we need to make sure we use all the resources available, especially if people are coming with skill sets developed in the private sector. that is critical. on the reportso they understandy did it, as well. >> -- as they get it -- and they get it, as well. >> striking a balance between privacy and continuing to be certain there are robust divisions. and that we are respecting the rights of americans and protecting individual liberties. thank you for your answers. >> i will be chairing the remainder of the hearing, so that means i will be your to the end, so to expedite my

colleagues -- i will be here to the end. we will have senator klobuchar, then senator blumenthal, and then senator franken. >> i have heard time and time again about the concern of the cyber attack issue, and i certainly have seen in a much smaller way as prosecutor for eight years just been growing, escalating number of cases we had of having data hacked or stolen. how they could work with the larger bill, we are working on. senator hatch and i had a bill aimed at child pornography which

would require the retaining of information. this is information that the providers already have an already retain, but some providers, we have learned, keep it for longer periods. the bill would require a longer period. it would simply mean that if law enforcement seize illegal activity on line, -- if law enforcement sees illegal activity online, they can then go to the service provider, and they would need a subpoena. it seems to me this could be an important reform, not just for child pornography cases but for the other types of crimes we have been talking about today. i do not know if any of you would like to comment on that. >> yes, senator, thank you.

we agree that this potentially impacts a whole range of cases, including child expectation -- exploitation, gangs. we think it is a significant problem. we do not, unfortunate, have a clear administration position -- we do not, unfortunately, have a clear administration position. it is a very important issue. >> yes, senator. digital crime scenes tend to evaporate more quickly than traditional crime scenes, so preserving in this is an important part of any kind of investigation, so we concur with mr. baker's comments that some kind of attention would be valuable -- some kind of retention would be valuable. >> bringing down the cost of

data storage for consumers and businesses alike. however, we have to make sure that our laws are keeping up with the new technology. this represents a unique challenge, the way the data is accessed and stored in the c loud. so we are looking at how we can make sure that those damages can be proved when you are dealing with a cloud -- the cloud. i do not know if you want to comment on that. >> again, i go back to the crime scene. it is much more difficult to solve than to get evidence from a traditional crime scene. to make sure we respond to an organization that is storing information in a cloud -- in the cloud, making sure they can access that information quickly.

i go back to what i said about digital information that pretty much more quickly. that they know the lay-up or the typography of their information, and the other challenge -- that they know the layout or the top biography. this is out of the jurisdiction of the united states. >> that is why we are trying to put in your some other structure for countries to work together -- put in here some other structure. do you think these are severe enough to have a substantial deterrent factor?

they receive significant jail terms, and that is a deterrent for criminals to conduct these types of activities. if you look at the report, we see a larger number of intrusions' occurring right now, but we do not see as many large scale intrusions that we have seen in the past. -- as we have seen in the past. to get a statute like the computer fraud and abuse act up to par with some of these other ones we believe will make a deterrent against criminals who are undertaking these types of intrusions. >> and then one last question, mr. chair, if i could. espionage is clearly a drain on the american investment in our country, our talent, whether it is blueprints, the manufacturing facility set up, -- set-up.

does this adequately combat the problem? are there more things that we should be doing as we look away from the cyber attack on government and look into what has been going on -- the cyber attacks on government and look into what has been going on? >> we fully support efforts that we're trying to address the type of crime that you're talking about is we are very concerned about it, as well. it would be effective for addressing this type of crime, but if there are things we should focus on, we would be happy to work with you on that. the theft of our intellectual property is a very, very significant theft to the

country. >> going after people who are working on these issues? >> the group's go after a lot of different people working on the whole range of issues, and i guess refer to special agent --tina's -- martina's martinez. >> a lot of these types of attacks have been reported in the media, and a lot that have not, so i do not think anyone is immune to this type of cyber attack. >> thank you very much. >> senator friggin -- franken. >> thank you. in recent cases, it is argued that the violation of a website term of service or the employer computer use policy can constitute a federal crime under

the computer fraud and abuse act. in other words, under this interpretation of the statute, people could conceivably be guilty for a federal crime for checking their gmail if their employer's computer policy prevents them from using that. people do not read those policies, and as you know, they can be long and perplexing and full of fine print. do you not think it would be good to address this in updating the statute? >> as i said earlier, senator -- thank you for the question. we are happy to work with people to address these kinds of concerns. i'd think the challenge is to address these kinds of concerns and at the same time not create a kind of loophole that would create a situation where somebody who worked at the irs,

the u.s. passport office, or a bank to take these and misuse them for some purpose, either to spy on somebody they know or to take impact -- or to take something. this insider case where somebody violates the rules of their employer, using a computer, it is a very challenging thing to address and is at the same time addressing the types of concerns that you suggest. the difficulty is we have to think about how and whether we should have a regime that is parallel to the actual physical one, so if the employer says, "you can use the petty cash for certain purposes and not for other purposes," and somebody takes the cash and uses it for something they are not supposed to, we would process them for fraud -- prosecute them for fraud. there are rules about what can

be done with their resources, and we want to figure at how we went to differentiate between the cyber world from the figure -- from the physical world. we have heard loud and clear what the judges were saying. in one case, we decided not to appeal. >> thank you. again, mr. baker, i know this is not technically the subject of the hearing, but since you are here, i want to ask you about be administration's data bridge proposal. the administration -- i want to ask you about the administration's data breached -- breach proposal. i was surprised to see the definition of sensitive, personal, identifiable information did not include an individual's geo location.

today, many have records of where a smartphone has been over months. in my mind, that information can be more sensitive than once home address, which is covered in the legislation. would you include geolocation? >> we would have to look at that. in terms of doing it direcececec we would be open to that. eyewitness note, because we have looked at -- just a note, because we have looked at geolocation, the department would be happy to work with you

on that. >> i also noticed this proposal gives companies up to 60 days to notify their customers of a breach of their sensitive, personally and identifiable information. that period seems long to me. a criminal can do a lot of damage when somebody's social security number in two months. why do we not have a shorter deadline for notification? >> i think on that, as well, senator, i would be happy to work with you. there is invariably some lag time. there would be a breach. it might take some time for the company to become aware of it, and then you might want to have time or the company is required to go to law enforcement and decide whether we want them to report. we may have an undercover operation going to try to target people, so we have an operation. we just do not want them to know we are on to them, so we may in

a particular circumstance ask the company to hold off on notification. so we want some period of lag time. the trick is to find out what that is, so i think we would be happy to work with you on that. i do not think there is any magic with that 60-day number. >> thank you. >> senator blumbenthal? >> thank you. i want to set in the concerns just made by senator franken -- i want to second the concerns. it seems to me that an exception can be carved out for that kind of specific, and i do mean the explicit and specific law enforcement activity that justifies the delay, rather than having a blanket 60-day period, which seems excessively long.

i was very interested and impressed by your comments on infrastructure vulnerability and potential assaulted -- of salt -- potential assault. we hear a lot of talk about potential cyber attacks. should there be a stronger requirement for those facilities or companies to take proactive and preventative measures? right now, it seems to me, if there are any provisions, they are egregiously weak in light of the responsibility of those institutions, so i want to know if you would care to comment on that. >> yes. i think that is addressed in other parts of the bill, where

the role of the department of homeland security with respect to helping to set standards and then monitoring compliance with standards, i think that is more of a direct concern, a very legitimate and correct concern you have with respect to that. i am not sure. i have to think about it. i am not sure if this would be addressed, but i think the larger concern about the critical infrastructure -- again, the whole point of all of this is to prevent anything from happening. it is one thing to prosecute after the fact, but we want to prevent things from happening and deter activity. we want to make sure that people have appropriate means in place to protect themselves. we would be happy to work with you in any way that would be reasonable that would further those goals. >> i agree that deterrence is one way but not always an effective way.

you mentioned extortions, the potential penalty of three years. it may not be enough to deter someone. >> that is right. >> to other parts of the federal government proposals include penalties, either civil or criminal, for the failure of the infrastructure institutions to take preventative measure? >> they do not include criminal provisions. criminal provisions or penalties for failing to take these measures. i think the item -- the issue was to have a lighter touch to get them to enhance their cybersecurity. i do not think that is part of the proposal. >> what about civil penalty? >> same thing. it was not to incurs civil penalties but to provide appropriate information and disclosure -- it was not to incur civil penalties.

>> my question to you. taking a broader view, i realize it is the department of homeland security, not the department of justice. if there is no remedy for a failure to take the measures, i wonder how effective the standards and advice and counseling would be, given the economic pressures, and given their relative lack of specification in this area. financial institutions are much more likely to be deep into this subject because of the nature of what they do. their entire business is conducted with computers, and so, they are familiar with making those -- and more so, other infrastructure, every day, where smart energy use involves this kind of work, but i guess my point to you is that i think we do need to consider some kind

of stick as well as carrot. >> i agree, senator. i think there are existing incentives that some folks just have not focused on. for example, there is a loss of goodwill with your customer is when you have a serious breach. you are losing your intellectual property. this may be something that the sec is looking at. or should look at. i think others have suggested that, i think senator whitehouse. they do not seem to be effective because we still have a very significant problem, as you suggested. >> and my time has expired, but, again, i thank you, and i would

suggest that if we are concerned about the infrastructure vulnerability, maybe those incentives are not working as well as they should. thank you. >> mr. baker? >> thank you, senator. a quick question. the meaning of the cloud. >> i would have to look at it. i could pull up the definition of a protected computer, but because it generally includes any computer connected to the internet, the cloud itself and in particular cloud -- and a particular cloud provider would be included.

>> in cyber time, a generation or so, it dates back to a time when it was assumed that data was actually in a computer. since this is no longer the way this works, i just wonder that you may find that you run into a definitional problem, particularly if criminal statutes are intended to be narrowly construed. >> something called "the cloud," we need to make sure we define that appropriately. >> where do you think this will be under this provision of law? >> we face substantial threats, and i will defer to special agent martinez. there are domestic actors as well as international. as you know very well, there is a very substantial threat based

overseas. >> it worries me to go back to question.leahy's you said there are 230. where did you get that number? are those assigned to the u.s. attorney offices who are designated cyber? >> yes, those are folks at main justice who are dedicated to this type of activity. it does not include the child exploitation prosecutors, because they are dealing with criminal activity on the net, as well. >> the designated prosecutors are doing other stuff. >> absolutely. >> so the numbers in terms of what everyone to call it, fte, it is actually considerably less than 230, because these cases very often involve overseas activity -- you have added a

week ago -- added a rico part. these types of cases are complicated. i do not know where they have department oversight. a corruption case and you are a u.s. attorney, you have to check in with the department of the time on that, and that is a lot of effort and work and burden to the case, probably with good reason. how closely does the department supervisor and require engagement with the u.s. attorney's office that is prosecuting a cyber case? i mean, if you are doing one type of case, you are on your own. where in the spectrum is this in terms of the department requiring back and forth with the u.s. attorney's office? >> just a quick part on the rico

part. it would be subject to the same oversight, so just to make sure that is clear. >> yes. >> would cyber crimes, there is a range. some u.s. -- they are in large offices, so they consult with main justice as needed. other districts where they do not prosecute the cases as much or one into this activity as much, they are going to rely extensively. >> they can run with it on their own without a lot of intervention by main justice. >> that is essentially the case, yes. >> still, when you divide the 230 down to the people who are actually doing something different, when you look at the complexity of rico cases, of

chasing people down internationally, probably having to coordinate with our intelligence services to get information about the foreign bad actors, i just continue to worry that we are sorely understaffed for this. how would the department evaluate a risked of a cyber attack on the country -- i evaluate their risk of a cyber attack -- how with the department evaluate the risk -- would the department evaluate the risk? >> the threat of addressing a cyber attack is very high on the list of priorities for the nation, not only for a bit department of justice -- not only for the department of justice. we are very concerned about that type of thing, so it is very

high on the list of priorities. >> there are tens of thousands of attacks. china, other places, there is an immense amount of fraud and crime that takes place. you are going to the base line together with the risk of a really significant, knocked down cyber attack on the country -- knock-down cyber attack on the country. the hazard of alcohol, tobacco, firearms, and explosives. >> as you know, there is a huge problem, and with many elements. there is an onslaught of attacks, as you have described, every day. there is an onslaught of intrusions and computer activity, malicious activity, all of the time. whether something is an attack and not, let's put that aside

for a second. -- whether something is an attack or not, let's put that aside. it is also important to make sure that we have in place when we catch someone the appropriate penalties, the appropriate language in the various statutes to make sure that someone does not get out on a technicality and something like that. to make sure we have the statutory structure to address the crime. what we need to do then is go after the criminals, and we need to have all of the kinds of resources that we have been talking about today, the secret service. >> i am just worry that we are going to pass this bill, and it will go into effect, and we will pat ourselves on the back for having done something good to protect america from cyber attack and cyber crime, when, in fact, we have done is overlooked resource disadvantage that we

have put ourselves and at. >> the threat from counter- terrorism since 9/11, we have not just on one piece, we have done a whole range of things since then. we need to dedicate ourselves to that kind of effort for a long period of time in terms of dealing with this type of cyborgs' threat. the adversaries have significant resources themselves, and we face substantial risks. >> when there was a confirmation hearing, he listed the threats to security. number one -- number one was cyber. i want to follow up on the question that i think senator franken asked. criminalizing, violating

contracts with your provider. when you were asked that question, you responded with the example of somebody who was stealing large amounts of petty cash. i would just suggest to you that there is a difference between stealing petty cash, which i think every american understands that stealing cash is a bad thing to do, with violating the terms of fine print in contracts. i do not think there has ever been a society more bedeviled by fine print in contracts then america is right now. the average american has so much fine print in all of the computer programs they download, in all of their service agreements, their cell phone contracts, wherever you look, whatever you do with the bank has pages. your credit card agreement is probably 20 pages long. americans are tormented with fine print.

i do think it would be very -- for the departments of justice to put out a proper, solid policy that would reassure americans that it is not the department of justice in tension in pursuing these criminal offenses to go after somebody -- it is not the department of in pursuingtention these criminal offenses to go after somebody who is not in compliance with a contract, multiple pages long, and the average person does not even read it. i think you want to be out of that business, and i think the cases that raise that question really throw the department prosecution in this area and activities in this area in a pretty bad light. it has had lots of attention today. it is a tension that i do not think you need, and i think

there is a clear difference between going after somebody who goes into the petty cash drawer and takes money out, which everybody knows is wrong, and somebody to send an authorized email or access is a program that they are not supposed to -- and somebody who sends an unauthorized email or accesses a program that they are not supposed to. if it becomes a federal crime to violate the fine print of all of the numeral contracts -- all of the innumerable contracts americans have now. >> i would submit that consistent and pursuant to a result of this committee, in particular, that we have not done that.

-- pursuant to this committee. people goading a 13-year-old girl to commit suicide. it is understandable that law enforcement would take a dim view of that and try to look at the full extent of a lot. in that case, as i noted, the judge disagreed strongly. i do not think it is accurate. we understand that types of things you have mentioned. we get that. we understand that completely. what we're trying to do is find a way to address those concerns and at the same time not let people off of the hook who are in siders in particular cos. the key thing of this term is -- who are insiders in particular

companies. the key thing is not to let off of the hook somebody who works at the irs, the social security administration, you name it, or some bank, to go in, take information, and misuse it for some other reason. a clear policy statement, maybe that would be helpful. >> i think you are better off doing it by yourself rather than congress looking at a moving line. i have gone well beyond my time, which i have been able to do because nobody else was here, and i want to express my appreciation for the work that you and the secret service are doing in this area and to you, mr. baker, for the work the department of justice is doing and for your long and very meritorious service to our country in this area of national security.

as you know, i continue to believe that we are sorely under resources to in this area -- under resources to -- resourced in this area. putting this up against, say, the drug enforcement administration and major organizations that are working diligently and properly on threats to our national security and threats to our well-being, those are probably no greater than the threat we have from cyber crime and cyber attack. there is a huge disconnect, and i would urge that you and the administration ramp up with a more energized proposal with how we can go after these thugs, particularly bearing in mind how immensely complicated each one

of these cases is going to be as we have to track down people in foreign countries and work through all of the complexities of engaging with foreign law enforcement authorities and dealing with the rico statute. these are not easy cases, and they take an immense amount of work, just to do the forensic preparation of the case, so, as i said, message is good job on the statute. obviously, we are not going to agree with everything. we do need to improve the statute. we have got much more aggressive about this. i know that individually, everybody is doing a wonderful job. it is not your fault that there are not more people doing this,

but i think it is important for congress to act in this area. thank you very much. we will keep the record open for one week, and if anyone cares to add to it -- we are adjourned. [gavel] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> tuesday, former executives of news corp. testified in british parliament about the knowledge of phone hacking by the media company. that hearing is next on c-span. later, a forum on the current terrorist threats and the wall u.s. intelligence plays in combating those threats -- and the world -- role u.s. intelligence plays. >> expending the focus to include a jobs plan. tomorrows "washington journal." we will also talk to joe barton about the jobs, the economy, and the president's speech before a joint session of congress, and later, a look at the unemployment insurance program. george wentworth is our guest.

"washington journal" on c-span. and later, on c-span3, temporary assistance for needy families, a program that was created as part of the reform law. a subcommittee hearing gets underway at 2:00 p.m. eastern. >> this weekend, the 10-year anniversary of 9/11, on the c- span networks, which live coverage from new york city, shanksville, pa., and the pentagon -- with live coverage. here is the schedule. flight 93, the memorial at 12:30 p.m. at 8:30 a.m., the world trade center. and on c-span3, honoring those who lost their lives on flight 93.

9/11 remember, this weekend, on the c-span networks. the day after the 9/11 terrorist attacks. this weekend on c-span3 on "american history tv," senators. on "american artifacts," recovered items. also this weekend, from lectures, a university professor on how changes in the first half of the 19th century led to the birth of the women's rights movement. get the complete schedule at c- span.org/history, and you can get our email directly to you. >> next, a british hearing on the media phone hacking. two senior executives said that the chief executive of news

corp. had knowledge that phone hacking was widespread that the company. mr. murdoch has denied these claims. the hearing is about two hours. >> the second part. can i start by asking you? following the committee's session. james murdoch and rupert murdoch.

can i first of established that both the view, -- >> that is quite significant. >> perhaps i can just explore that. i think you have said -- >> that is correct. >> in your mind, until you are made aware of this email, there was not reason, in this email was presented. we are going to have to settle. >> yes.

this was formulated. this e-mail transcript, yes. >> the company you were working for a while the settlement was going. -- for while the settlement was going. when you appeared before the committee in 2009, and we discussed this email that you said people did not remember -- from the servers, operated by the newspaper, and therefore did not seem to be that important. >> i do not think i ever said it was not important.

we made it absolutely clear to this committee how important that email was during the last time. he effectively dispensed with the other two. the other was given to the committee previously. that was the account as he then knew it. that is the document that has arisen. one of them was the email. questions about that. we did not, we did not underestimate or mislead you or anyone whatsoever. >> do you regard the mere existence of the email evidence that phone hacking was taking

place? >> i said that during the last occasion. it seemed that it went beyond clive goodman. >> your conversation with mr. murdoch. >> we had a second case that we had to explain to mr. murdoch. i cannot remember the details of the conversation. the conversation lasted quite a short period, probably less than 15 minutes. it was discussed. exactly what was said, i cannot recall.

i have been reminded sense that there was a very good reason for that, which i have forgot. coming into the building for me, it just to me, -- for me, just remain -- to me. i think that was probably insisted upon by gordon taylor. his lawyers were very, very sensitive. >> a redacted version. you could have demonstrated how important this was.

>> i do know i discussed it with him. >> what is your recollection? >> mr. crone came to me after the conference and explain it to meet -- to me the evidence that was presented by the legal team. clearly, it was something that we would need to take to the chief executive. i said i did not know whether james murdock was available. as it turned out, he was not in the country or in the office that day. my secretary called the office, and i think in the afternoon, mid or late afternoon, we went to see him. mr. crone came sometime after, and we went to see him in the

afternoon. >> can i turn to the letter that clive googman sent? in that letter, he suggested that this should not come as any surprise. were you aware that was going to be his argument? >> i did not know about that letter until quite recently. to the best of my recollection. >> one of the key points that he makes in the letter is that this should not come as any shock. >> he certainly make that

suggestion. >> did you attend the meeting? >> i attended one conference that he had, and then on the second occasion, -- the entirety of the meeting. that was relayed through a solicitor. the solicitor said that i could come in at some stage, and, indeed, i was sitting outside, and i came in. >> every meeting? >> yes. it is also -- that i heard him say anything about what everyone else was doing was common practice. that was not mentioned. it was not put forward in court,

so it was not part of his defense. >> mr. cloak, did he not come and say, "i have this letter"? >> i cannot remember. we did have a conversation at some stage about clive raising the allegation in his appeal of his dismissal. i cannot remember the exact -- one is that i am supposed to know, and the other is that i am supposed to accept -- to keep your mouth shut, and you keep your job. i can remember it both was mentioned -- were mentioned or if one was mentioned. i said i did not agree that was true.

>> coming to the second suggestion, which you just referred to. tom crone and the editor, coming back to a job at the newspaper. is that true? >> no. >> mr. myler, is that true? >> i was not there at the time. i arrived at the newspaper at the end of january 2007. they would be sent to prison. >> nobody said to you, well, actually, he could have the job back? >> no. >> in your mind, there was never any suggestion at any point? >> no. >> i do not think the editor

being referred to is mr. myler. i have no idea what was said to mr. goodman. but mr. coulson had conversations with me on at least two or three occasions, where he said, at the end of all -- of it all, when clive had served his sentence, paid his funds, whatever was, -- whatever it was, he could come back and work for the company. in such a capacity. now, when i spoke to clive, i

had meetings before and after, rather hanging around -- andy was hoping. he foresaw that he might be going to prison. he was quite pessimistic, worried about his family. now, i was able to say to him that he could find a way that he could come back to the company. >> but the chairman of the company -- >> once you had served whenever sentence -- whatever sentence. >> before and afterwards? >> after words. after sentencing. i was very annoyed. >> so these conversations came

-- took place before sentencing what -- with goodman? and this was entirely andy coulson feeling sorry for him? did you have any knowledge as to whether or not andy -- >> no, i did not. >> and did you say to andy coulson that that was something you thought he could succeed in? you did -- the fact that you mentioned it to clive goodman, that at least suggests that you thought it was not impossible. you thought the company might relent and take him back?

>> to tell the editor that clive goodman was guilty? >> i am not sure i came away with any decision. sometime afterwards. yes, i think i knew that he was going to plead guilty. >> when did you think he was guilty? >> probably when he said he was going to plead guilty. >> when was that? >> it was before he pleaded guilty before the hearing.

>> this is an offer, was not to >> yes. >> to accept the offer. he pays this, even if he wins. is that right? to refuse this type of offer means taking the risk of paying possibly hundreds of thousands of pounds and costs, even if you win the case? >> you take the risk of paying the cost. >> james murdoch. when you settled with taylor, the highest award ever made in a british court for breach of privacy was 60,000 in july 2008. it was on that basis that you were told to offer taylor 50,000

pounds, was it not? >> i cannot remember. >> that offer was rejected, and you therefore put 150,000 pounds -- is that right? >> i cannot remember. i cannot say. it sounds right. >> are you not aware of making the offer to tailor? -- taylor? are you not familiar with that case? >> july 2009. when it was settled in 2007. >> when did you last review the taylor filed -- file?

what on earth were you doing for two years? you are the legal director of the newspapers, and are you seriously telling me that you have not reviewed that file in over two years? >> not in any detail. there are other pieces. each of those were being dealt with on an individual basis. >> let me take you back to the offer that you cannot remember. given the time, the officer would have afforded newsgroup a great deal of protection in respect to -- and as a result, taylor's lawyers would have

advised him that he would have been at risk for costs of thousands of pounds. the details of the case would not have been kept secret, what they prove -- would they? the details of the case would not necessarily have been secret. >> it depends on whatever negotiations took place. >> the same would be true if the client came to trial and the documents were public. in this case, it was the defendant, was it not, they're required confidentiality? >> that is not my recollection. i think it was raised by the other side first. >> confidentiality? did you discuss that with anyone?

>> it was discussed internally and with outside lawyers, yes. >> let me ask you question. this is why they asked for an unprecedented 1 million pounds towards costs. >> i do not know where you got that figure from. >> you did not know that they asked for 1 million pounds? >> no, i actually thought they had asked for more. [laughter] that was part of the process. >> so would it be reasonable to assume that you wanted confidentiality, and then finding out somebody wants 1 million pounds from you? so despite this demand, and having received advice from legal counsel that the most mr. taylor could possibly hope for

was 250,000 pounds, you agreed to pay mr. taylor 425,000 pounds in damages? >> it was 425,000? or was a 415,000? -- or was it 415,000? he had a huge range. >> if you were not concerned about the publicity that would result of the facts becoming public comment the phone hacking republic, the phone hacking, you would not have changed it to 45? context was after the

general sentencing five more charges were leveled. taylor was one of the charges. [inaudible] in the aftermath of the sentencing hearing, only one of the five issued civil proceedings for the newspapers. was mr. taylor. my job is to give education in the most beneficial way. if you can avoid education coming in, that takes steps to avoid becoming in. he was one case. we were risking four others

coming in on top at an enormous cost. it would have to pay way in advanced for mr. taylor especially if there is a confidentiality clause. it was asked for. that is a good course of action. if it is 415, thereby you manage being sued by four other people. he may have similar high demand. that is the right decision to take. >> you do not except the confidentiality was part of the deal? >> no. . if you read the records, you will see that is the case. >> you categorically denied confidentiality as a factor. the last time we gave evidence

to this committee. that was the last time you reviewed the file. >> out have to see the sequence of questions and answers. >> did you mislead the committee? >> is it a fact that the reason for do my colleague has it in front of him. -- is it a fact that the reason -- my colleague has it in front of him. would you read this? >> what basis was it decided to keep the proceedings secret? secret is not the word i would use. this was a breach of confidence and privacy. every single case against it is a breach of privacy unless it was out in the public domain.

i think he mentioned it first. it was raised by us. we all started with it. the judge will order its. >> that is enough. that is enough. we know it says that the fax you give as in 2009 differ from the facts you have given today. >> i gave evidence that confidentiality was a clue. >> you said it had no part of your judgment. >> secrecy. there's a difference between figures say and confidentiality.

-- secrecy and confidentiality. we were trying to avoid further actions coming in from the other four victims identified in your paper. >> is there a reason you paid more to the taylor settlement because you are trying to conceal widespread criminality in the world? >> no. >> did they agree because they could get a high payment? >> they agreed to the clause in order to keep quiet about widespread criminality. is that what you're saying? >> when you went to mr. murdoch, did you explain a modest offer to settle the case of? >> [inaudible] >> would he know what that offer is?

>> i do not know. >> you have had many meetings with him. would you told him that you could have settled but that would have meant that you could not provide secrecy and confidentiality? >> the settlement figure had not been arrived at. to be a demand from him was relayed to mr. murdoch i believe. what we were seeking was authority to begin negotiations to reach whatever best figure we could it cheap. i cannot remember whether he said he wanted to know. i figured it was before. we could settle with the best figure. >> no. is it the case you said you'd have to settle at a larger sum to keep it a secret? >> no.

not at all. >> did you ever raise that with mr. murdoch? >> i explained this in an e- mail. did you explain it was given in the paper. >> i cannot give this. there is only one reason. we went with him to seek authority settlements. that was the documents that consisted of an e-mail transcript being sent by one of our reporters. it consisted of a voice mail message left to and by him. >> he would have been aware that another member of staff transcribes a message.

>> did he then apply it to wrongdoing? >> no. . >> what did you do about it? >> it has intercepted the transcript message. it was an illegal act fun -- hacked phone. have you explain to want to settle the case for hundreds of pounds more than you could have gotten? >> the documents was not evidence of the report having accepted it. it was that he had transcribed from a disk. what the evidence meant was that the illegal activity in

excess of gordon taylor's messages, evidence of that had passed through our office. it is the acknowledged that he had done that. >> nobody did anything. >> we settled the case. >> you cannot remember what it was? >> i explained it being taken up to the document. i would explain what it was and what it meant. >> what did james murdoch agreed tuesday? -- agreed to say? -- agree to say?

>> i had discussed it in great detail with them. i passed on their advice to mr. murdoch. >> why did he agree to settle for so much money? >> he wanted to get out of the case. >> is it the case that he was well aware that you would buy the silence of gordon taylor itself sol -- if you settled? >> i think the priority at the time was to settle the case, get rid of it, contain the situation and get on with our business. >> he knew you would settle for that money. didn't he? >> we cannot reveal the format of the e-mail. it was given under strict

undertakings of confidentiality fa. >> let's be clear. it is used regularly. this was the metropolitan police documents coming out of their files. how can we be of use of covering up something that has first to reach this problem for greece? >>d are you aware -- >> are you ityre that a confidential leva would not stand up? you must have known that. you were a lawyer yourself. >> what confuses me here is that

you are missing what i said. this came from the police. it is not as if it has not been looked at. >> the police will have questions to answer as well. is it the case that you knew that it a crime had been committed taylor's lawyers could not hold you to it? you knew that. you are a lawyer. >> there is a confidentiality clause on both sides. it is called a straight dealing. >> did it james murdoch said you any limits? >> i cannot remember that.

it will settle for the best figure. >> it was open ended? >> yes. >> crt said it would take half a million. >> are there any other situations where he gave be an open ended agreement? >> i believe i met james murdoch twice in my life. taylor was one. i do not remember the other. >> he cannot remember what the second meeting was? could have been max clifford? >> no. >> did you send him memos? >> no. i do not remember. >> given that there is no apparent investigation, do you except that you like to is when you told us you investigated this and were satisfied with

the answers he received? no. >> e. said there was an inquiry. anyou siaid there was inquiry. >> the chair suggested this as well. you do it when a leading developer occurs. you see the evidence put before the commission. if you say this is devastating evidence and a cover up and it means that they clearly were mistaken. it is clearly contradictory. it is not contradictory. that is what i explained. i hope he will accept this. it was not contradictory. we did not contradict ourselves will be put up a statement.

i invite you to tell me whether you agree. >> [inaudible] >> i give you an answer very early. there is no evidence. clearly, the e-mail came through. that evidence existed. >> you also said that you could find no record of being forwarded to anybody. >> no. that is true. >> the impression you saw to give to us did not matter much. >> i encourage everyone to read

the transcripts. >> no. the transcript remained on the record. >> you continue to pay lawyers even when he pleaded guilty. >> it is not really surprising that we pay for this at the time. at the time he was arrested, we had no idea whether he would plead guilty or not guilty. you are going to start off by supplying the citation. that is the proper thing to do. in some states, he pleaded that he would claim guilty. i do not think that is a bad thing. what did you pay him in prison when he was found guilty? >> pay him what? >> a salary. >> i've nothing to do with that. i did not realize he had been

paid. >> what about hacking into the voice mails? did you pay him? the payoff? >> i have nothing to do with that. >> what is your view of that. >> you did not see this as a gross misconduct. >> that is nonsense. >> the only problem was that you got caught. >> that is nonsense. >> now you had to conceal the crime. >> that is nonsense. >> you have to make sure it would not become known. >> that is not true. >> that is why it so good many could have his job back. -- why you told goodman he could have his job back. >> if the as the other lawyers,

they will -- if you ask the other lawyers, they will tell you the allegation you just made has no truth. >> you promised him jobs in order to suppress criminality. >> that is not true. >> that is why james murdoch agreed to pay the settlement. >> that is not true. i did not sanction it. his legal fees are not paid in just criminal representation. when the civil cases start it, he was not cooperating with us in any shape or form. it was agreed that his finances would be -- his needs would be financed.

>> do you except it is false to say you have not reviewed the articles where it is clear the information could only have been obtained through phone hacking? >> yes. >> did you arrange for the bones of phone hacking -- voice mails a phone hacking victims? >> no. [unintelligible] >> why have been not settled already? >> i thought most people have not settled. consultation period. it is supposed to be 90 days. >> is it affecting things you can say?

>> no. >> have you discussed with "news of the world" lawyers? >> no. >> have you been in contact with jonathan reece? >> many years ago. he was doing occasional work for "news of the world" sometimes on the investigations. if we needed someone to play the role of a show for -- chaueffer or body guard, he was used. >> were you aware of this surveillance? >> no. >> were you aware he was contacted to work for new, -- 4

"news of the world" an 2005? >> no. >> have you ever been in contact with philip campbell smith? >> no. >> were you aware of any civil claims as a result of phone hacking? >> no. >> did you have any idea that the sons or indicated -- sons were implicated? >> no. >> why did you tell the committee that copland carried out eight investigation and the idea was to find that everything that had gone on? he told us they carried no investigation into phone hacking whatsoever? >> pimm he was arrested in 2006.

when i came back the following tuesday, which would have been seven days after their arrest, the first person i went to [unintelligible] they were clearly instructed by news group to deal with whatever in curries' and requests -- inquiries and requests given by the police. they were actively involved until later. >>, times have the mets-- how many times have you met with glenn? >> [inaudible] i doubt i had any contact.

>> would they have kept abreast of the sanctions with his legal team? >> i am not sure they are as much in the way of negotiations. quite a bit to keep them on the disclosure -- >> did you keep them on the disclosure team? >> i've never heard of a disclosure strategy. >> when he introduced into names ,"ople from "news of the world did he tell you who the people were? were you aware that anyone in the company was told? >> no. >> did you ever order surveillance or private

investigations to do any surveillance at all? >> i don't know actually. >> have you ever commissioned reports to look on the civil case lawyers that involves private investigators? >> let me think about that last question. i may have had an investigation a long time ago. i probably did use private investigators. maybe surveillance. maybe something else. it is not unusual to use private investigators. >> did you ever sanctioned news international journalist to persuade them to settle? >> no. >> are you aware any colleagues? >> no.

>> are you aware rebekah brooks a have contacted them -- may have contacted them? >> no. >> here is one thing he mentioned. let's get this right. after good been -- goodman pleaded guilty, mr. coulson was looking for ways for him to come back. >> he felt that the company had a duty. he felt clive, if he was

guilty and sentenced, once he had paid his sentence, he hoped him tod persuasede come back in a different role. >> it is quite a different policy. >> it was hinton in did it in order to ensure that goodman was looked after. do you think coulson had something to do with that? >> i doubt it.

>> back to a meeting in james murdoch. a couple of things i want to clarify. he says that he told me that there is nothing that led to a further investigation. is that an accurate reflection on that meeting? >> yes. >> that seems to be contrary to what you said it was for. from what you had told mr. murdoch in the meeting, he must have been aware of that beyond clive goodman. now you're saying that is not

the case? >> i thought you're asking me whether the mr. murdoch meeting -- that it went beyond clive goodman. >> was is? >> he was made aware. he was made aware of the document. >> he was saying he was not a made aware of the wrongdoing. >> that is what i am saying. >> is that your recollection? is the right? that right? >> it goes beyond clive goodman. >> in that meeting, did you make clear what the polls again begins of that document was? -- what the full effect of that

document was? >> i find it difficult. you're speaking about ambiguity. it should be incredibly clear. >> i cannot remember the exact phrases as were used. i am certain that i explained to him that the case has been dwelling on that document. it was clear that we had to get out of it. >> you did explain to james murdoch that did seem to be young clive -- seemed to be on clive goodman. [unintelligible] >> use that his recollection was

correct. -- you said his recollection was correct. your view is that you did tell him. there should be no ambiguity as to whether this evidence meant that. >> i cannot tell you on whether his par there is ambiguity. i explained the involvement. >> i think there is no ambiguity in the significance of the document that the police provided. outside senior and senior counsel, they all agreed that the significance of this document meant there are two choices, settled the case or fight the case. fight the case would have been going to a trial. in that respect, i do not

believe there is any ambiguity. the significance of the document being produced was quite clear. >> you're saying there's no ambiguity in the document. was there any ambiguity in what was explain to james murdoch the dax was made clear to him -- james murdoch? was made clear to him? >> i think there is evidence to show that at least one particular journalists may have been implicated. he denied any knowledge of this document. >> the document is clear. he was not shown the document in the meeting. is there any indication to whether this existed at all?

>> based on the facts of the outside senior or junior counsel, it is important. you do not rush into these things. the beauty time getting out cited vice. -- you take time by getting out and buys -- giving out advice. >> our understanding was of what this meant. this is crucial. james murdoch has been cleared and is written evidence - in his written evidence. it is important.

>> id seem to be clear to other people. -- it seemed to be clear to other people. >> i cannot speak about mr. murdoch's recollection of this. what i took away from that meeting is that there was an agreement to settle. that is what happens. >> in your position, you would have had to be extremely clear to him that that the evidence referred to wrongdoing. it is of great against to the company. there would not have been room for ambiguity. you and not have left the room wondering whether he understood it or not. but i did not leave the room

with any ambiguity. >> there were two issues. thee's the case and what said amendment for the company. meant fore settlement the company. beyond the settlement, there are wider issues. >> with respect, mr. murdoch was the chief executive of the company. he is experience. i am experience and what i did. -- i am experienced in what i do. i am not sure what you are leading to about what he should have said, what we should have said that resorted from that meeting. i cannot get inside. he was probably dealing with more than one thing as we were.

>> he said that the wrongdoings extended beyond it. there's nothing in the meeting that led him to believe a further investigation was necessary. he is very clear about that meeting. >> i am very clear. there's no ambiguity about the significance of the document and what options were there. one was to fight the case. the decision was taken to fight the case. as far as i'm concerned, there is no ambiguity. there was no suggestion then or now that anybody tried to conceal anything. the document was produced by the police. >> are you saying you cannot support it james murdoch's recognition of the meeting? >> of the reason why the

clarification was put out in the first place was because it was alleged wrongdoing that as a result of what mr. murdoch has said we were guilty of either concealing or covering up a sequence of events. that had to be clarified. that is not factually correct. >> in terms of the other investigations, this is a serious matter. was there ever a discussion about a full term investigation with outside lawyers? >> it was never suggested to me. with hindsight, we now know how devastating the evidence that the police had and had gathered in 2006 was not followed.

we now know that evidence that was gathered from an e-mail at a news international was handed over to the police in january of last year. there are lots of things that have come to light from different areas. if we had known then what we know now, i think things would have been massively different for everybody. >> just to compare it to the decline, say there was a process and there is a decision and a review of the evidence. you conducted interviews. in this case, you had a meeting

with james murdoch or he should have been made aware. the document meant that wrongdoing existed. the company decided to have an investigation to get to the bottom of what had happened. >> that is a result of what happens. i don't think anybody underestimated the seriousness of the document. nobody underestimated the seriousness of the decision that had to be made to settle the case. >> a want to go back to when you joined "news of the world." they gave evidence to the committee in september 2009. you had come with the two things.

[unintelligible] is there any proof that the misconduct was identified in? is suggested that there never was. there's no investigation into wrongdoing at "news of the world" as a result of the goodman commission. there are significant facts. there's never a broad range review. >> do you think you were remiss in the engagement of accidie think you should have done more? >> i will take personal responsibility for my actions. i know i did. in hindsight, given what has and the internal

evidence, i think so. if i may clarify what that under situation to be.e when they were arrested, if you look back at my testimony you will see, i understand that they were brought in to provide any evidence of the police were quiet. i think that was primarily a position of transparency that nobody could accuse news international of prohibiting. i think that if you look back, you will see from mr. coulson's testimony that at the time of the arrest it was made clear

that they had to try to get to the bottom of what was happening. they pled guilty. they were tried. they were convicted. when i came in, i investigated reforms and change protocols with in the business. the first thing i did was send an e-mail to staff within a week. i explain the significance of their response ability within the code. >> you have gotten in on this in some detail. tell us what you did. the investigation into wrongdoing. they were very specific. there never was a big investigation. criteria are in september 2011.

there have been more of an investigation that perhaps i would like to believe a. >> are you referring to [inaudible] >> i think the other thing to remember was that the police inquiry i thought at the time is very thorough. that clearly was not the case. i think they have accepted that. it was not as thorough as i believed it to be. forgive me, but if the police take away lines of evidence from his house, i would have assumed that if they wanted to talk to anybody else it would have been implicated in criminal acts, they would have interviewed them. they to chose not to.

the only person interviewed from "news of the world" was clive goodman. i am a journalist. i'm not a detective. i am not a lawyer. i would have assumed that if the police -- if you look back at what mr. heyman said at the time, i think the phrase he used was no stone was to left unturned. we would say that clearly is not the case. it was not the case. i think they have acknowledged that. i did what i thought i had to do. i did what i did. other things may have been necessary. at the time i genuinely did believe that. it was because of what the police it did in their inquiry.

-- police did in their inquiry. >> are there things that the police and not -- had not cover? he wanted you to get to the bottom of it. >> when clive goodman. , which was ape's a real experience -- when clive's .oodme goodman , that was a -- when clive goodman appeared, that was surreal. that is when the emails were looked at.

at the time, i thought that seemed like a lot. as a result of the allegations that he made, i sat down and talked to them about the allegations. they denied every single one of them. in the absence of any evidence to put before them, now we know that potentially may be evidence did exist. these are only allegations. there are people that have been arrested. i do not know how this will resolve. >> if i could go into detail. did you understand that it was very limited and was not a wider investigation? >> i had no involvement, and no

contact with them whatsoever. >> how was this explain to you that did they explain to you the e-mail review? >> i have hardly any contact with john chapman through this process. my main contact was daniel. i would like to clarify one point. i played no part in any conversation or any negotiation regarding any financial settlement that was made with mr. goodman. none whatsoever. >> going back to the meeting with mr. murdoch. did you have any conversations with them or any senior

executive news corp. that he might report to suggesting that there should be further investigations of the newspaper? has it been discussed that blacks at that time, i did not have any specific conversations relating to that. -- has been discussed? >> at the time, i did not have any specific conversations relating to that spirit i never discussed it again with james murdoch. >> i would say over the course of the last 18 months, a lot of discussions have taken place. >> going back, do you not think it is extraordinary that the agreement was settled to take

the case? everyone understood the significance of what he was being told. it was never discussed again. it never wanted to discuss its target to the bottom of it? -- you never wanted to discuss it or get to the bottom of the? don't you think that is extraordinary? >> i don't think that is extraordinary. there is some stability regarding the corporate ance ability. if anyone wants to talk about my performance, they would have come to me and said i am sorry. we do not think you are the right job. you're not doing the job at all. we want to remit the. it is a bit like a football managers perform. you say when you perform and you

go when you don't. it is very clear. if there is no gray area. it is black and white. if anybody was not that of my performance i there were dealing with the budget or staff or any other issues, and they would have told me. >> [inaudible] >> that is completely wrong. he refused access. >> thank you. you made a remark earlier that at some point you may have been

involved in surveillance. what did you mean by that? >> in civil cases, we run a story saying they're having an affair. if you believe they are, you keep an eye on them for a few days. >> in terms of the way he responded, i think ordinary people watching this committee will want to know what other eeld of activities you fil are run-of-the-mill and your team. what do you mean by a bit of surveillance? >> i think most legal firms involved in this case will have use private investigators to check out what they believe to be true but do not have evidence to prove it is true.

one is out is a personal relationships. in the history of divorce law, it is very often someone saying i was a private investigator commissi should feel proud of. people here today should take pride in the work they have done in the government or the private sector to allow this to flourish. >> before i begin the questions, i should congratulate you, the president, andy and administration. having sat in your seat for a time, i understand at a personal level the courage and the strength it took for the president to make the decision he made to invade pakistan. i do not think that people fully understand the burden on the

president and the weight of the responsibility of that moment. i speak for a lot of people in this room when i say that the nation owes him and you a debt of gratitude and we are safer for the killing of bin laden. [applause] >> as you know the credit goes to those brave operators to carry out the raid, those diligent and extremely proficient intelligence officers who were able to pull the thread over so many years. then to the president who was able to take that information in terms of what we knew but also it reflected the tremendous confidence he has in the u.s. military as well as the intelligence services. failures are talked about quite

a bit. sometimes the lawyers are attributed to intelligence. i think the president felt we did as good a job as possible as being able to understand what was happening in the compound. we basically had as much information we could get without risking the operation. at the same time, these operators have trained and carried out to these types of raids repeatedly. one of the things after the ladenf and raid -- bi n raid, people say only to the united states could do that. we have that to termination, persistence, and capability to grow to another part of the world and do it effectively. that is one of the things it we

were impressed with, that we can keep a secret. the president insisted on that. doing it in a way that led to success. it is not one person or group of operators. this is a product of work that was done or the last decade. people have been going after him for a couple of decades. it was a time of reflection, also in a time of remembrance of the victims. this was justice. this was something the people wanted and the search. >> post the killing of osama bin laden, will orchitis seek to retaliate? -- al qaeda seek to retaliate?

>> we took material side of the compound. he is trying to direct operations. it also reflected his, how much she was distanced from reality. he kept pushing for these operations but the al qaeda authorization -- authorization -- operation were not able to carry out of those attacks. i see a combination of attacks that have sat cockeyed a back lot. den, who wasa active and engaged. he was orchestrating a lot of activity in yemen.

these are the senior types who had the experience, the respect, they had the ability to orchestrate. you take them off and have a few other guys. they are still out there and we will be relentless in going after them but the senior leadership really has taken some severe body blows. we need to maintain that pressure and hopefully we're over the real speed bumps because of the raid against the osama bin laden compound. we need to do things, cockeyed in iraq is still active. they are attacking our troops street outside in the peninsula is active. they have a domestic agenda. is taking on many

characteristics of an insurgency as a push to yemeni forces and civilian government out of the southern portion of the country. did you have people who are determined to carry out attacks against the homeland. that has a domestic and international agenda. they're looking at libya and the arms bazaar that is available. the threat is still evident. the arabs spring has resulted in some people and a number of countries, the egyptians have been a close partner of ours or the years. there service who have been affected by this recent turmoil. i think the effort needs to continue. the challenges are still there. i think we put in place a good foundation and a lot of these countries that have been able to

withstand some of these political upheavals. we had a relationship with the libyan government. we had close relations now. we recognize the pnc. we rely on these countries a very heavily. why don't we capture more of the terrorists and take them to guantanamo? we capture them when they can. -- we can. he is now in united states facing trial. we now rely and are able to rely on all lot of other countries. saudi arabia, the moroccans, the egyptians and others are now doing what they need to do. we do not need to do these things unilaterally. we work with them so they can

find, detain, imprisoned the terrorists a very threat to them as well. >> one other countries take these people into custody, do we get access in custody? >> many times, whenever there is a terrorist that is captured, the first thing we do is ask for that access, in pakistan or yemen or saudi arabia. usually the countries and services will work with us. there are some concerns in these countries have if there are concerns about what the individual might do to us but i think it is important for us to be able to have that access so we're able to determine what this individual is saying, how they are saying it, not under arrest. i think, the relationships have developed to a point where we're

given that type of access according to their rule of law. >> let's go back to the post-bin laden threat. dhs issued its and 9/11 warning. there was the states department worldwide warning to americans traveling overseas. this morning the department of defense raised its current level to grovel. as americans watching this, we know there was some reference to a 9/11 anniversary attack. what does this mean? are you concerned about an anniversary attack? do you see increased fretting -- france? -- threats? >> there were a number of

security measures put in place in. now, we have seen things like in the bin laden compound. we know there have been times when they tried to take advantage of the attention paid to these anniversaries. activities are time to take place when they are ready as opposed to forcing it to take place in a day. we need to make sure we're doing everything possible to prepare and safeguard this country. so out of an abundance of caution, we have instituted a number things this week or the fbi and homeland's security, defense, the promised date, issues of alerts advisories'. we want to make sure people are aware. terrorist groups might try to take advantage of the large gatherings of people as a way to demonstrate they can penetrate our defenses.

the president has insisted we do everything possible before an anticipated anniversary so that we are in the best position to catch something before it comes to fruition. right now, if we did and have something credible that would require and advisory large, we would put that out. i think we have come a long way in assuring that information as to the american public. there are these bulletin put out about threats to general aviation highlighting the fact that a al qaeda keeps coming back to aircraft as a target. this is something we need to maintain vigilance for. >> like you, i had the privilege of working with mohammad in saudi arabia and other intelligence chiefs. in the wake of the arab

springs, where many of the government's that existed at the time i was there have fallen, and there are concerns of those -- this is an opportunity terrorist groups might take advantage. can you talk about the counter- terrorism relationships? should we be concerned they are not as strong? how you view the changes taking place? >> it was clear that al qaeda was not at the vanguard of any of these movements. in some respects exposed to the bankruptcy of the ideology is not having the resonance it had hoped to have. the impact on the ct relationships have been significant from the point is that we have had to work with new people and organizations. there is a concern in places

like libya where there is not the same control. there lot of things out there that could be accessed and acquired by terrorist organizations. but the professional relationships that exist between the cia, fbi, others, with their counterparts, those are things that in door. although there are changes in personnel, i first noted this in the early 1990's when a number of countries sided with iraq when they invaded kuwait. those relationships were able to withstand those political challenges. the ct relationships have strength in some minds that it becomes the sine que non

relationships. so there are some challenges, we need to be able to continue to work with the egyptian services. tunisia has a mixed record. even before the people. there were things they were doing that we run happy with. we need to keep pressing. yemen is a country that i am familiar with. i have been out there numerous times. i can say today that a counter -- counter-terrorism cooperation with yemen is better than it has been. that is a result of a number of factors. the terrorist factor is difficult there. they have insurgency-like features. we're sharing information. the yemenis have done a good job of finding and arresting and carrying out attacks against al qaeda-types.

thisthough they're in domestic turmoil, that counter- terrorism relationship is strong. that is important for the united states. we want to do these things in a bilateral way. that requires cooperation, that they adhere to their legal system and international standards request twice you have mentioned caches of unsecured weapons. were we doing to make sure those are not taken and used against us and others. >> we have made a number of clear points to the tnc and those who we're working with in libya about things that we are concerned about. obviously securing any type of materials for weapons that could be used by terrorist groups, weapons of mass destruction or whatever else kind. there are a lot of parts to that country that are uncovered.

a lot of concerns treated the libyan government is going to .ave a challenge ahead of it trying to overcome the tribes and families. there will be rivalries that will come to the fore. this is where the united states does respond well. we have people, we're working closely with the tse. -- tnc. we want to be able to go back to the embassy and work closely with them. once again have the type of relationship that we want to have with countries across the region. when you look at al qaeda, a lot of the senior cockeyed members are libyans. -- al qaeda members are libyans.

>> i always -- i apologize in advance. you mention having met with the 9/11 commissioners about their report card. journalists will always ask you about the bad ones, not mention the other, the 30 of them you have completed. talk to us about the nine that they did not give a good grade on. where are the priorities and likelihood we can close this one out? i was not successful closing get out. i ask it with all humility. >> there are some within our control. the overhaul of the congressional oversight committee structure. that is something there has not been a single move to address in the last decade.

that is something that needs to be addressed. it is tough. i will give it to congress that there are a lot of rice bowls there beside from that, the intersection between home and security and defense is quite challenging. doing that is important to do. they need to do it thoughtfully. i think they have -- they wanted the executive branch to overhaul itself. then there was the can the kept being kicked down the road. one of the other areas is the oversight board which is something that is a and appointed a group of folks that looks over the cyber liberty issues. we had a number of people we were trying to get to be the chair of that. the various things happened that, and we do not have somebody at.

we are working on that. we have identified a couple of members but even though we do not have that, there are offices that work collectively as a curb. they will get together to make sure they are empowered. that they are able to do their jobs. there are issues of what the federal government is requiring of states. but states can pass their own laws that make things not permissible. there is this hamilton-jefferson challenge we are facing. biometrics is evolving. we need to stay focused on that. make sure we -- one thing they pointed out is we do not have a information on accidents in

united states. we need to work on these things. when i look at the recommendations from the commission, between the last 10 years, you can check off a lot of them and say we have become -- we have come a long way. the fact we still have some things to accomplish, we need to stay focused on them but i like to look at those things in the win column. >> this is my hobby horse of the 17 not accomplished yoet. that is the additional bandwidth for first responders. the question to you is, what is the likelihood it will pass given all of the other in things facing congress right now, the fiscal concerns. second, is the president willing to make it a presidential

priority to get this thing passed? there are two administrations and it hasn't gotten down. people will be hurt and people will die if we do not fit this thing done. >> it is one that a thing the 9/11 commissioners appointed to. -- pointed to. there is a buildup to to make sure it is going to service that. there are also issues related to, you want to make sure you have systems in place for the orchestration is not just been able to communicate with everybody. that can lead to a chaotic environment if there is no system in place, that there's going to be some orchestration of that opera ability. one of the real problems was there is so many people on the

nats, we could not distinguish. it was almost overloaded. you want a system that will be able to leverage that. the president is committed to making sure he is doing what he can. there is a big congressional stake in this. there are different equities as well as perspectives. should we make more progress? yes. should we have this system that is going to be within some type of business architecture that will allow communication to take place in emergency situations but not so that the airwaves are inundated with everybody who can access the channels, that would lead to anarchy. >> talk to us about your view of how intelligence reform has been implemented and how it is working. iran the second dni -- you are

on the second dni. how is reform working? >> uh -- ipods because of how was a working now -- i pause because of, how is it working now. minis to be an integrated community. thatnk that the changes have taken place are good. the real challenge to the commission is that the dni these to have more control over personnel and budget. they happen to be in departments and agencies that have their own cabinet officials with their own appropriators. it is easy enough to say the dni

should be in charge of the intelligence community. but the practical implications of that is challenging. do you want to stick with from the secretary of state in large chunk of their work force? we make determinations based on what the national requirements are. so, one of the things jim is trying to tackle is it. .t. so that you do not have wasted resources, resources that not able to be integrated. but that you have the appropriate systems into place, you taken a place cyber security. all lot of money goes into the i t structure. >> bringing you new water.

>> i'm glad it was not a note. notes are never good in my business. [laughter] >> talk to us for a moment, one of the things in the department of home and security was the intelligence and analysis capability. appropriate dni's role when it comes to a homeland intelligence? how has that capability been built? >> the department of holman security has a unique response -- responsibility. it in a waye to map the department can take appropriate reactions to mitigate those threats and vulnerabilities.

there are different components within homeland's security. intelligence and analysis are there. karen is doing a great job. she needs to make sure the secretary has full visibility into those vulnerabilities that the secretary is responsible for addressing. yesterday we got together, the president has these by weekly sessions with the heads of departments, and defense, state, homeland's security, we went over the 9/11 anniversary preparations. we addressed the threats and talked about what we're doing overseas. what the fbi is doing here. we finished with secretary nicole itano -- napolitano, this is what we're doing to ensure we're protecting the homeland.

that has to be informed by the intelligence committee to be able to help janet and others be able to identify those things that, if the threat is coming from bridges or tunnels, these are the things we should be thinking about. what we need to do so we can address possibilities. it should not be a replication of what ntc is doing. it is taking that threat and saying the mission is this, we need to match it against that mission so that the secretary knows there are certain policy initiatives we need to take, or additional security precautions. >> what is the appropriate role when it comes to home and security intelligence? >> i got a paper this morning.

don't ask me about it because i have not ready yet. -- read it yet. to me, the broader universe of information is out there. intelligence conjures up something clandestine. there are many components. things acquired by law enforcement or at the border. applications. or from intelligence that is collected. i think the dni these to make sure the intelligence community is able to provide to janet, to others who have responsibilities for protecting the homeland. that the intelligence machine is

able to collect and analyze information to allow them to do their jobs. the president looks to them that they can address the threats. they need the support. they need to be able to ensure they have a full visibility. jim clyburn needs to be sure that our analytic systems are really hitting on all cylinders in order to give those organizations what they need. that does not mean it is clandestinely required. open source is a great example of what we need to be able to do to leverage. social media, there is a whole new universe of information available. i think what the intelligence community has to do is make sure that that universe of

information that is relevant is made available to janet napolitano and others. >> you mentioned the fbi and vhs -- dhs, there has been much written and talked about the tensions inherent in that relationship. is it working better? if there is a threat against bridges and tunnels, who is responsible and accountable for passing that to ray kelly, who is a commissioner in new york. >> a lot depends on where it is required. requires that information. it will immediately be disseminated. the cia has done a great job making sure that information is

made available. it goes out and will be made available on fbi systems. it will be immediately available in new york. that is from the standpoint of a threat to bridge or tunnel. they need to use that information to track down that lead. the mission is not to ensure the propagation of information but it is an operational environment the combines federal agencies. dhs has responsibility to ensure that state and local officials have primary responsibility to ensure they are aware of this and they can take the steps because it is going to be the state and locals who have responsibility to step off the security sense. >> are there specific things

that the private sector could do to be helpful to the government? and other things you asked of the private sector? >> part of it is making sure they have the dialogue. the dialogue has been good with certain segments of the private sector. . lot of the financial sector's i think it is making sure that the companies share with us their experiences. we need to understand the different types of signatures. we need to make sure we have visibility into what their experiences are. but also to -- they can do some things themselves to tighten up fee practices. there are guidelines we can help them less. their security is dependent on the discipline and rigor they

have in ensuring the protection of their databases of their critical information. particularly at a time of cost cutting with the economy where it is. some companies will pare back the investment because they want to make sure they can do what they need to do. if they are paring back those investments, they do that at their own peril. they need to continue to devote to their resources to it. >> the last question. no conversation with the complete without acknowledging and asking you about the impact of the current fiscal crisis. there is concern, in the wake of the cold war starting with bush 41, there were tremendous budget cuts in the security apparatus. the law-enforcement community. that has been built up steadily over the last 10 years.

there is a tremendous concern here and nationally about the implications for our national security capability in this time of tightening budgets. can you give us a sense of what to expect? >> agencies are going to have to be part of the efforts to trim budgets so we can live within our means. the investment in intelligence has been significant. as we wind down in iraq and as we look afghanistan, we have to make sure we are able to have capabilities that will ensure that the investment that was made is going to allow us to do what we can to work with our partners. i think, this is where jim's

role is going to be important. the need to have redundancy benny's to be thoughtful and deliberate. yet to look at these big-ticket items, these technical problems. what we need to do is focus on not the capability but, what are we trying to accomplish? make sure we are able to achieve those missions. in respect of of the platform or capability. sometimes, we know congress will have certain pet projects as well as agencies will have a pet projects. we need to make sure they are useful, meaningful, important for the mission. sometimes it is easier to start

a project. some things serve their time. that is why i give that bob gates lot of credit. he made tough decisions that resulted in a u.n. cry against him. these were big savings. he was able to reinvest it. this is where jim needs to make sure, what are the real priorities there? he wants to make sure there's going to be the capabilities that exist for that. on i.t., there is a lot of money invested. as we go forward in some of these new areas, integrated networks, there are savings that can be achieved. we do not want to hurt ourselves in terms of what the american people expect from the security

community. having somebody who can say, this served it's time but now the time has come to sunset it. >> thank you for year time today and your service. i think everybody wishes you every continued success. [applause] to wrap up today's events, we are honored to of the director of national intelligence address on the role on intelligence and protecting our homeland. he is the epitome of a selfless and public service. 30 years in the air force. a vietnam veteran. he was the first civilian director of nema.

he got congressional authorization to rename it. he ithe former president of fasa,. he was the second anthe fourth director of national intelligence. he is a former colleague, a dear friend, a mentor, and an all- around great american patriot. please join me and welming a professional, jim. [applause] >> thank you very much. great to be with you. i realize i am standing between cocktails and whatever else you're going to do after this. i think this is an important forum. i wanted to have the opportunity

to engage with you. it is a pleasure to engage with insa and scis. both organizations have great deal of respect. i have a great relationship with each of them having served back in the 1990's as president of the predecessor to insa. i