that intel sponsors across america. one young woman conducted a chemistry experiment to investigate ways to protect our water from pollution. another student applied the principles of quantum physics to design a faster computer chip. we are talking about high school students. these have been a tough few years for our country and some question what the future hold, but when you meet a young people like these, it is hard not to be inspired an impossible not to be confident about america. we are poised to lead in this new century, not just because of the good work that large companies like intel are doing. across america there are innovators and entrepreneurs who are trying to start themselves or get a small business off the ground.

i will be meeting with some of these next week in cleveland to get ideas about what we can do to help the companies grow and create jobs. the truth is, we have everything we need to compete. bold entrepreneurs, bright new ideas, and world-class colleges and universities. most of all, we have young people just brimming with promise and ready to help us succeed. all we have to do is attack that potential. that is the lesson on display here at intel and that is how america will win the future. thanks so much. >> hello, i am congressman tom price and i have the privilege of working for the people of georgia's sixth congressional district. i am a member of the house budget committee, and by now you have probably heard a lot of talk coming out of washington about a so-called budget battle. we even have some democrats threatening to shut down the government instead of listening to the american people and cutting spending. right now, our focus should be

creating jobs and getting our economy moving again. after all, the president promised that this would be the year that he got serious about the deficit and the debt hurting our economy. instead, he started out by asking congress to raise the debt limit, without any commitment to cutting spending at the same time. in his state of the union address, he called for more effective stimulus spending, and this week he submitted a budget for the next fiscal year that destroys jobs by spending too much and borrowing too much and taxing too much. listen to economists. listen to the folks to create jobs in this country. you'll hear that we need to into the washington spending binge, and to reduce uncertainty, to encourage private investment in our economy. to help create a better environment for job creation in america, the spending binge has got to stop. with the support of republican governors and are reform-minded colleagues in the senate, the new house majority is working hard toward that goal.

that is what the house spent this past week working on a bill to cut discretionary spending by $100 billion over the last seven months of the current fiscal year. we are not only living up to our pledge to america, we are exceeding it, and more cuts and reforms are on the way. as part of our focus on job growth, committees in the house or combing through job crushing government regulation and conducting rigorous oversight of how the government spends the people's time and your money. we will soon begin work on legislation to cut wasteful mandatory spending. under the leadership of our budget chairman, paul ryan, we will put forth a budget in the spring for the next fiscal year that confronts the fiscal challenges facing our nation, instead of ducking them. it will offer ideas for real entitlement reforms so we can have a conversation with the american people about the challenges we face and the need to chart a new path to prosperity. as a doctor and a parent, i find

it astounding that the president has submitted a budget that ignores the recommendations of his own fiscal commission and punts on all the tough choices, including entitlement reform. instead, he has expanded entitlements through obamacare, a government takeover that will destroy 800,000 jobs, according to the nonpartisan congressional budget office, and accelerate our path to fiscal ruin. this issue demands presidential leadership, the present rigid something the president so far seems unwilling to offer. the president admitted that his budget fails to address our fiscal crisis. some members of congress still won't even a knowledge that there is a crisis. one in particular, senate majority leader harry reid, said not too long ago, social security is fine. but you know is not fine. this year for the first time, it will pay out more money than it takes in. with the wave of baby boomers

starting to retire, there is no way we can protect programs like social security for the future and get our debt under control unless we began to honestly address entitlements. for the president, leadership retires -- requires telling harry reid the truth, even if it is politically difficult. our reforms will focus on saving these programs for current and future generations and on getting our debt under control and our economy growing. but taking critical steps forward now, we can fulfill the mission of health and retirement security for all americans without making changes for those in or near retirement. the new republican majority will leave even as the democrats to run washington ignore their responsibilities. the senator reid and president obama changed their minds, we will be ready to work with them. in the meantime, republicans are focused on listening to the people, confronting our nation's challenges, and helping our economy get back to creating jobs. thanks for listening.

>> this monday, visit the public and private spaces of america's most recognizable home, the white house. c-span is original documentary provides a rarely seen look at the history of the presidential residence and take you through the mansion, the west wing, the oval office, and lincoln bedroom, and focuses on the precedents and first families who have most influence outlooks today. airing in high-definition and newly updated with interviews with president obama and the first lady and comments from georgia and laura bush, the white house, inside america's most famous home, this monday at 6:00 p.m. eastern on c-span. >> now the senate intelligence committee hearing on security threats in the u.s. and abroad. you'll hear remarks from national intelligence director james clapper, cia director leon panetta and fbi director robert mullins. this is almost two hours.

>> to allow the american public of you into the assessments of the united states intelligence agencies about the dangerous world in which we live. yesterday's, the senate passed overwhelmingly at least a temporary extension to the end of may of three very vital sections of the united states patriot act, and i have been surprised about how much misunderstanding that have caused.

i have also been surprised at how short memories are. explosives today are much more sophisticated. they are undetectable. just a very short time ago in dubai, printer cartridges were found with an undetectable explosive in them, and if it had not been for good intelligence that brought the inspectors back a second time and said you have to open these things up and look, two bombs would have left dubai headed for the united states, theoretically to chicago to a synagogue, and likely would have exploded either over canada or part of the united states. this is eloquent testimony of the need to provide the opportunities for intelligence.

this nation does still remain in jeopardy. just a short time ago, you had both director clapper as well as secretary napolitano testify in the house about the level of concern, threat, and potential jeopardy to our country. i think these tools are very important, and i am always surprised at the opposition, because i would have thought somebody, if they had a problem, would have called me and said look, this is being done wrong. please take a look at it. previously, from time to time, the judiciary committee and the intelligence committee does just that. providing the intelligence community with the tools they need with proper due process, and we do have such a thing as a foreign intelligence surveillance court that meets 24/7, that gives what is essentially like a warrant, so

of the roaming wiretaping is all done in a legal way. the only difference is that the individual is the target, not the specific telephone, because they change telephone so quickly. so the technology that improves also means that intelligence techniques have to improve. it is my hope in the coming months that we will be doubled to prepare the american public to work with the public media and set expectations that make clear that in the event of an attack we hope will not come, the full life with those -- the

fault lies with those who commit those acts, not with those who go to work every day to prevent these attacks. i think for those of us that read the intelligence on a regular basis, we know that there is jeopardy out there, and we know that if something were to happen in this country, that everyone's sitting at this table would be asked, why didn't you know? they have to have the tools to find out, and we have to see that the due process is provided in that process. i think we have come a very long way since 9/11. i truly believe our country is much safer than it was prior to 9/11, and a great deal of it really is due to the people testifying here today, and to

the agencies that they so well run. i deeply believe that, and so let me introduce the witnesses. they are the director of national intelligence, james clapper, who will deliver the opening statement following the comments of the vice-chairman, the director of the central intelligence agency, whom i have known for very long time, leon panetta, the director of the defense intelligence agency, general rommel burgess, the director of the fbi, bob moeller, and the director of the national counter-terrorism center. assistant secretary of state for intelligence and research, philip goldberg. i would like to note that this will be director mullers final appearance at a worldwide threat hearing as he is now 9.5 years into his 10-year term as fbi director. but we have another half year with you, so i don't want to

engage in goodbyes at this time. who knows, maybe there is a way that it will not happen. i would like to turn to the distinguished by its chairman of this committee with whom it is a pleasure for me to work. >> it is a privilege for me to have the opportunity to continue to work with you on this particular issue that is of such vital importance. maybe we should start that chant, 10 more years. i would be in favor of that. gentlemen, and this is a very impressive lineup we have this morning, thank you for being here. thanks for your willingness to serve our country and to respect the capacity in the respective capacities that each of you do. you represent those who work quietly behind the scenes, often in dangerous locations, to ensure our nation's safety. our thanks goes out to each and every one of those folks that

work for you and put their life in harm's way every single day, and we appreciate them very much. recent events in the middle east and north africa remind us how rapidly the world can change. the internet and social network media play a key role in this evolving landscape and can complicate our ability to understand and keep pace with unfolding events. we saw it in tunisia and egypt. we may be watching it soon elsewhere. staying ahead of the curve means we must be inside the networks to collect information on those who are in position to affect the status quo. this is as true in the context of international leadership and regional stability as it is in terrorist networks and insurgencies. it is your job and you must be organized, resources, and equipped to do it. congress must help equip you by

ensuring have the tools and appropriate authorities to do this job. three important tools in the foreign intelligence surveillance act expire soon. each one of those is an essential authority and we must make sure that they remain in force. obviously the senate acted last night on a short-term extension of these, and we hope we are able to get a more lengthy extension in the very near future. thank you for coming over the other night and visiting with our folks and providing some very valuable answers to questions. another area where congress must help is in interrogation and detention policy. two years after the president's executive orders on interrogation and detention, we still do not have an adequate system in place for detaining captured terrorist, collecting

intelligence from them, and holding them until they can no longer do us harm. we cannot keep letting dangerous detainees go free. it is time for congress to provide a framework for detention and interrogation, wherever detainees are captured. congress can and must help in these and other areas like cyber, but in these difficult economic times, resources are certainly a challenge. resources are not infinite and must be prioritized. i caution the i s c two not spread itself too thin in trying to respond to every potential national security issue without an honest assessment of your capabilities to add value. in my opinion, assessments produced in the past year, such as the technology of fresh water availability in 24 e and the devil in the corner, cookstoves in the developing world, have no place in the ifc. this is more true at a time when

you are facing severe budget constraints and priorities like terrorism, detainee recidivism, the proliferation of weapons of mass destruction, the cyber threat, two wars, and unstable countries threat the middle east. you must focus on the greatest threats and leave issues that up little intelligence value or they can be better analyzed elsewhere to others in the government or the private sector. today is your opportunity to tell us how you have ranked the biggest threats we face and where you think your resources should be focused. it is imperative that the $55 billion in taxpayer money you have requested will be spent wisely. again, i thank you for your service to our country. thanks for being here today, and i look forward to their testimony. >> the rounds will be five minutes and we will use the

early bird rule so that everybody knows. director clapper, welcome. >> thank you, distinguished members of the committee for inviting us to present the 2011 worldwide threat assessment. i am very pleased and proud to be joined by my intelligence community colleagues. the intelligence community is indeed a team, and the community i am proud to be associated with. represent at the table or hundred years of dedicated public service. i would like to commend director bob moeller for his superb service. he has been an outstanding participant, partner, and leader in the intelligence community, and leon panetta whose years of public service and wisdom have been so helpful to me. the two organizations they head or two of the crown jewels in the intelligence community and

the nation is fortune to -- -- the nation is fortunate to have such leaders. i want to publicly acknowledge your unanimous vote in support of the president's nominee as my principal deputy, miss stephanie r. sullivan. as was shown by this vote to get our team in place, your support and partnership are essential. the intelligence community needs your oversight. it is not possible to cover the full scope of for what threats in brief remarks, so i would like to take this opportunity to highlight four broad areas of significant concern to the intelligence community. and submitted a statement for the record the reflect the collective insides of the extraordinary men and women of this community. first and foremost is terrorism. counter-terrorism is our top priority because job one is to keep american safe and homeland

secure. the intelligence community has helped thwart many potentially devastating attacks. most recently was the car broke bomb plot this past october. we have ever attended many bad actors throughout the world and greatly weakened much of al qaeda as core capabilities including operations, training, and propaganda. we are focused on their resolve to recruit americans and to spawn affiliate groups, most notably its chapter in the arabian peninsula. we also see disturbing instances of self -- self radicalization among our citizens. the have a disproportionate impact because they understand our homeland has connections here and have easier access to u.s. facilities. counter-terrorism is central to our overseas operations in afghanistan, and while progress in our efforts to defeat al qaeda is hard one, we will continue to see success and

governors, security, and economic developments. although u.s., operations have come to an official close in iraq, bombings by terrorists, specifically al qaeda, mean that our work to help solidify the gains we have made thus far remains a high priority. another major concern is proliferation of weapons of mass destruction. the threat environment is a fluid, borderless arena that refracts budget reflects the broader global reality of the increasingly frequent movement of goods and information. this environment also allows the materials, technologies, and know how related to chemical, biological, and nuclear weapons systems to be shared with ease and speed. iran is a key challenge. in the months following the

elections, we saw a popular movement frederick -- challenged the authority of this government. we saw the iranian government crackdown with harsher control. today we are seeing similar unrest, although so far on a smaller scale than was the case in 2009. we look forward to discussing iran further with you in closed session, particularly its nuclear posture. we see a disturbing confluence of events in iran that is it increasingly rigid, autocratic, and dependent on coercion to retain control. it continues to increase the capacity to increase nuclear weapons if its leaders choose to do so. north korea also poses a significant threat regionally and beyond.

it craves international recognition as a nuclear weapons power and has shown troubling willingness to sell nuclear technologies. i also want a hot another major challenge for the intelligence community, the reality that we live in interconnected world where instability can rise quickly and spread beyond borders. the vivid examples of this include the sudden fall of the regime in tunisia and the contagious mass uprisings in egypt, which led to the departure of former president mubarak and demonstrations elsewhere. intelligence community is following these fast-moving events closely. i would like to address some reason questions that have been raised as to whether the intelligence community has been tracking these events effectively. for some time the intelligence community has been addressing the drivers of instability in the region, to understand future risk to redeem stability.

specific triggers for how and when instability would lead to the collapse of various regimes cannot always be known are predicted. but in -- what intelligence can do in such cases is reduced but not completely eliminate uncertainty for decision makers weather in the white house, congress, embassy, or the foxholes, as we did in this instance, but we are not clairvoyant. the intelligence community provided critical intelligence before and throughout this crisis and has been reported on the and the factors for these frustrations. in addition to our classified sources, we have produced some 15,000 open source products on the region providing insights from traditional local media, both print and electronic, to include social media appear

in my attempt to shore can my description of the muslim brotherhood, the muslim brotherhood is obviously not secular, but what i would like to clearly state here is that the muslim brotherhood tries to work to re political system that has been largely secular in its orientation. it is a large organization and its agenda an impact differ from country to country. in egypt a gain much of its support through grass-roots about reached and on religious functions like providing health clinics and day care centers. also has different factions including a conservative wing is interpretation of islam runs counter to broad electoral participation, and younger wing trying to work to the secular political process. i expect the muslim brotherhood will likely be a part of the political process in egypt as will other opposition groups.

what we saw in egypt was much broader than the muslim brotherhood. what is happening in the middle east is another manifestation of the fact that economic challenges have become paramount in our interdependent world and cannot be underestimated from increasing debt to fluctuating growth to china's economic rise. another example is the harbor threats and the impact on national security and economic prosperity. this threat is increasing in scope and scale. industry estimates that the production of malicious software has reached its highest level yet but new variations identified every day. we are seeing a rise and intellectual property theft. the loss is estimated to increase, approaching one trillion dollars in 2008. costs are difficult to pinpoint.

we believe the trend is only getting worse. throughout much of 2009, large companies were in the targets of systematic efforts to penetrate their networks and acquire proprietary data. the intrusions attempted to gain access to source code of most of these companies. along with current cyber threats, the intelligence community is analyzing the implications of international order as i us crime, climate change, humanitarian disasters and other global issues. we must always remain attentive to developments in all parts of the globe and in many spheres of activity. that is why consider it imperative that we must sustain robust, balance array of intelligence capabilities. we face a wide range of more

intelligence threats to our economic, political, and alter interest at home and abroad. unauthorized disclosures of sensitive and classified u.s. government information also poses substantial challenges. the most prominent example recently is the unauthorized downloading of classified documents subsequently released by wikileaks. these disclosures have been very damaging from intelligence perspective. as part of broader effort, we are working to better protect your information networks by improving audit and access controls, increasing our ability to detect and deter insider threats, and expanding awareness of foreign intelligence threats across the u.s. government. i believe it can and will respond to the problems of intrusions and leaks, but we must do so without degrading the essential information sharing. intelligence committee is better able to understand the best rate of interlocking concerns and

trends and anticipate developments and stay ahead of adversaries, because we operate as an integrated community. i like to think our presence here today is a manifestation of that. i want to say a few words about the size and the idea of the office of director of intelligence which has been a matter of debate. a thorough review of the organization -- other statutes and executive orders and what they direct the the and i to do. -- the dni to do. identified elements that should transfer out to another agency that would carry out the services on behalf of the dni. based on this efficiencies review, the office of dni is

being reduced in size and budget and i look forward us several times to present our plans in detail to the committee. i think the value-added is the integration intelligence efforts and activities, the harmonization, collection, and analysis to ensure the community is providing the best possible analysis on the difficult issues that the nation faces. i thank you in the distinguish members of the it committee for your support. my colleagues and i look forward to your questions in our discussion. >> i will begin the questions. i want to ask you a couple of questions about the muslim brotherhood. how committed is it to the egyptian-israeli peace agreement? >> that is a hard question to answer, madam chairman, because

of the factors i outlined about eity.heterogenous yet that will be one voice in the emerging political mill you in egypt. i think it is also worthy to note that the supreme council of the armed forces has reaffirmed its commitment -- in particular the arab-israel peace treaty. >> to the best of the intelligence community's knowledge, what is the position of the muslim brotherhood on stopping weapons smuggling into gaza?

thatain, i don't know there is the stated position of the muslim brotherhood on this issue. i would surmise that are probably supportive of that, but again, it is hard at this point to point to a specific agenda of the muslim brotherhood as a group. cracks what is its position with respect our relationship with respect to iran? >> that, too, remains to be seen. i think iran of course would like to exploit the situation, not only in egypt but elsewhere in the region, which is undergoing some upheavals. what that relationship would turn out to be remains to be

seen. we are certainly gone to watch for that. >> the reason i ask these questions is because in the various television coverage, there has been a lot of commentary to the fact that the muslim brotherhood really only represents about one-third of the people. well, when you don't have a wide spectrum of political parties, a third of the people is a lot of people. any of us could tell you that. you really take seriously any of, that represents any opponent that represents one-third of the constituency. it has been passed off as, well, it is secular and it wants a secular government. i think from an intelligence perspective, it is critical that we know what is that position, and what is apt to happen? egypt is the key country in the middle east, and i worry about

that. >> we share your concern, madam chairman, and this is obviously something we are going to watch. we will have to step up our observation. we are going to have to see how the constitutional reform effort unfolds. at least one of the members of the constitutional reform committee does represent the muslim brotherhood, so they will be participating in that process. as that unfolds, we will be watching that very carefully to determine just what the agenda would be of the muslim brotherhood. >> one other question. in the week leading up to the major protests in egypt, on january 25, after tunisia's protests were in full force, how many warning products did the ic write on egypt? >> the key event, at least from

my vantage, was the sudden, snap decision made by presidents ben ali on about the 14th or 15th of january. i am convinced that the day he drove to work, when that happened, he was not planning on doing that. that was a very quick decision on his part. when that happened, i think we upped the game there on describing the general conditions elsewhere in the region and what the potential would be for the contagion, to use the now popular term, as affect egypt, and we tracked that very carefully. i can certainly provide you an accounting of specifically -- >> you have, and i have been through it. >> stephanie sullivan did that's in the follow-up to her hearing. >> i believe that most of it

came from cancom. the reason i cannot bring that up is i think that is lacking on all or part, not to include this kind of open source. i am not a big computer person, but i looked at facebook, and i am not a member of facebook, and you could get right in and you could see everything about it. all the comments of people, and it seems to me that this ought to be watched very carefully to be able to give our policymakers and our leadership some advance notice. i think we were a fault in that regard. >> we can always do better. there is always room for improvement here. the open source center, which i think has done some marvelous work and might be worth a separate session on their

observations of the media in all these countries, the classical print media, electronic, to include radio and television, and social media, and the analysis that they were doing on that. as you have seen, this is a huge area that we need to watch. i have to also say that social media does not represent a command and control network. the fact that there is a lot of activity it certainly is an indicator, but it doesn't necessarily give you the specific time and circumstance of the events that occurred both in tunisia and egypt. >> mr. panetta, you wanted to respond? >> if i could just add to that. watching this since 2007, looking at social networks and what is going on there. it is a huge responsibility,

because of the tremendous growth in information. just to give you an idea, there are 600 million facebook accounts out there. there is something like 190 million twitter accounts. there is 35,000 hours of youtube that is upgraded every day. there is a massive amount of data out there. the real challenge is how to be able to -- going through the diversity of languages, going through the different sites out there, how do we look at the relevant web sites to be able to draw from them the kinds of information that will help us? this involves a tremendous amount of analysis. the open source center has done tremendous work at trying to monitor these areas. the fact that you are on a

website or social network is not necessarily predictive of what will take place. having said that, it is really important for us to monitor these areas and try to get the best sense of what networks, what websites are having the largest impact. >> it is unfortunate that the press tended to misconstrue what you had to say with respect to the muslim brotherhood. those of -- those of us that know you and know the community knew exactly what you meant. i just have one other follow up on that particular issue. the consider the muslim brotherhood and extremist islamic organization, or is it an islamic organization that certainly has some members who may be extremists?

>> i would probably go for the latter characterization. there are clearly places where there are extremists, no question about it, in the muslim brotherhood. its agenda varies from country to country. there is not an international umbrella organization that does not specifically direct the individual chapters or franchises. >> it is important to make the point, this is not a monolithic organization. he is an organization that goes back to the 1920's. it varies from area to area. you look at different countries and different versions of the muslim brotherhood. they have different characteristics, different approaches. there are groups of extremists that are part of some of these areas. there are lawyers and professionals that are part of the muslim brotherhood in egypt,

for example. it is very difficult to say they are extremists. it is clear that within the muslim brotherhood there are extremists elements that we have to pay attention to, and that is something we watch very closely to make sure that they are not able to exert their influence on the directions of governments in that region. >> i talked about the extension of the three patriot act provisions. there has been a lot of misinformation put out in the media over the last several days with respect to these three provisions. i would like for you to address those three provisions and to particularly addressed these four questions. why are they important and necessary authorities, do

support making those three provisions permanent, what are the operational problems caused by those provisions, and do you have the authority under these provisions currently in lots to access information without a court order? >> let me start with the three provisions. the business records provision allows us to go to the fisa court and produce records that may be relevant to a foreign investigation, relate to someone trying to steal our secrets or a terrorist. upon us showing that the records are relevant to this particular investigation, the court would issue an order allowing us to get those records. it has been used over 380 times

since 2001. it provides us the ability to get records other than telephone toll records, which we can get through another provision of the statutes. it allows us to get records such as fedex or ubs records, if you had something along the lines of what the chair person indicated, the recent attacks, or records relating to the purchase of hydrogen peroxide, or license records, that we would get automatically with the grand jury subpoena. if we did not have that capability, we would be exceptionally limited to the records we could get, and the foundation for the continuation of an investigation where we may want to get a wire intercept would be undercut our ability to get the base records necessary to pursue the investigation.

we have to go and make a showing to the court in order to get the order. the second provision is the roving wiretaps provision which enables us when we make a showing that the target of our surveillance is attempting to thwart that surveillance. when we make that showing to the court, and the court will issue an order allowing us to focus on that individual as opposed to each particular telephone that individual may be using. if we go and make a showing that an intelligence officer from some other country is changing his telephone and #daily or weekly, rather than having to go back to the court every time he changes that number, the court's order allows us to stay on that individual regardless of the change of telephone number, having made a showing that he is trying to thwart surveillance.

again this goes through the fisa court. if we did not have that, there are so many means of communications now, and this particular order enables us to focus on a person without going back daily or weekly to get a change of order from the court. the last provision is called a loan with provision. -- the lone wolf provision. if a non u.s. citizen who we have reason to believe is an of a terrorist, we can use the authorities by going to the court and showing that this individual is involved in terrorist activities, but do not have to make the additional showing that he is an associate of a particularized terrorist group. back in 2001, moussaoui -- this

provision was put into if you could not make that tie, we could not use the fisa authorities, and this particular provision was put into the law to avoid that particular circumstance happening again and allowing us to go up on a non- u.s. citizen who was involved in terrorist activities with the approval and the order of a court. and while we have not used this provision yet, we can anticipate the circumstances in the future where we would have to utilize that provision. >> and making them permanent and problems with sunsets -- >> yes. i recommend doing it permanently. i believe that the procedure is in place with the fisa court, the court -- the due process required. and every time we come up to a day in which it is going to lapse or sunset, we are in a degree of uncertainty as to what's going to happen after that. if there is not the continuation of it, we then have to go back and go through thousands of investigations to

look at what impact the lapsing of these provisions will have in our ability to pursue those investigations down the road, and what tools we might have to further those investigations. and so each time it comes up it -- we're in a period of uncertainty until it is reauthorized for a particular period of time. and quite obviously i would be -- i would suggest that, given the threats we face, the provisions of these particular rules, that it would be appropriate to permanently reauthorize these three provisions. >> thank you. >> thank you, mr. vice chairman. senator wyden? >> thank you, madame chair, and thanks to all of you for the service that you are rendering our country. gentlemen, i don't take a back seat to anyone when it comes to protecting intelligence sources, operations and methods. that is absolutely crucial to the security and well-being of our country.

but i will tell you i am increasingly troubled about the intelligence community's reliance on secret law. and this is the legal interpretations of the key laws, instances where government agencies are relying on a secret interpretation of what the law says without telling the public what the interpretations are. and to me, if there is a gap between what the public believes the law is and what the government secretly thinks the law is, i think we've got a problem on our hands. so let me start with you, director clapper, with a question that gets into the patriot act, because that's obviously a key one we're going to have to deal with in the days ahead. director clapper, do you believe that members of the american public now have enough access to key information to figure out how our government

is interpreting the patriot act? >> sir, i do believe there is a wealth of information there. i would refer to the department of justice or fbi web pages on this subject as a source of public information. there are -- there is in the case of the patriot act potentially, you know, a -- what i think is a fairly small segment of that which is secret, much -- for much of the reason you outlined. are's why these activities overseen by a court and as well overseen by the intelligence committees on behalf of the american public. i think it's our objective to make this as transparent and explainable to the american public as possible, and minimize as much as we can that which is secret. bob, do you want to add to that?

>> i think what i would say is i do believe that the legal opinions of the department of justice are made available appropriately; that is not to say that an opinion that is classified, that is widely distributed. but i know that there is a distribution discussion with congress even in those areas in which there is substantial classification. but again, i'd have to defer to the office of legal counsel in justice to determine how that process goes forward. >> i'm talking, mr. mueller, about the american people. and i believe that the american people would be absolutely stunned -- i think members of congress, many of them, would be stunned if they knew how the patriot act was being interpreted and applied in practice. now, i voted last night for the short-term extension. i'd rather deal with this now and permanently, rather than kicking the can down the road.

but i'm going to insist on significant reforms in this area. we're not talking about operations and methods. those have got to be protected for the security of the public. but there is a huge gap today between how you all are interpreting the patriot -- you know, act, and what the american people think the patriot act is all about, and it's going to need to be resolved. so let me follow up with the second question for you, mr. clapper, again in this regard. and this deals with your authority to take action against americans who've taken up arms against the united states. a year ago your predecessor, director blair, said, and i quote, "we take direct actions against terrorists in the intelligence community. if we think that direct action will involve killing an american, we get specific permission to do that." now, that is obviously a statement with great consequence, and it certainly raises a lot of important issues. in my experience, you don't see

a government official making a statement like that without an extensive amount of legal analysis. i've asked for that legal analysis; nothing has been handed over yet, which again drives home the point that when we're talking about operations and methods, absolutely, we have to protect the men and women in the field. but we ought to have these legal interpretations, and i'd like to know your answer to my question in this regard, with respect to getting that interpretation in our hands. >> well, i -- i think i speak for all of us -- are committed to ensuring that the congress understands the legal basis for intelligence activities, any intelligence activity. in fact, this is a requirement of the intelligence authorization act for fy '10. and it's my understanding that the members of the committee have been briefed on these and other authorities. i think the issue that you get to, and at the root of your

question, is what director mueller alluded to, which is the actual provision of the formal written office of legal counsel opinions at the department of justice and whether or not they, in their entirety, can be provided to congress, which is kind of not our -- at least not my -- call to make. but i will assure you i am committed to ensuring that congress understands the legal basis for any and all intelligence activities. >> well, right now, with respect to the executive branch's official interpretation of what the law means, we're not getting it. and i think that's an issue -- well, my round has expired, so we can continue this -- that i'm going to insist on reforms here. i want to see us come up with a bipartisan set of reforms for the patriot act; we're not there yet. and i'll look forward to continuing this conversation. madame chair, thank you. >> thank you very much, senator. senator udall, you are up next.

>> thank you, madame chair. good morning, gentlemen. maybe i could turn to cyber. i serve on the armed services committee as well as the intelligence committee and this is of increasing interest in both sectors. could you all respond to how much that our security posture has improved and how do you measure such progress? for instance, intrusion rates -- are they dropping for . mil or . gov systems and how have our cyber defenses forced our adversaries to change their tactics and, if you will, up their game to penetrate our networks? i'm not quite sure who to start with but would welcome -- maybe general clapper, >> well, let me start, sir. i think at this -- in this setting i can say that certainly the threat has increased and, you know, i've tried to outline some of the manifestations of that in my

opening statement. but i also think we're making progress in defending our cyber, particularly in -- at least in the government- military realm and i would ask your forbearance in going into specifics, statistics and where are the sources of the attacks and et cetera in a -- in a closed session. >> thank you for that appropriate response. other members of the panel? director panetta. >> well, senator, i said this the other day and i'll repeat it -- that i really do think that the cyber area is the battleground of the future -- that we are talking about increasing capabilities, increasing imaginative uses of cyber that i think hold the potential for basically being able to paralyze and cripple a

country if it's -- if it's used to bring down a grid system or the financial systems or the government systems of the country. so it concerns us a great deal. we're seeing more attacks out there. we've got to -- i think we have successfully defended against many of those attacks but at the same time i think we've got to be aggressive at making sure we know how these attacks are coming. >> director - >> mueller. >> -- mueller. >> yeah. yes, sir. i think all of us believe that each of our entities is -- has got to grow substantially over the forthcoming years to address cyber attacks in all of their -- in all of the -- their iterations. one of the problems we have is at the outset of an attack you do not know whether it is a foreign country, foreign government, somebody affiliated with a foreign government, a group of hackers or the high school student across the way, and we are all aligned in our

particular specialties -- counter intelligence if it's a foreign government, criminal if it's somebody who is intruding for criminal purposes. one of the entities we've established which is very helpful is called the national cyber investigative joint task force where representatives of all of us sit together so that if there is an intrusion we have all of our areas of expertise including nsa, quite obviously, to try to identify that intrusion and then determine how we best follow and track that intrusion. and so while i think all of us would agree that cyber threats are increasing dramatically -- daily, monthly, weekly -- we understand that we have to come together and work very closely together in order to attribute those attacks and then pursue and deter those attacks in the future. >> others who wish to comment on the panel? i would note that the

chairwoman led a delegation of senators to china last year and we had a series of conversations with chinese leaders about working together in this area. it strikes me that nation- states, multinational corporations, institutions of all types have an interest in working together. it may be more the insurgent kinds of groups that are the -- that are the threat here. we clearly know more about how to go on offense than to play defense. but i appreciate the attention all of you are paying to this important area and i know the committee will continue to learn more at closed briefings and work to see if we can't understand better how we meet this threat. so thanks again for your service and for being here today. >> thank you, senator udall. senator coats. >> thank you, madame chairman. first of all, i want to thank

everyone at the -- thought i had it on. first of all, i want to thank everyone at the table here. your job is immensely complex and the multiplicity of threats that you have to deal with is such that it's -- you're on call 24/7. so i hope we can provide you with coffee sometime during this hearing. but i just appreciate the hard work all of you are putting in in trying to provide security for our country in a really, really complex difficult time. director clapper, i also appreciate your clarification of your statement on muslim brotherhood. all of us who stood for election understand how sometimes given a second chance we would have elaborated or not said anything. wasn't it will rogers who said never pass up an opportunity to shut up? i've faced that situation a number of times and should have used his advice. i do want to ask you, however,

about another statement that you made. it's on page 4 of your statement and i'll quote it and i think you even mentioned it in your opening statement. "we continue to assess iran is keeping the option open to develop nuclear weapons in part by developing various nuclear capabilities that better position it to produce such weapons should it choose to do so. we do not know, however, if iran will eventually decide to build nuclear weapons." i've got three things that bother me or concern me about that statement. number one, if we look at what has happened over the past several years with iran's extravagant and continuing efforts to defy u.n. security council resolutions -- if we look at its abrogation of its safeguards agreement, the regime's toleration of broad international condemnation, the ever-ratcheting sanctions that we're imposing against it, to me it's hard to -- i mean, even

in the face of domestic unrest the defiance seems to be extraordinarily strong and unremitting and it's hard to conclude, i think, that iran isn't pursuing that. if they're not they're playing a -- quite a game of bluff. secondly, i'm concerned that such a statement might undermine the resolve to go forward and apply even stronger sanctions. i think that's been suggested by some in the administration that even the current level of sanctions doesn't seem to be having the desired effect. some effect, perhaps -- hopefully better. but there is some serious thought by a number of the leaders within the administration saying even this is not enough and we may need to do more. and then thirdly, i think my concern with the statement is that even if they have not taken the enriched uranium to

the point of constructing a nuclear weapon isn't it just a short matter of time delay between having the capabilities all in place and actually developing the weapon? i'm just concerned about waking up some morning and you'd have been waken up at 3:00 a. m. and i would turn on cnn and hear that iran has successfully tested a nuclear weapon capability. i just wonder if you want to elaborate on that statement a little bit because -- for the reasons that i suggested. >> senator coats, it's obviously a great question and as you may have heard or seen we have completed a -- what's called a memorandum to holders which is an update of the 2007 national intelligence estimate that was done on this very issue which is scheduled to be briefed to the committee staff this afternoon and right now scheduled to be briefed to

members the week of 14th of march. i have the national intelligence officer who led that update present here today should you want to get briefed. i think, though, the direct and fulsome answers to your very relevant and pertinent questions would be best addressed in a closed session. >> all right. well, i'll assume -- i'll tell you what i'll do. i'll set aside my reaction to your statement assuming that perhaps there's more to be learned about this that might better clarify that statement. >> yes, sir. that's -- the statement represents what, you know, we judge we could say publicly. there obviously is much more detail that underlies that statement and i think that you should hear that -- >> senator, the briefing -- >> madame chairman, i don't

think i should go any further down this road. >> the briefing will be classified -- >> i understand. >> -- so you will get everything you need. >> i understand. i just, for the record, wanted to clarify your current thinking on the public statement that was made. and i thank the chairman. >> thank you very much, senator. senator conrad, next. >> thank you, madame chairman. and i'm new to the intelligence committee and i just want to say how impressed i am by your leadership -- >> oh! >> -- and by the way you and the ranking member work together on this committee. this is the way it should be. and i'm delighted by what i've seen already. i also want to say to the gentlemen here testifying how deeply impressed i've been by what i've learned about the operations that you have under way -- things that we cannot talk about. i have been so struck by criticisms in the press directed at you that you can't respond to. but the american people should

know what i've learned here tells me you have had remarkable success. i am so impressed by information that was provided specifically on egypt. truly, you know, at some point in the history, there will be a chance for the stories to be told of what you've done and it's really remarkable. i want to go back to the question of cyber, because as i look across the broad front of threats to this country, i think it's a place that's getting too little attention. senator whitehouse -- who served on the committee; who was very involved in these issues -- had a chance to brief me. he talked about the very good work senator mikulski and senator snowe have done with him on a major report on the cyber threats. general clapper, i picked up on your statement about $1

trillion in costs of cyber attacks. can you clarify? is that a cumulative total? is that private sector losses? can you give us some sense of -- >> it's a cumulative total based on private sector estimates of what they believe has been lost because of cyber intrusions -- primarily from criminals, hackers and the like. >> you know, if we put that in perspective, i mean, this is a staggering, staggering number. a trillion dollars in losses because of cyber attacks. and if we look at 2010, we had google reporting their announcement on penetration of their systems. we had disclosure of the compromise of classified dod networks; we had the stuxnet virus discovery. we had the report on nasdaq systems being attacked.

am not certain that there is public recognition of how significant these cyber attacks are and the threat they pose to our country. i would ask this, because i know it's very difficult in this open session for us to have a full conversation, but i'd like to hear from you how you would characterize -- witnesses who are here today -- characterize our efforts on the cyber front. >> well, it's like many things we do. good, but could be better. i think there is realization -- at least among myself and my colleagues here -- of what the threat is. i think leon has characterized it very well. and there is more to be done. obviously, the congress is very

involved in this. there are multiple legislative proposals that have been made on how to do this, so we await the outcome of that. one thing you alluded to, senator conrad, which i think is right on the money -- and senator whitehouse, former member of this committee, spoke to this, as has senator mikulski -- and that is the need -- and we have a responsibility here to do better in attempting to educate the public at large about the magnitude of this threat. in my former capacity as undersecretary of defense for intelligence in dod, i was party to a number of industry fora that the department led -- first by gordon england and carried by bill lynn, the current deputy secretary -- who, by the way, has been a tremendous proponent for doing this -- just focusing on the defense industrial sector.

and i believe there is a growing awareness -- certainly among the principle -- the leaders of the principal industries affected of what needs to be done. and there is an emerging partnership here that's gotten better and better. but i think a point that you alluded to, which i think is right on the money, and that is the need for us to be more forthcoming with the magnitude of the threat -- i mean, with obvious due deference to security and sources and methods. >> you know, one thing i've noticed is the private sector -- they're very reluctant to have any publicity about successful attacks on them. and so that means the public is not fully aware of how successful some of these attacks have been. and my time is expired, but i'm very interested in following up

in terms of what we can do on this committee, and more broadly, in congress to help respond to what i think is a growing threat that is extremely serious to the national security. i thank the chair. >> and i thank you, senator conrad. senator warner is not here. senator blunt, you're up. oh, he is not here. senator snowe. >> thank you. good timing. >> yes, excellent. >> thank you, madame chair. director clapper, i wanted to follow up on some of the issues that were raised by my colleague senator kent conrad about the issue of cybersecurity, because there are multiple facets to this issue that, you know, exposes our vulnerability and so obviously, one of our greatest threats. and that's why i've been working on, you know, this initiative with senator whitehouse, as well as senator rockefeller and

senator mikulski. on one dimension of that that has, i think, gotten attention this week -- and i wanted to ask you about it -- and i know that you have mentioned in your testimony in the past about the degree to which, you know, we're seeing more malicious cyber activity targeting u.s. companies, that almost two- thirds of u.s. firms have reported that they've been the victim of cybersecurity incidents or information breaches, which is more than tripled from 2009, according to what you've indicated. now, you're a member of the committee on foreign investment in the united states. and as i understand it, cfius -- as it's known -- informed huawei that they should divest themselves of the 3leaf systems, which is a california- based server company. they have rejected that and i gather they're waiting as to whether or not the president would make a determination, take any action. and he has 15 days in which to do it. i'd like to get your comments on your view of this company.

but it does present a serious problem, because obviously, a lot of american companies are going to be purchasing this technology. they have no guidance, no understanding. we haven't obviously, yet the policy to understand the manner to which -- the degree to which that they can penetrate our systems. you know, we understand the serious vulnerabilities involved and the threats that are involved. and so this is a good example of one of the problems that we are facing in this country. in addition to that huawei -- you know, there's the u.s. - china economic and security review commission issued a report in january that talks about how huawei maintains a cooperative agreement with the china development bank worth $30 billion. and as you know, huawei has been subject to numerous questions in terms of its association with respect to its management and close ties to the chinese military -- not to mention the billions of dollars of potential subsidies that makes our countries --

companies vulnerable here in the united states to that as well. so can you comment on, you know, your views on that and where do we go from here? >> well, i probably shouldn't get into the specifics of huawei, since this is a matter of some -- of litigation within the government. i would say, though, that what this highlights is the importance of understanding supply chains. and this is one of the -- well, the two-edged sword of globalization has been the interdependence of the industries -- and particularly in the telecommunications business where there's been a collapsing of these large companies as they've merged. and so the whole issue of -- rather than singling out huawei, which is just one example -- there are others -- of ensuring that our -- our

industry is aware of, in a very specific way, of the supply chain implications and what the security threats that are posed when we depend on foreign concerns for key components in any of our telecommunications network. >> well, you know, i see in the report of the commission that it not only identifies [inaudible] but i think also another company, dte. so obviously, these are major global manufacturers. so they obviously have enormous implications. now, there's a company in maine, for example, that i gather was approached, director mueller, by the fbi with respect to their purchase of [inaudible] equipment and was asked not to use that equipment. so this is the problem here as we go on down the line for a company -- you know, obviously,

they chose to go forward with it. but, you know, these companies don't have any direction. they don't have, really, the benefit until it's too late of any information. but this is going on exponentially especially with companies the size of [inaudible]. and so, director mueller, i don't know if you can comment on this particular case or not. it doesn't identify the company. but nevertheless to say that they were, you know, approached by the fbi because they had used them to purchase their equipment and had, obviously, had made a significant investment already. >> i don't think i can speak to the particular case but would be happy to get you the information and discuss it in another forum. >> i thank you. i guess it points to the issue as to how we're going to review this whole process. do we think it's working right currently, general clapper? >> well, this is related to a previous response about better

outreach, better education. if we become aware of pending tractions -- and i'm not singling out [inaudible] but any of these where there is a national security implication. i have been working this with the office of the national counterintelligence executive which is embedded in the dni staff on this very issue. how can we do broader outreach to ensure that, if we learn of them, that there are such pending transactions which could have -- again, dependent on foreign supply chain -- which could have national security implications? i think we need to do better at our outreach. but one of our problems is finding out about these transactions that are pending right at the eleventh hour. >> well, i think that that's the point. i mean, is the current cfius process working? i mean, do we need to do

something differently? and i think that that is something that, madame chair, that we need to be working on with you regarding this issue because it could get beyond us. >> i'm not really in a position to comment on how [inaudible] effect in the cfius process. i do think, though, that once it reaches a cfius transaction, that the intelligence community's views are made known. >> you're a member, though. you're a non-voting member. is that right? >> i think that's my status, yes. >> okay. but there are seven agencies -- seven departments that are involved. >> right. >> clearly, something -- i'm wondering if it is too late by the time it gets to the attention of this committee. that's something we need to look at. thank you. >> thank you very much, senator snowe. senator rubio? >> thank you. this question's for director mueller. i want to talk a little bit -- >> i beg your pardon. if you could hold up, i missed a very important member,

senator mikulski, who was next. >> madame chair, i'm the longest woman serving. thank you for helping me not to be the longest waiting. >> yes. >> first of all, general clapper and to all at the table, we really do want to thank you for your service. the fact is senator conrad said the enormous successes that we've had, the fact that there's not been another major attack on the united states of america, says something's got to be working and working pretty well. so we want to thank you for that. also, general clapper, i want to thank you for bringing the array of your intel team to speak here. usually, it's only the dni, and i think it adds to a very robust way to have all of you here. i want to focus, if i could, on director mueller. first of all, director mueller, we've been together for 10 years.

you came to the fbi just a few weeks before the horrific attack on the united states and the terrible events at the world trade center. your term expires in september. so one of my questions will be as we look at every issue of the day, whether it's a twitter revolution, wikipedia leaks, whatever, in your decade now as you are looking at it, what would you say and advise the committee are the top issues that we need to maintain an enduring vigilance over as we respond to fast-breaking, late- breaking events of the du jour? because the committee has to be in it for what are with the enduring threats and what do we really need to stand sentry with from your perspective at the fbi. >> well, if you look at -- >> well, in your collaboration with the intel community. >> if you look at the array of threats that we face and you

prioritize them, quite obviously, it's the threats from terrorism coming out of the fata, pakistan, afghanistan, given shahzad, zazi, the cases that we've had where either ttp or al-qaida have contributed to the ability of persons to try to undertake attacks in the united states; yemen, with the printer bombs as an example as well as the christmas day attacks, with the ability of individuals to come up with ingenious ways of constructing ieds to get through our various checkpoints; somalia. but then also we cannot forget domestic terrorism in the sense that militias, white supremacists -- continually in the back of our mind, there is the oklahoma city and the mcvey

that we have to be alert to. and so the array of terrorist threats are not going to go away in the near future. second to that, which is as important, is the threat of spies. and we go to the cyber, and this will lead into the cyber arena. in the days of old, intelligence officers would operate out of embassies or what have you and you'd have a way of addressing them. today, it's as easy, if not easier, to insert or intrude into various systems and exfiltrate the information you need and with far less risk to the individuals. and then the third area, which has been alluded to here, is the growth of cyber and all of its iterations. and by that i mean a criminal robbing banks, the theft of intellectual property, exfiltration of information from dod or others.

it is not lost upon us that several years ago, a group of individuals brought estonia to its knees as a result of a displeasure at actions that the estonian government had undertaken. and, more recently, in georgia, before the russians attacked georgia, it's no secret that they went a far ways to dismantling the command- andcontrol capabilities of the georgian authorities. and so in terms of terrorism, that would be a high priority, but also protecting our secrets from those governments and other individuals who want to steal them and then preparing -- particularly nsa and others -- the cyber -- i don't want to call it a battlefield -- but the cyber arena which has both offensive as well as defensive responsibilities. >> which takes me to something unique to the fbi, which is the role of organized crime.

often in the old days of either the cia agent with the tan raincoat running down alleys or trying to turn people or the old gumshoe days of the fbi, you now have essentially non- nation-state actors in the field of organized -- we're talking about organized international crime. do you see that as a threat to our critical infrastructure where organized crime through, particularly in the area of financial services -- the nasdaq intrusion, for example, where they could have done flash trades or any number of things that could have had a devastating effect. it would have been another attack on wall street, far less visible, but even more as -- equally as devastating. would you comment on the role of organized crime and the world of cyber? and is this another area where we need to be -- stay right on the edge of our chair?

>> it's an area that we are focusing on. i testified, i think, a couple of weeks ago -- i can't remember which panel -- but we focused on recent arrests we've made in eastern -- with the assistance of our eastern european counterparts. inasmuch as there is a triangle of individuals in certain governments associated with organized criminal groups, as well as with businesses, that can obtain a stranglehold on a particular supply and utilize that stranglehold to extort monies or businesses, it's the evolution of organized crime from where we knew it in our cities with the traditional organized-criminal groups we went after to criminal groups throughout the world who have much more power, much more access to governmental authority, and much more access to the capabilities of utilizing cyber capabilities to attack and obtain the funds that

ordinarily they would get by the payoff in a bar. >> got it. thank you, madame chair. i know my time has expired. >> thank you very much, senator. senator rubio. >> thank you. thank you very much. first of all, let me begin by thanking all of you for your service to our country. this is, i guess, my first meeting on this committee. i'm new to all of this. and i beg your indulgence if i ask you questions that may have been established in previous hearings or what have you. but thank you again for your service. you have a very difficult job. that being said, director mueller, what i wanted to ask was about high-value detainees. in particular, what is the primary mandate of the fbi when it interrogates high-value detainees? is it to gather information for criminal prosecution, or is it to gather information so we can disrupt and prevent attacks? >> obtain intelligence. number one is to obtain intelligence. >> in that light, then, the current interrogation techniques that are in place, are they

sufficient to accomplish that goal, or do we need techniques to go outside the army field manual? >> the techniques that we use and have been approved for use over a number of years are not necessarily co-extensive with the army field -- army field manual. but our -- we continue to use them both domestically and internationally because they've been tried and tested over years. and they are sufficient, i believe, to obtain the information that we need. >> are they -- so it's your testimony that the techniques that we have in place today get us all the information we need from the high-value detainees that we are -- >> i believe that to be the case. >> okay. and director panetta, the question -- my understanding, from the reading materials that i've been is that the cia provides backup on high-value detainees. is that correct? >> that's correct. we usually are there, provide

support, provide questions, and will work with the fbi to try to achieve the information that we are seeking. >> i'm not here to trigger a turf war, but my question is, is that the highest and best use of the central intelligence agency on these issues, or would we gather more intelligence if the cia were empowered to do more? >> look, the name of the game is to get the best intelligence we can to try to protect this country. and i think right now the process that we have in place to deploy these teams of interrogators -- cia, fbi, the dia -- is part of that process as well. when we deploy those teams of interrogators to go after a high- value target, it brings together the best resources that we have in order to try to get the information we need. so it works pretty well. >> your testimony is that it's the highest and best use of the cia, our current policy. >> i think that kind of partnership is the best way to use the resources from all three in order to get the

information we need. >> now, and i don't -- maybe this is for everyone, or maybe you'll decide among yourselves who answers this. i'm interested in afghan detainees in particular. do we have the authority we need to hold and interrogate detainees outside of -- that are obtained in afghanistan, outside of afghanistan? >> with regards to -- >> let me make this question simpler. i apologize. maybe i didn't ask it right. the uncertainty over where to hold detainees outside of afghanistan, is that impeding our intelligence- gathering efforts? >> no, it isn't, because, you know, any individual that we're after either comes under the jurisdiction of the country that they're in or, in cases of afghanistan, they're usually put into a military facility. and that gives us the opportunity to go after and interrogate them there. >> so the existing detention capabilities that we have in place today are optimizing our intelligence-gathering capabilities? is that the testimony?

>> the ability to detain them in a place where we can then interrogate them, that process works very well. >> okay. rising recidivism from former gitmo detainees, how are we tracking that? i'm not sure what efforts are being taken to keep an eye on that. i know that's in essence -- what's the latest and greatest on -- >> i think general burgess, director of defense intelligence agency, would be the best to answer that question, sir. >> sir, we have a system that has been in place now for a few years where we track the recidivism rate, and we put a report out quarterly dealing with that. and i think the report is fairly self-explanatory. it is a classified report, and it is provided to the committee and to the others. but i think the process that we have in place is a good one. the concern is always confirmed, is one of those

things that's a pretty set piece, suspected is -- you know, the devil is in the details, as i would say, where there is always some discussion on that as we come to our figures on recidivism. >> and again, if we can't answer here, i understand. i'm not asking for numbers or figures that would compromise any information. i guess the general gist of it, is this an area of growing concern? because i didn't see it mentioned in any of the statements, the recidivism rate from guantanamo. is that an area of concern for the intelligence community? >> well, yes, sir, it is. i mean, if we had one recidivist, that's one too many. so we are concerned about this, and we do track it. and that effort is a focus of the defense intelligence agency. so, yes, sir, we are concerned about it. >> thank you. >> thank you, senator. senator risch. >> i'm going to pass. >> okay.

i think we'll have one more round, and i'll begin. mr. panetta and mr. leiter, i'd like to turn to pakistan. i've become more and more concerned. it appears the isi walks both sides of the street. the failure of the country to turn over two leading -- one operator, one leader -- from the mumbai attack to india; the reluctance to go into north waziristan; the development of a safe harbor; the concentration of a number of terrorist groups in that safe harbor; the fact that pakistan has major flood issues and yet has chosen to build another nuclear weapon, which to some, i think, seems a very bad choice at this time. so i'd like to have comments

from both of you on -- and mr. panetta in particular; you go there very often. i think we ought to really understand where we are with this country. and i won't go into the, you know, failings of a government, but i think there's every reason to believe that concern is rising over what the future is going to be. >> madame chairman, this is one of the most complicated relationships that i've seen in a long time in this town. on the one hand, obviously we are involved at targeting the leadership of al qaeda there in the fata. and we do get the cooperation of the pakistanis in that effort in trying to target those individuals that concern us and that threaten this country, and

threaten their country as well. in addition to that, you know, we have gotten their cooperation on a military basis, being able to go into places like south waziristan and have a military presence there, moving some troops from the indian border for the purposes of doing that. and that has been appreciated as well. at the same time, obviously they look at issues related to their national interest and take steps that further complicate our relationship and create tensions between our country and theirs. and that happens a great deal. and our effort is to try to work through those, because, in the end, what i try to convince the pakistanis of is that we have a common enemy and we have common issues that require the cooperation and partnership of both countries in order to be able to deal with those threats. but i have to tell you that it

is very complicated and it does involve oftentimes conflicting viewpoints of how we deal with issues. >> madame chairman, i think first i would say that your citation of points are fair and accurate ones of the challenges we face. with respect to the terrorism situation in pakistan, first i would note, we still see al qaeda in pakistan being at its weakest point since 9/11. some of that has to do with what the pakistanis have done with us; some of that is what they allow us to do. but it is critical that we have really hurt al qaeda core in a very meaningful way. that being said, there are certainly weaknesses in that cooperation at times, and in particular i think the ongoing dispute that you note about the mumbai attackers, feeds into the tension between the two nations and can also undermine some of our counterterrorism

efforts, not just at al qaeda but also lashkar-e- taiba. >> you, mr. leiter, made a comment at the house hearing about lashkar-e- taiba having the ability to strike the united states and europe. could you expand on that? >> i can to some degree in this setting, madame chairman. what we have not yet seen is a history of them doing so. we are certainly concerned by some indicators we see of them expanding their horizons beyond the region. certainly they have the capacity -- it's a large organization. what they did in india could theoretically be launched elsewhere. but we have not yet seen those steps occur. i think the additional point that i would stress is they can still be a very destabilizing factor in the region. so even without striking in the u.s. or europe, a further attack by lashkar-e-taiba in india would very much hurt our

national security and our counterterrorism interests in pakistan. >> what is -- mr. panetta, you mentioned trying to work through these issues. i just wonder how effective a position that is. can you -- >> sure. madame chairman, because we are involved in obviously very important efforts to deal with an enemy that threatens this country and we're doing it in their nation, in the fata and the tribal areas, it does require that we have to go out of our way to do everything possible to get their cooperation. and for that reason i spend an awful lot of time talking with my counterpart, both in pakistan and here as well to try

to see if we can focus on some common issues. we have some common areas that we can work on. we work with them; we work with our afghan counterparts, as well, to try to develop a coordinated approach to dealing with this. at the same time, there are issues that we have with regards to how they operate, the ties they have to certain groups that concern us, that we try to work through in these discussions. i have to be part director of the cia and part diplomat in order to get this job done. >> could you speak to what the rationale is for the building of another nuclear weapon? >> i think -- >> how much of the country has been underwater and really in difficult, difficult circumstances? >> well, again, one of those other complicating issues is the fact that they're a nuclear power. they have a number of nuclear

sites throughout their country, and they have proceeded to keep up development of their nuclear weapons. as far as the broad policy implications of the economy, the politics, the stability of that country dealing with the flood damage, you need to ask them why they're not paying attention to those other problems. >> thank you very much. mr. vice chairman? >> thanks, madame chairman. general burgess, going back to this guantanamo detainee issue, the recidivism rate as i understand it is in excess of 25 percent today. that means one out of every four that have been let go, turned over to another country has engaged on the battlefield against american or maybe afghan troops. now, that's what we know. i suspect the number is probably higher than that

because we don't know all of the individuals who have gone back to the battlefield. inve -- our policy that's place today has even allowed some of those prisoners to be returned to places like yemen where we have very little control, and my understanding on a visit to yemen is that they basically were sent back to their tribal region and they have a personal obligation on themselves to support back -- to report back to us. nobody believes and certainly they haven't on their own initiative come and told us where they are and what they're doing, so they are -- basically have no supervision. we are now down to probably the real hardcore in guantanamo.

do you see any further revisions in our policy with respect to those individuals, and what -- with what's happening in the middle east today, particularly tunisia, egypt, a number of other countries -- bahrain, i noticed this morning, is the latest to have protests -- has this had an impact and reflected upon our decisions with respect to release of those individuals to any particular country? >> sir, in regards to the first part of your question, the 25 percent figure that you mention is a combination of both confirmed and suspected. so the whole 25 percent would not be confirmed by the defense intelligence agency in terms of having returned to the fight or reengaged. the intelligence people in dia

-- i would say in the community, though i'm reticent to speak on behalf of the community -- would not push back on your statement in terms of there is concern out there as we return some to certain countries that the following mechanisms are not totally in place that would make us comfortable in that, but that is more of a policy call. and then to the last part of your question, sir, i would defer because i don't think it's appropriate for me to be commenting on policy as the director of the defense intelligence agency. >> sir, if i might add, one important factor i think -- should mention is that the president suspended any further repatriations to yemen precisely because of -- they don't have the apparatus there to either monitor or rehabilitate. and with the new processes that

are -- have been instituted, that 25 percent recidivism rate -- in the last two years or so i think there are now five -- two confirmed and three suspected -- that are recidivists. now, the counter to that of course is that you need more time -- more time would elapse, you would discover these people. so it remains to be seen. there are about i think 172 detainees remaining at gitmo, and as you correctly point out, these -- and the bulk of those, from a single nationality standpoint, i think are yemeni. and right now i don't think here's much likelihood of our returning anyone to yemen, particularly in light of, as you point out, the upheavals that are going on there. and that certainly would bear on any of the other countries that are affected that we might

consider for repatriation. >> well, we've got a problem in this area that the chairman and i have already have some initial conversation about, and senator graham and i have been working on a piece of legislation that's going to be forthcoming. and the problem is, general burgess or director panetta, let's say your folks were successful in capturing bin laden, zawahiri, any other hvt, tomorrow -- what you going to do with him? >> the process would obviously involve, especially with the two targets you just described -- we would probably move them quickly into military jurisdiction at bagram for questioning, and then eventually

move them probably to guantanamo. >> we haven't moved anybody to guantanamo in years now. and, obviously, the -- there's been a move towards closure of that facility, and i would tend to agree with you that's probably the best place for anybody to go right now, the safest place from a national security standpoint. politically, it may not be popular, but certainly it is. i appreciate your honesty and straightforwardness about what you would do. >> if we were to capture either one of those two luminaries -- if i can use that term -- i think that that would probably be a matter of some interagency discussions as to, you know, what their ultimate disposition would be and whether they would be tried or not. that would -- i'm sure, if we did capture them, would be

subject to some discussion. >> thank you, mr. vice chairman. senator wyden? >> thank you, madame chair. and director clapper, i think you know that i'm going to ask a follow-up question about stephanie o'sullivan. i think we've communicated it to your staff. and let me approach it this way. you know, this, to me, is not about finger-points. i mean, this is about the american people see $50 billion going out the door in terms of intelligence, and they want to see particularly how information is made available to policymakers in a timely kind of fashion. and we got a classified response to the questions that i asked ms. o'sullivan at her hearing, and voted for her, and i think she's going to be a good person in your operation. but i want to go further and see what we can get on the public record with respect to

this area. now, i come to this almost by way of saying that nobody ought to think that the intelligence community should have predicted that a street vendor in tunisia was going to go light themselves on fire and trigger these protests all around the world. but at some point, mr. director, after that young man's self-immolation and the events of that period, it must have been clear to intelligence community analysts that this wave of protests was going to threaten president mubarak's hold on power. and at some point, analysts must have communicated this to policymakers. when did that happen? >> sir, if you're looking for a date, i would pick january 14th when ben ali, in what i thought was a surprising snap decision,

he dismissed the government. he called for new parliamentary elections within six months, declared a state of emergency, announced he was stepping down temporarily and then fled to saudi arabia. that, i think, was the tipping point, if you will. and we saw the community, i think, pretty clearly saw what the contagion effect was going to be. and those states throughout the mideast that would be most susceptible to that contagion, prominently among whom was egypt. >> are you satisfied with the way in which the intelligence community handled it? and do you, looking back now -- always easy to come back in hindsight -- are you looking at any improvements or adjustments given what you've seen -- >> well, i think the first comment i would make, sir, is

that we're not like sherwin williams paint. we don't cover the earth equally. and so, frankly, tunisia was probably not up there on our top 10 countries we were watching closely. so there is the aspect of, you know, the spread, the balance of our collection -- >> priorities. >> priorities, exactly. so, obviously, we're going to work on that. i think the notion of -- as the chairman correctly observed -- is, you know, we're going to pay a lot more attention to social media and what else -- you know, what else could we do there to extract a warning from this. but, to me, this is -- a good friend of mine wrote a piece on this. this is somewhat like an 85- year-old man who's overweight, has high cholesterol, diabetes, heart disease, doesn't eat

well, doesn't sleep well and you know their life expectancy is not very good. very difficult to foretell exactly when he'll expire, but you know the conditions are there. and that's a rough analogy, i think, to what we're facing here in predicting these exact tipping points, having insight into the dynamics of crowd psychology. the fact that the movement in egypt had no defined leader or leaders, this was a spontaneous thing fed, no question, you know, by social media. so this is a new we do need to improve our attention to that. another interesting aspect is the extent to which governments permit access to the internet or

participation in facebook. we have done a lot of work on that since then. to dick -- to me again, the tipping point, and personally it surprised me that ben ali made a snap decision and left. >> i did want to ask one question about iran before he wrap up. >> it is an important question. our job is to provide the best and most timely, most relevant intelligence we can to the president and to policy makers here. we have over the years long warned about the dangers in this region. last year alone we had about four hundred 50 intelligence reports that talk about the factors that were dangerous in the region, economic and

political stagnation, the lack of freedoms, reforms, and yet at the same time it is difficult to predict the future. the most difficult thing is to get into the head of somebody and try to figure out what that person is going to decide. we had that problem with the leaders in iran, north korea, and clearly the same issue with ben ali. i think we do a pretty good job of seeing the dangers in an area. we need to have a better understanding and better collection on these triggers, what triggers these events. there is the unmet expectations, the large increase in the numbers of youth, educated, out of work, the play on the internet. what is the role of the internet

and social networking and how does that play into demonstrations? the military's role. generally we would all say after of someone ins, a military, the government is going to be loyal to that individual. in egypt and tunisia, they were working both sides. understanding that is really important. we have formed a 35 member task force in the directorate of intelligence to basically collect on these issues. what is the popular sentiment? what is the loyalty of the military? what is the strength of the opposition? what is the role of the internet? we have to do a better job of collecting in those areas so we can have a better sense of what might tip of these kinds of changes. >> let me make a comment have

your reaction, director panetta. i am the first to criticize the community when i think we have screwed up for made a mistake, but here as we do look back, is it not a fair statement to say that your station chiefs really did have a feeling of the uneasiness in this region of the world, and virtually every country, but certainly they were not on the twitter list of individuals in egypt who sent this around. they were not on the facebook account. that had no idea that this individual in the marketplace was going to set himself on fire. that is what we missed, but i don't know how we do otherwise. my feeling from having talked to your station chiefs, in not every country, but there was a feeling on their part and they had communicated that back to do in headquarters that there are

powder kegs in that part of the world. >> absolutely, your point is correct. there were various factors that were concerned about that we now see playing out in the demonstrations taking place throughout that region. >> thank you both. i appreciate your fleshing out the information that we have now. obviously people are going to look at this as an important case for quite some time to come, with respect to how the community reacts to a surprising set of events. >> i did not want to for wrap up without getting into the iran lead to some extent. nuclear decisionmaking is the -- a cost-benefit approach. last year the administration succeeded in convincing the

international community to impose new and tougher sanctions on the iranian regime. what impact have the sanctions had on the iranian regime to date? >> they clearly have that impact on the iranian economy, which i think is increasingly affecting the average citizen. i am not sure the average citizen in iran sees it that way, but that is the effect. obviously the point here is to induce a change in behavior on the part of the iranians. >> how seriously do you think the regime is taking in the sanctions? >> i think it is clearly a factor on their mind. as the screws have gotten

tighter, they are seeing the effect. i cannot say that that has had an effect on the nuclear program at this point. >> i would add that in areas like insurance, banking, shipping, gasoline, clearly in refining, and has had an impact on the population, but the last point that director clapper made about the direct impact is one that maybe we could discuss in another setting. >> i am interested in knowing more about the effect this had on the regime. director clever, the fact that the iranian regime is expected to contain threats of instability from the iranian

opposition but that its actions have opened up a rift between can reject traditional conservatives and the hard-line conservatives. if this risk or to continue, are the traditional conservatives likely to start coming over to the opposition side? >> at this point, i am not sanguine that is going to happen. i base that on the most recent round of demonstrations on monday, which the iranian government managed to suppress. by the way, included in that suppression is suppressing access to the internet's and social media at all. these regimes have gotten very sensitive, as we have, about the importance. another thing our website is executions have spiked at an

all-time high in iran. that has a chilling effect, i think, on the opposition. the two opposition leaders for this movement, there was a vote of over 200 to have them executed. the irony is the iranian regime praising the demonstrations in the streets of cairo and other places. it is fine elsewhere. >> thank you all again for your service. this has been a helpful hearing this morning. >> thank you very much. gentlemen, thank you very much. the hearing is adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> tamara, a look at the national review magazine piece on the fiscal 2012 budget with michael tanner. also a discussion of the government's e-verify system. later a look at the geopolitical impact from the continued anti-government

protests in the middle east and north africa. that is live at 7:00 a.m. eastern here on c-span. >> this monday, visit the public and private spaces of america's most recognizable home, the white house. c-span is original documentary provides rarely seen look at the history of the presidential residence and takes you through the mansion, the west wing, oval office, and lincoln bedroom, and focuses on the precedents and first families who have most influenced how it looks today. bearing in high-definition and newly updated with interviews with president obama and the first lady and comments from georgia and laura bush. the white house, inside america's most famous home, at 6:00 p.m. eastern on c-span. >> not a discussion on the future of the middle east and its military. speakers include a former u.s. military attache based in cairo and former staff directors at

the foreign relations committee. this is just over an hour. >> good morning i am vice- president of the middle east institute. thank you also much for joining us today for our examination of the egyptian military. come on in, we have a lot of seats here in the front. when we began to plan this thought, mr. mubarak was still in power. now the question of the egyptian military, who they are, what their function is, their priorities and how they might react in this environment is more timely and relevant than ever. just to remind everybody, it was exactly one week ago that hosni mubarak stepped down, handing .ver power to egypt's military

it is amazing to think that all this has happened in just seven days. since then the military has pledged to oversee an orderly transition toward civilian rule and democracy. they have dissolved the parliament, suspended the constitution, and formed a committee to oversee constitutional reforms that they will put before a referendum in a few months. a lot of remarkable changes in just one week. egyptians are continuing to demonstrate in tahrir square. they are out there today to mark

what they called the friday of victory and continuation. it was interesting because the spiritual leader of the muslim brotherhood cavemen to lead friday prayers today -- came in to lead friday prayers today. he praised egypt's new military rule but warned that them as quickly restore civilian rule. a lot of pressure on the military to do the right thing. how will they react to obstacles in their path? all of this remains to be seen. it is a very mysterious institution. we are lucky to have with us today to individuals who know more about the egyptian military than most of washington put together. between then have decades of experience working on a personal basis with egyptian military officials, and we are very lucky

to have them here with us today. thank you both for joining us. we will start with commander englehardt. he has been director of millie studies at the army war college and at the state department. he lived for more than 10 years in egypt, serving as u.s. defense attache in cairo and then as a representative of the multinational forces. during his residence in egypt he was involved with of the egyptian military and other state institutions. dr. graeme bannerman is a scholar who has headed an international consulting firm since 1987. prior to that he worked on the staff of the senate foreign relations committee and was committee staff director under chairman richard lugar until

1984 and was responsible for the middle east and south asia. he was a member of the state department as a member of the policy planning staff as well as middle eastern affairs analyst. it is a real honor and a treat, and we will start with joe englehardt. >> thank you, and good morning. what an exciting time. kate has laid out the kind of questions that have come up, particularly in the events of this past week, and i expect you are here thinking that graeme bannerman and i are going to answer all those questions. we are probably not. in keeping with the way that mei does business, we will try to give you a little bit of background and understanding of how the military operates in some of the things that go into

what has happened over the past few weeks, and in particularly the last week and see if we can get some understanding there. i am not much on predicting the future myself. one of the problems that we have and that many of the commentators we have had speaking about the egyptian military and about things that have happened in egypt over the past weeks, a problem arises because the egyptian military is a very secretive kind of organization. an egyptian military born in a surprise attack across the suez

canal has grown up with the secrecy much heavier than most. this secrecy keeps the military, keeping its business to itself, and it does not taught very much about itself and public, except for those kind of ordinary military things, reporting very broadly on something that is going on. i think this secrecy is an issue worth thinking about, and has several consequences. first of all, there is effectively no civilian oversight for the egyptian military, particularly that of a legislature. second, what the military does is largely opaque to the public, although as we have seen, the public is very comfortable with its military and very trusting of its military. third, military officers born in

this attitude of secrecy form really 8; society -- semi- closed society which can stifle independent thought and foster groupthink. we have some excellent examples in the new supreme council of people who are not caught up in groupthink. but it is a problem that arises from the secrecy of the military. the military has a pathological fear and mistrust of the press. this last issue we have seen played out as soldiers have tried to shoot cameras away from those tanks that everybody in the world has seen in tahrir square. it poses a special challenge for the supreme military council,

dealing with the facebook, international internet revolution and the international satellite news channels. over the past weeks, as i have been watching the news commentators, we have heard a lot of viewpoints that reflect the view that was made popular in the book egypt, a military society. this book was written in 1968. it tells the story after the 1952 coup about a military asserting control over all the essential elements of society and setting out to remake egyptian society. in the 15 years of this book,

this government, this military government set about doing away with the feudal society, breaking the back of the bourgeoisie, and establishing an arab socialist day. when he wrote this book, he was right. direct military influence was pervasive in all elements of egyptian society. times have changed. increasingly under mubarak, the private sector in egypt was expanded by leaps and bounds. egypt has moved towards a real capitalist economy. this movement in this development has brought economist, technocrats, financial figures to the forefront, and slowly close to the role of the military -- eclipsed the role of the military on on military matters.

the military has become a much less significant player in egyptian politics and society than it had in the past. today the egyptian military reflects more about egyptian society than egyptian society reflects the egyptian military. there is no doubt that the military is an important state institution, and today certainly is the most trusted of state institutions. you could even say it is the rock of the state. aegis national pride and identity are embodied. it is a serious, credible military organization and people strongly believe in it. we have seen this great respect of the egyptian public for the military played out in the public acceptance of the role of the supreme council assuming the reins of government and doing everything it has done over the past week. that said, the military simply

does not wield the same degree of influence over domestic affairs that it used to. there are a number of questions concerning the military and its role in society, and we are gone to touch on these briefly, and then we will be happy to respond further to your questions. i want to cover two more issues, if i may. one of those is egypt's relationship with israel. we had a very interesting presentation on wednesday by two pollsters who highlighted the divergence between of our government and the public on the issue of israel, with the public being significantly less positively inclined toward israel. this divergence is also press of in the military, but i have

seen in my role as a peacekeeper with egypt that the military is much more inclined to the viewpoint that the board previously had -- that mubarak previously had. 30 years has built a lot of understanding and trust between the egyptian and israeli military's, and there is little inclination to change that status. there is little inclination to do away with the positive benefits that the egyptians have seen from the peace treaty. as you have seen, the supreme council has specifically reaffirmed egypt's commitment to its international treaties, and when it was saying that it was speaking particularly about street to israel. on another issue, questions have been raised about u.s. military assistance and influence with egypt. i am sure graeme will comment

further on that. the positive benefits of civil military relations, respect for democracy, human rights, are much more likely to have been the product of long exposure by a large number of egyptian officers to our ideas, rather than as a result of a few recent phone calls. military assistance provides long-term results, perhaps not quite so much in the short term. for those who want to think about what has he done for us lately, in terms of military assistance, just remember the largest egyptian force that fought alongside us in the first gulf war. the egyptian force that was sent to somalia, as are interest in that country was winding down it allowed us to make a more graceful exit.

it is worth noting that current personal relationships did give senior officers the ability to communicate directly with each other with a minimum of misunderstanding at time of crisis. i think that is the best way for us to have seen the communications that have gone on in the past few weeks. i will also say that the the jurors military, in reflecting its very strong national pride, i cannot imagine how any attempts to force good behavior by threatening assistance levels could have a positive effect in egypt, either in the short or the long run. i have a few more pages of notes here.

but let me put those aside for a moment and let graeme speak. i encourage your questions on any of a variety of subjects when we finish. thank you. fox [applause] >> i think the question and answer period is probably more relevant than anything i would say of front. the people on the council are serious people who care about their country deeply. they have committed their entire life to protect their country and to bring stability. they do not like being involved in the affairs of state. they do not want to be where they are. they went there reluctantly, but they did so because they believe it was absolutely in the

national interest of -- to do so, and they are there for only as long as they have to be. i spoke to one of the members of the council over the weekend. he was exhausted. they are wrestling with a series of problems from the beginning to end, and they are trying to address them in an orderly fashion and get themselves out of the process of running the day-to-day business of egypt. i am not saying they do not care about the national interest or that they don't care what happens, but they don't think it is their responsibility to make the day-to-day decisions. if you look at what they are doing, what have they done? they set up a group -- what they are concerned about is creating the electoral framework so they can elect a parliament and a new president and they can get out of it. the have said there will be no military candidate for the presidency. one of the remarkable changes

over the last 15 years is that have come to the conclusion that there does not need to be a military presence of egypt. what their needs to be is a president and the military needs to be there. they need to be there to intercede when events occur that threatened the stability of the country. if you look over the last 35 years, when has the military interceded in egypt? in the 1977 red riots. in the 1985 police riots, and in the islamic killings in luxor in the late 1990's. those were the only times the military came in. they restore order and they got out. that is their goal and objective now. they are not there to take over. what you see among the pressures on them, you have one group of people saying you need to get out fast. another group is saying if you get out fast and you are not

going to be there, you are not going to give the democratic party is time enough to organize and you will turn over to the muslim brotherhood and the current government, so therefore you have to stay longer. they have a conundrum. they are being told different things. they say, why don't you bring more of the people from the street into the process? they say we would like to do that, but who do you choose to be the leader from a leaderless crowd? please form a party, formed organizations, and we will bring you in. they are looking for people to do that. do they have a keen interest in what comes out? absolutely. they cared desperately about that. do they want to control the process? nope. the other problem, they are military. military people are not democratic in organization, by definition. they did not take a vote on the battlefield.

does not work that way. i remember the first time the field marshal came to washington to deal with congress. talk about a cultural shock for a person. having to go to capitol hill where everything -- you are talking to people five minutes this way and that, and then here is a man whose whole life has been discipline and organization. it is very hard for people to adapt to the differences. they are working on that. he has people on his death that are very good that. the military has looked after its organization better than any i have seen during my entire time in washington. every year they sent a delegation that goes around washington and talk to people on the capitol hill and the administration, for 40 -- for 30 years. you have a whole cadre of people who understand the congress, and when you sit down with those guys, the advisers to the

council and members of the council, they understand how this works. they may not be totally comfortable all the time, but they understand it. therefore, if you ask me and my positive about the military, i am. clearly if they have the opportunity to bring things to conclusion, to set up a process that is democratic, that is their goal and objective. the problems they face, i do not envy them. they themselves share many of the problems that the society does. if you spoke to them in the past, sat down and chatted with them about how they saw their society, how are things going on, the spread the same fears that the people did on the street. they did not like the police. they had a problem with the police, because the police were doing two things. their job was to take care of the egyptian people, to protect

the people. you cannot realize the egyptian people and do that job. second, they thought they were undisciplined and untrained. they thought they needed more of both of those things. they had reservations about the economic changes in society. this is where disagree with my friend when he said that the military was opposed to the economic reforms. this is the famous wikileaks cable. that is not quite the case. they were proud of economic reforms, because egypt had made huge progress. when you say isn't it great that some of the spanish financial papers were calling each of the next bric country and all that, they had national pride. but the reservation was over the costs in society over the way changes being made. they sat there and said yes, we see why you are privatizing

these industries, but our concern is that in the process, to make these companies to be so, you are putting a lot of people out of work. that worries us, because it has social consequences. the people who bought the companies benefited terrifically, and you created this new wealthy class. i first went to egypt in 1963, and those of us to see the evolution of how the society looks, and you see this new, conspicuous consumption in the egyptian society, on one hand the gated communities on the outside, golf courses, when people in the center of town, some of them did not have running water or basic services. it is a problem that is not sustainable in a society for a long time, and they were worried about that.

the consequence was, you eliminated the safety net. these are the subsidies that protected the port. from a military point of view, you are creating a clash with a large percentage of society that was dispossessed. that is a formula for instability and radicalism. therefore, the reservation was not because they wanted to keep the central control. the reservation was that there was a social consequence of the program, and how to buy of that against the need to do economic development. so they were worried about that. that was something they care deeply about, but they cannot address that at this point. they need to have a civilian government in place to address these longer-term problems. this is not something the

military can handle on their own. what i'd like to say is, these are good people, they are disciplined, they were incredibly hard, long hours, and their only goal seems to be what is best for the country. these people have personal ambitions and are they concerned about the institution? if so, they don't display that. you don't get that in the egyptian military by displaying personal ambitions. this is how you have someone like president sadat. when he took over, what was the assessment in washington on how long he will last? he will not last, because he does not have any personality. that is because he was no. 2. then he became no. 1 it and it was a different personality. the same thing is true in the military. this has been thrust on them.

these are people who have worked together a long time and they are trying to address issues. will they do everything right? probably not. are they doing the best they can? absolutely. will answer questions about anything specific. [applause] >> thank you very much for that inside. you were talking about how you have a military that does not want to take the reins of power, but we do have many egyptians who are suspicious about their role, and if things don't go the way the military likes, if you have elections that lead toward a more islam as governments, how do we guarantee that the

military does not take control? it will need to set up modalities' like you have in turkey where they have a national security council set up as a framework with the military is guaranteed certain powers as well as civilian institutions. the military has come in from time to time to take over when they don't like the direction of policy has been going. the see that happening in egypt? is this what we need to do to guarantee the egyptian military stays out of power if it does not receive it sees things going the wrong way? >> the first thing is, we are going to do nothing, the egyptians are going to do it their own way. we have a great relationship with the egyptian military, and because of that relationship, they will listen to us, they will talk to us and take our

advice, but they are going to ask in what they see as the egyptian national interest. if we think we can call them all the time and they will do exactly what we say, no. the more pressure we put on them, the more difficult we make their job, because they have to be nationalistic. all of these people can say let's put a fence on foreign assistance to egypt. it is totally counterproductive. it's all the results we don't want. we have to have faith in these people. this military is so different than the military 30 years ago in egypt. when we worked within 30 years ago, and you were a friend with a egyptian military officer at this embassy in washington, and he went back to cairo and he went to see him, you as his friend could not see him unless the minister of defense personally approved the meeting.

that did not trust us. they thought we were like the russians, trying to control their lives. now, in the last 20 years, thousands of egyptian military officers have trained with americans. they no longer have the distrust. they have a better understanding of our weaknesses and strengths, and they will talk with us and disagree with us and have arguments with us, but you can still see them, they are not a threat do they do not see us as a threat, but they do disagree with us. the discussions are not threatening the relationship, they are just discussions between people who are friends. you'll see the military doing the best it can to get out. they will accept the advice and listen to us, but in the end, they will do what they see as in the egyptian interests, and we on the outside cannot change that. >> we are trying to open the

floor. please state your name and affiliation. >> i have two questions. do either of you represent now or have you been affiliated with a firm that represents the government of egypt? >> i worked with the government of egypt for a long time. i have not done that for four years or more. >> other than being aegis peacekeeper, no. we were for the united states government. >> could you describe the other side of this question, the non- political side. what are the military capabilities of the egyptian military? can they defend each of its borders against external attack, either from other states or from terrorist based outside of egypt? can the defense installations --

can they defend installations, and are they capable of projecting military force beyond their borders? what exactly are their capabilities? >> let me just expand a little bit on what i have already said on that issue. it is a credible military. they are a strong military. we have seen some figures recently that they are the 10th largest military in the world. in one sense, if you are trying to work at military assistance for egypt, there are some interesting conundrums. when you say defend themselves, are you talking about the libyans who cannot cross the border, or the sudanese who cannot get to the border?

on the other side, there is a strong and durable peace treaty. egypt has a strong military. that military doesn't so much defend the suez canal against what kind of threats, one would have to ask, but it provides a very strong rock for the egyptian society. >> >> you paint a picture of a very enlightened body, the egyptian military. can you comment on human rights standards, including the possible use of torture? how about this, the egyptian

military is part of egyptian society and it reflects egyptian society. there are any number of things, corruption being one of them, where a different understanding of standards occurs. i am not talking that human rights can are should be of use, but there is a different understanding of what constitutes abuse, what constitutes corruption, and what is the government expected to do. the egyptian military directly has very little to do with society in terms of face-to-face interaction. if you want to talk in general about the military and human rights abuses, it doesn't come to that, because they don't do that. on the other hand, the egyptian military is an enforcement arm of the government, and that government has some particular views. whether or not in a given

situation we might find instances where the egyptian military was involved in practices that we would appreciate that they not do, i cannot say for sure one way or the other. what we did see of course was that the tremendous events of last friday night, or last thursday night, after that speech by mubarak, it was very clear to everybody that the next morning, the crowds were going to be out. they were going to be out in the millions, and there was a good chance that there would be destruction and a good chance that there would be real problems costs. the military was right in the middle of that. there has been a fair amount of us listening to what we want to hear about what people said in the process of this past week and as things went along, but the military said was that it would not fire on peaceful

demonstrators. last thursday night, the military was in a very uncomfortable position where there was a real possibility that there could have been violence on the street, and it could have been up to them to provide security and establish security. that was avoided. >> i would like to add to that. the question is, i saw the amnesty report from london saying that two people said they were tortured by the military. could that happen? absolutely. is that a policy? absolutely not. what is important about the military is, they tried their best to be disciplined and they tried to in this whole situation, but the stress upon these people, and they are individuals. could somebody do something that

an awful? absolutely. some of those people who broke into the police stations, which has not got a lot of possibility, it took records. they were after and they killed some soldiers, trying to provoke them. so the military has a problem of their own people being attacked in certain places and trying to keep it under control. i am sure that if the amnesty reports are true, and the military did torture these two people, i guarantee that the military officers corps is as distressed as everybody else, and they will look into it. that said, when you have a chaotic situation you have now in egypt, you don't know who is a military officer all the time. the security forces have always worn uniforms and there has always been a confusion. the average person, myself included, cannot tell the

difference necessarily between a military unit and somebody else who is out there on the street. it is a chaotic situation. i would hope that the egyptian military looked very much into the allegations of torture. they care about their reputation. >> recognizing that the egyptians don't know what is going to happen, much less us, i would like to get you to comment on some models from other countries as we try to think our way to the next debt. if one can think of the horrible algerian model, you have an immigration -- democratic election, the bad guys win. you can think of the iran model , muslim fundamentalists come to power and stay there, a major

blow to u.s. interest, or i think of the indonesian model. a slow, difficult to characterize process, a change of leadership but not a change of the system. the military and parliament became better, but there was never one distinct step, never a revolution per se. feel free to offer a different model than those three. >> this is one of these things that in my life, i have occasionally been in a position to predict when things go on. i was on the policy planning staff at the state department in the spring of 1979, and iran was my responsibility, so my record is not particularly good at predicting the future. i personally believe that egypt, because of the nature of the

egyptians and egyptian society, has a chance for more of the indonesian model. i think there is an evolution going on here. you see a willingness on both sides to talk about things and work forward. you just hope it does not spend out of control. as i pointed out before, what you have to worry about is this 40%-50% of the population that has been suffering. wended their frustrations become great? the problems egypt has to face are huge. can anybody resolved that and reform their government and face all the other challenges they have? the answer is, i don't know, but i certainly hope so. there are a lot of good people who are working to try to get to a good solution, and i think they have a chance of getting there. i hope they get there, but it will take of their efforts and our support from the outside.

>> let me add something here. when we look at the supreme council and we look at the membership, the field marshal and the senior commanders of the military, with a few others thrown in, it appears to me that there is nobody that achieved those positions based on their championship of democracy. these are good people. they are dedicated and very strongly dedicated to egypt and the progress of egypt. if i were to underline things that this military council are interested in, i would underline social justice, peace, security. as we go ahead in this, that niekro another thought out.

we had some pollsters over here on wednesday, and they did an excellent job of showing some of the issues involved in the egyptian society. one of those was that 90% of the egyptians were in favor of democracy. they found a dichotomy in the fact that 75% of the people in egypt were also strongly committed to the role of islam in government. 75% of the people in egypt bought that in fact there might be a group of religious authorities that would take look at what the laws were and have the authority to overturn laws. i have had a lot of

conversations in egypt and elsewhere in the middle east. i am struck by the question that when people start talking about democracy, we are not always entirely sure what they think they mean by this. and what kind of democracy occurs up on capitol hill and in small towns and villages through the united states is likely to be very different than the kind of democracy that finally comes up here in egypt. as we look at things, as we look at events that involved in front of us here, i think we have to understand where this military council is coming from. they are committed to a democratic solution. they are also committed to social justice, the idea of security in egypt.

>> will be egyptian military except the civilian chief of defense, and while it is true that the u.s. and egyptian military is have a close relationship, it is also true that there is a widespread us -- widespread distrust among the general populace. will there be pressure on egyptian military to back away from their relationship with the u.s. military? >> not in the near term to see a civilian minister of defense. that is not in their system. they don't believe that civilian control over the military is fundamental -- that is not acceptable at this time. maybe in the future. i would not of thought 20 years ago that the egyptian military would be an advocate for a civilian presence, but now they

have evolved to that point. >> i think the egyptian military sees it differently than we do. they see that it is a more cooperative relationship. they give a lot and they get a lot in the relationship. they will support the relationship as long as it is in the national interest. here in washington, we always say we give egypt $1.3 billion worth of aid. in cairo, they say look, we give you -- will waive some of the restrictions on capacity of the suez canal. we waive the 30 day wait -- how much would it cost the united states if you had to resupply our operations in the gulf and afghanistan if you had to go

round africa? they say this is a relationship where we are partners and we both benefit. as long as both sides continue to see the benefit, that will continue. if they do not see the benefit, it will not continue. it is not the one late picture that is so often conveyed in washington. therefore we have to be careful about that. >> will you shed light between the relationship between egyptian army and the muslim brotherhood? >> i would like to know something about the social structure of the egyptian army. is it a conscripted army? how do people into the officer corps? are they chosen from a certain class of society?

we hear that a lot of the wealth has, to the army. is that so? >> on the issue of the muslim brotherhood, i started off by saying that the egyptian military is very reflective of egyptian society. that is very much the case as far as the brother who is concerned. the egyptian military has a visceral fear of the muslim brotherhood from the security standpoint. they are strongly concerned about what the muslim brotherhood's james r.. on the other hand, -- what their aims are. on the other hand, they understand that islam is going to be part of the government. when we are talking about what kind of democracy we are going to have, it will be a democracy

with some islam in it. to what extent, i am not prepared to predict today, but it is certainly going to be one where there is a mixed bag. the military and its social structure -- it is a conscript army. every egyptian is required to serve and to sign up for conscription. huge numbers are conscripted each year. about half of them go to the military. half of them go to the police. when you saw all those guys out with the batons and the shields, those were conscripts. the central security force is a conscript force, just like the military. the military uses its conscripts for two years. in addition to straight military jobs, the military runs military

industries where it produces goods and services that are primarily used for military reasons. the officer corps is drawn broadly across the egyptian society. if we were talking 20 years ago, we would be talking about a society that saw the officer corps and the path through the officer corps as the fastest way up in society. i think times of change. -- times have changed. we have had a huge increase in the ability to get a college education in egypt. many people are seeing the business route is much more attractive. the military is not quite in the same social position it was. do you want to add anything? >> there is no question there is

suspicion. they saw the islamic fundamentalists kill a president in the 1990's, so they are suspicious. in the last 18 days, omar sul eiman met with the leaders, and sitting at the table was someone from the muslim brotherhood. that was remarkable to me, because neither of those to trusted each other. slueiman -- suleiman was the man in egypt who spent most of his life chasing the muslim brotherhood. the muslim brotherhood spent much of their loved trying not to be chased by suleiman. because of the national interest, there were willing to sit there and at the table and talk to each other. i think if you look at the group of 10 rewriting the constitution, the fact that the military took someone from the muslim brotherhood and put him on that is a clear indication that the military knows these

are an important element of society that have to be included in the process. similarly, the muslim brotherhood has gone out of its way to say nice things about the military. everybody is trying to make this work. that has to give you some hope. with regards to society, i would like to make one comment. the officers -- i think it is probably a high number of officers who come from families of officers. but i think if you go to our military academies, you will find a higher percentage of people who come from families of military officers, because of the career path they take. joe pointed out that the military officers do not have the same standing and wealth in society they did 30 years ago. their life is fairly good. it is better than the average person in the society. but their life is nowhere in comparison to how the business class is gone. there is the wealth of the new

business class. with regard to corruption, i think one would be a fool to say there is no corruption any place in egyptian society. but is it institutions or individuals? if you look at the ministry of defense, the minister came to power in 1991 as the minister. he was put in there because he was seen as an extremely honest person. he has been minister of defense now for nearly 20 years. he does not own a house. he does not have a car. that is the reputation he has of being extremely honest. it permeates down. the people around him will not want to be seen as opportunists. does that mean there are not individuals in the system that are taking advantage of it? absolutely.

but it means that the system itself tries to be honest. >> i would just add to that. part of my job in egypt this last six years was dealing with the egyptian businesses. i had contracts and arrangements with about 700 different egyptian businesses, including many of the military businesses. my experience was that the egyptian military businesses were almost entirely free of any hint of corruption in a society and the system where there were payoffs all over, particularly in civilian and state enterprises. >> do you have a question in the back? >> i am from "congressional

solutions." i have to say i am not as optimistic as you guys are. i was there a long time ago, around 20 years ago, a briefing and debriefing teams working on the ground with the egyptian army. i believe entirely that it is much more professional. they have learned a great deal from the united states and our military security assistance relationship with egypt. it is absolutely vital, and we should not ever think about dropping the amount of money we put into the egyptian military. but let me say this. the egyptian military is a very privileged class. it still is. there is still no and co core that is professional. that means there is a very wide gap between the officer class and the egyptian -- and the enlisted. what bothers me is the fact that

expectations are quite heightened. the have gotten rid of mubarak and expect good things to happen. i do not see that happening economically, or in terms of a better life for people in the next six months. i wonder what is going to happen when the starts to be these expectations put into demonstrations or whatever. how will the army react? will they actually in force control, or will the soldiers of the officers? i still have a doubt about that. >> i am sorry. i will talk about security independent of something. i do not think we can consider suleiman part of the military apparatus. what is his role?

the military have taken control with the crisis. basically, is suleiman reporting to the supreme command, or is the supreme command reporting to him? >> tex and i were in beirut 40 years ago, and i do not disagree with him on all of the issues. these are clearly challenges, and it is going to be hard. we were to pollyanna here. they have a huge amount of problems. they are working through it and there is a huge amount of good will. but i am glad i am not trying to face those problems. and they are clearly not going to address the economic problems of egypt. the one to get that out of there so that the civilian government can address it. they do not think they are in a

position or competence to do that. this is where the united states can come in. we used to, five or six years ago, give assistance on the economic side to help people make the transition while they economically reformed. their suffering and loss of jobs because of privatization. we put money into ministries to help them do that. the problem is we stopped doing that. we reduce the aid level on the economic side. a lot of it is going into consulting, promoting democracy and civil society. we did not have the resources to have a real impact to make the cushion for this transition. we are part of the problem because we moved away from that. suleiman is not there. the council is running at, in fairness. >> i have two questions from the overflow room about the economy and the military.

can the military be a stumbling block to egypt's liberalization? will they try to guard their economic privileges? that is from the german embassy. what about the military officers running many private industries? well retired military and industry move to get more of the pie? the military getting more of the pie and blocking civilization to guard their own economic privileges. >> i think we have to see where the military privileges are. this is part of the answer for you, in context. military salaries have stagnated over the past years. as already indicated, the new business class has blown far away and above the military in this society.

the businessmen and financiers live in the villas. the military lives in apartments. they are in a comfortable place in society, but not the same place that malik was talking about. there are officer clubs. there are perks. those are probably better seen today in the context of a military where there have to be some additions to celeries -- to salaries which have been stagnating for years. the military is comfortable, but it is not in an overwrought place in society at all. the second question about military businesses -- the military has been running a number of businesses. where those businesses are today generally is, for example, the military food industry and the

military water industries. they produce those kinds of goods for the military primarily, although they do use areas where they have economic advantage to sell into the civilian market. i do not know. i have done a lot of business with the military in this regard. i do not know any part of the economy or any sector that the military is involved with where it is anywhere near even in major player, much less dominant in the society. it would be hard for me. let me reassure -- but almost made a prediction. i want to be careful about that. [laughter] let me refer back to something that gramm said earlier. i am not at all sure that the military wants to do anything other than get out of what they are in right now, as far as running the business.

i cannot imagine that they would be interested in running the economy, or taking on the issues of entitlement. we used to joke, and tex probably join us -- who would want to be king of egypt and take care of all those problems? i think the military is smarter than that. >> about the industries -- currently, the way the military takes care of themself -- they do not want to be dependent on buy supplies from the civilian sector. they raise their own chickens and secure their own water. that is important. it is their autonomy and security. if they do make money in the private-sector, if they produce more bottles of water than they consume, the money generated there is used in the military budget.

it is not going into the pockets of the guys running the factories. it is just a way they can stay on budget. i am sure our pentagon would love to be able to have its own source of revenue where they did not have to go to congress every time. this is how they see it. this is what they do. is that democratic? is it popular control? absolutely not. but is a correction? know. it is just a different system. >> i am an independent consultant. in egypt, you seem to have a military regime. demonstrators were asking for the downfall of mubarak and an end to the regime. but the military has taken over. the regime is in going anywhere. the military is still -- is going to be a military state in a lot of ways. what hope does that give us for genuine ch