case, predominantly in the netherlands, was breached. and they were breached from iran, just like many other security vendors have been breached. we get a target every day in our little 50-person company with no help from the government, by the way, to defend that. and this person breached that little yellow lock that said who they work and began to take down the government security. and the people in iran said they were using it to say they were google. anyone in iran who was google in content in the country was able to give up to the iranian government whatever they were looking at.

and one government will shut down for basically at least 60 days. those of us in the security world found out it through a browser forum. unfortunately, it was a particular group and it ended our relationship with them prior to that. and we were not notified. >> i think that was a great example of a nation state using its intelligence services to coopt something like that. by the way, diginotar is no longer a company. it was a hack that took this company out of business. >> it was a subsidiary of a larger business. they act like it didn't happen.

>> an american company actually owned it. >> that is right. and i think your point is an important one. we have attempted to be hacked by the same group. we have watched them try that in a loss of months. two other people who the locks in the country have been attacked. >> it shows how sophisticated and dangerous it can be if someone has a nefarious purpose other than criminal. criminal is bad enough. this was other than criminal. i see my time has expired. mr. lewis, i would like you to talk about -- it is difficult to get to a place where we have a narrow focus about how to move to the next step. let's talk about the challenges

of why it is difficult to even get a very narrow change in the law. lastly, dr. schneck and maybe mr. dix can talk about this. you talk about hardware entering our system that may be malicious and difficult for us to understand how to deal with it. maybe you can tell us what we should do regulatorily or what we can do on the part of the government when those things leave this country for nation states. >> those are hard questions. they are great questions, but i'm glad phyllis got one of them. the neutral answer is to say, when you look at a new technology, it usually takes between 20-50 years to figure out how to get it. look at airplanes, steamboats. we are at 18. not doing too badly, i guess.

we have some old ideas. they have not gone away. it was in pdd 63, which was in the clinton administration, and it does not work, give it up. there are obstacles to try to fix this, but if it is the electronic communications protection act designed for dial up telephones, you have serious issues here. you have privacy issues. we have issues that could slow us down and put us at risk. >> i would like the record to reflect that mr. lewis and i agree. [laughter] first, let me touch on the hardware issue. at last cap, there are 155 different supply chain risk- management issues in the government today. we need to coordinate those issues. organizations like ours, we invest heavily in our branded integrity program because our reputation is how we do business. we deliver concept with our products. one of the things i think this body could help with as we sit here today and deal with this supply chain risk-management problem, the federal government continues to buy from not trusted sources. in order to save 5 cents, we buy low-cost, low bid. then wonder why we have malicious products in our supply

chain. we should be buying from trusted sources and if there is some reason we do not, there should be justification. and liability should accrue for whoever the acquirer is. >> i do agree. i would also add that we look at the supply chain as an issue of product integrity. we do rigorous testing before acquisition of any product. and we rely on existing standards. you want to know, is exactly what you think you bought? it is rigorous testing and expanding some of the testing standards. >> to clarify, we are at risk if we integrate into the u.s. system not trusted sources of product? i want to make sure i'm clear on that. >> i think it increases the risk. >> i used to do this supply chain stuff when i was in government, sort of on both sides of the table. a couple of things on that -- first of all, it is not easy to hat. you have to assume that the chinese and russian friends are taking the low-cost approach. why should they not do it? the second thing is, why should they -- when you push it off to a global supply chain, we will not be able to get out of that. this is a difficult issue that will force us to think about how to work with foreign suppliers. there is not really a choice here. right now, hacking is so easy, why bother? if we ever manage to improve our defenses, they will switch to supply chain. >> i am about five minutes over on his time. >> but this is a clinton we can all agree with right here. [boo] >> i appreciate the committee members who are trying to get back on track. >> thank you for putting this

panel together. there should be a justification and it should be public. the liability should accrue to whoever the acquirer is. >> can you comment on that as well? >> as much of the supply chain as an issue of product integrity, we do the attesting,

is exacting some of the existing standards. >> to clarify, we are at risk if we integrate non-trusted sources of product. i want maturing clear on that. >> to have to assume they're taking the low-cost approach foreign espionage. and is very hard to cushion this off on a global supply chain. this will probably force osama thinking how we work with foreign suppliers.

>> i appreciate the patience of the committee members we will try to get back on schedule. >> thank you for putting this hearing a a together. your testimony and answers to the questions have been very informative. i want to follow up on a line of questioning that mr. waxman had to dr. schneck. during formation predicts attacks on smart phones and mobile devices in the future. there was some concern about how businesses handle mobile security. apparently, a study showed that hold the vices create some of

the biggest concern for organizations. about 40% of those businesses surveyed had lost or stolen devices that contain critical data. about 30% of mobile users that were studied, we found out they stored their passwords and pin numbers and credit card information on their mobile devices. i'm completely guilty of it. i will he raise it as soon as this hearing is over. >> [inaudible] >> [laughter] one way to tackle this is to

make sure that the devices are secure in the first place, so if the employee loses them, the data is secure. or that you can remove that data from a remote source. can you elaborate on what is being done by a device manufacturers and app developers to secure the products? >>, so far, what we have worked with, there are a couple of things they are doing before delivery. i will take the applications side first. but when people download an application, they rarely think about whether it is secure. the purposely download something with a big smiley face on into, but it is actually a platform to enter your corporate network.

that is one risk. some companies are very careful in their app markets and only approve those that are for sale. others are not as careful. >> from the pedroia operating -- the droid operating system to ios to microsoft, the first thing we are working on with them is how to secure the device itself. if you do not know it is connected to your company, then that is your first issue. the second thing becomes, how do you then work with the applications that go into that phone? each one of our ecosystems do that differently. some use our security or others to make sure they know they are putting that there. they all three have very different testing mechanisms to test those apps in terms of the sandbox to tell us how they go

back and forth. and then how you secure content and communication with mobil, and it is no different than laptops and desktops that we did before. >> the ability to lock, locate, and wipe those devices on demand. >> we are getting close to maybe have a solution to authentication. it has been the holy grail for about 20 years. there used to be one government approved private company in north korea. do you know what they made? they made mobile phone apps. i see a pattern. [laughter] >> just another general question for the panel, you think the fcc has any role in increasing mobile device security? and what should it be? mr. connor. >> absolutely. you look at the sec and the infrastructure is there. i spent 10 years at at&t and

another 10 years putting electronic systems into those kinds of companies. you can look at the mobile network as either good or bad. it cannot stop the crime i talked about today -- if used correctly, that technology can now be broken today. if you think of one governing body trying to own each of these pieces, it is folly. i think doe needs to work with public/private partnership in its domain. i think the fcc needs to work around that ecosystem. the tactics the bad guys are taking against us, the idea there are one size fits all is ludicrous. >> thank you. >> this question is for the entire panel. we will start with mr. conner. similar with doctors, we should heed the hippocratic oath and make sure that in the first place, we do no harm.

if you could offer us that advice for legislating, would that be? >> the way i would start is with government employees. i spend a lot of my time with this team and others educating. i think quality is a great example that government ought right. if someone started quality, they would not know what it meant. you hear cost of quality. i hear cost of security. your focus on what cost? the total cost of security, or just the cost to implement

something? i would start with the education in your bully pulpit. the second thing is, start on the inability of businesses to talk to governments or to themselves because of antitrust and the patchwork legislation in the states. i am tired of it being a one- way communication street to intelligence and nothing in return. i understand they legally cannot do it, but if it is a company that is tasked with protecting our government and enterprises and the citizens, it is folly to me that i can only give you information and you cannot give me any. >> two quick things. one is, continued to inspire an environment that supports innovation and investment. and be cognizant of the fact that the bad guys move fast. we need to have speed and

agility and our ability to respond. attempting to comply with a compliance model that takes a long time to build and implement slows us down and is an impediment to our ability to have speed, nimbleness, and agility. >> in 2007, we had an intelligence disaster in this country that has yet to be declassified. in 2008, we were about a week -- we were able to get them out in about a week. 2010 google and other c ompanies got hacked and lost intellectual property. last year, we saw the ability to destroy a physical infrastructure using cyber attacks. we have a list of major cyber events. i got tired of people asking why we would have a cyber pearl harbor. the list is now up to 90. we need to have coordinated the

event. >> you think we definitely need legislation. >> i do. and i think there's one thing we can say now that we could not have said five years ago. we now have a pretty good idea how to do this between the experts appear and the agencies that have done a particularly good job. we now have an increased idea how to reduce the risk. >> i agree we need legislation. the question is, what is the legislation that we need? i do ascribe to the "do no harm"theory. the problem we have is that in cyber security world, all of the incentives to favor the bad guys.

attacks are cheap and easy and profitable. it is a really terrific business model. defense is hard. we are following the attackers around. it is hard to show a return on what you invent, and criminal prosecution is virtually nonexistent. understand that you are dealing with the invention of gunpowder, like i said before. it is an entirely new thing. you cannot take traditional models and plug them in here. you can take legislation that will do harm, that will take away needed resources from where they need to be. we need a creative, 21st century approach. a lot of what we are seeing in the public policy world is not that. >> thank you. in the last 12 seconds, dr. schneck? >> let's unleash the private sector. we built this thing. incentivize us so we can still eat when we get done doing it, but let's build business models around building security from

the hardware up, and i think he will see this world changed in a few years. >> thank you. i yield back. >> we are going to lock the doors and not let you out until you give us all of the ideas that you give us here that we need here. we will let you out, but i need it in terms of we have got to understand in order to get this right. if you could help us grow down in a jurisdiction that we have, we would appreciate very specific suggestions back. we will go down to ms. matsui from california. >> thank you, mr. chairman. the system of the most interesting and at scary testimony i have ever heard. i think that, quite frankly,

our country does not realize what risks we have. i think the things we hear about over the news are not necessarily -- it talks about hacking, but it is at a personal level that people understand. this could affect our economy, our country, the way we live. i truly believe this education process is going to be very important. and i also believe that people like you have to step up to talk about it in ways that they probably could understand. the cyber security, everybody sort of understand it, but does not understand it. with every advance in technology, we open ourselves up and our daily lives could be impacted so much. i wanted to follow-up on little bit more on the cloud-based services. businesses and governments are now going into the cloud.

what are the unique challenges facing the crowd with respect to cyber security, and are we prepared and thinking ahead in regard to these challenges? >> it is something that is getting a lot of attention from everybody. i think a lot of people are running before they have thought it through. i think it is very application and business sensitive, depending on what you put in the cloud. some things that you put in there is a a password sensitive. that is fine. but if you are putting a valuable information and intellectual property in the cloud, you have got issues. the security within the cloud is not what it is within the main frame center today. and how do you communicate to the cloud is still a matter of how you choose to implement that.

i think that is very naive. >> are we have a place where we could start looking at that and incorporate how we integrate some of these things into the information sharing activities? >> absolutely. >> we are still ok right now, but right now, you talk about it as a very sexy things. people are still jumping to it. dr. lewis, you mentioned the government should find ways to incentivize companies and dr. schneck was talking about the same thing. what types of incentives would be the most effective, in your opinion? >> four kinds of incentives. there is regulation. we will need some of that, not

too much, and it varies from sector to sector. there are tax breaks -- and i mention this to other republican tasker is in cyber security. they thought this was not the best year to go after that. there are subsidies, and we might need subsidies for research and development and other things. finally, there is a coordinating affect. someone has to lead. you could find this is a good story from the australian example. if you pull these things together and point them in the right direction, they will come up with some good stuff. we have found some good examples of the defense department were that has worked well. regulation, tax breaks, subsidies -- and that might include building something into the rate structure and that

could include infrastructure. >> doctor, do you agree? >> not necessarily. i think regulation draws a box around what you are protecting and takes it away from research and it shows the bad guys what we are not protecting. anything that allows a company to be creative and invest up front in cyber security -- because the upfront investment is a lot easier than the cleanup. we do not realize this, but the small and medium businesses make up 90% of our fabric. to think about where the newest technologies come from, not just cyber, but maybe the next jet engine -- they will not necessarily invest a lot in cyber security when they get that huge grant. but if it is built into that grant, extra money saying you will get this money from the

government only if you promise to secure it, and we can provide that. >> government does have a role, though. how do you do this so you all work together? you are right. the business sector can work together and have solutions, but how do we get to the next place? >> the thing you have to do is go over the legal obligation when you sit with cdo's. they all agree until they talk to their legal counsel. then it went completely dead. nobody wants a public antitrust issue of sharing. and if you go public, you create a standard to be sued criminally as well as civily. and as soon as i say something, that is the standard it is held to. >> thank you. >> we now go to the representative from ohio. >> thank you, mr. chairman. for some of you, those of you

that do not serve on the committee, you go home and you say, do i turn that on or not? i have been told that as soon as you see the "http coxf" you are safe. are you telling me that is not true now? >> i hate to say that my daughters are on some social networking, and we had our problems, about four days to get that thing fixed.

i am very cognizant of the fact, of watching that httpf come up -- https to come up because i do online banking. it is one thing that we need to think of. you both mentioned in your testimony the idea of creating trust of relationships online either through authenticated e- mails or through wide listing. could you explain that? >> our focus on trusted relationships and the macro is a little bigger.

we all work together, and we do. i think we are dealing online with a world that is much different than spam filter. what we but that was only the e-mails sector. now you have the mobile vector. the enemy is factor. when you look at relationships, we have 30 different parameters we but at. it was all kinds of things. now you multiplied that. we have 1000 different parameters of trust that we but at. it is what has your behavior been lately. >> continuing to advance the implementation of the identities in cyberspace. it is a step in the right

direction. it is an example of them gathering together to address this. it is a root issue in this entire trusted discussion. there is a collaborative effort under way. it is moving to implementation. it could be a step in the right direction. >> the irony is about this. >> let me go on with this. people are testing what they're doing on the internet. this is what we're talking about earlier. you need to buy from the trusted source.

how do you know that even if you buy from somebody that is trusted that the step is still good? how do you go through unless you are testing? are you testing constantly? >> i will take that first with your permission. you have authorized to issue the shares and sellers that we utilize. that is a place to start from, understanding who those providers are. there is a great deal of war

going on in the open group to create a certification and accreditation progress with suppliers to address this issue. the fundamental piece of this is cultural. we are evaluating people on their ability to meet the schedule. this drives a certain behavior. it does not have security as a paramount foundation of that contact. >> my time has expired. i yield back. >> you are now recognized for questions. >> thank you. this is a general question. the communications security reliability council has been formulating recommendations for best practices to ensure reliability of communication systems.

had you see this process contributing to success? what is the role in the coordinated defense? >> i am glad you said that. i was trying to remember. i have gotten all but two of the letters. we have all said that we are moving to a world where the role of the service providers is going to be more important. that is where they are the lead agencies. we looked at this issue. they were afraid that's if they took to active of a roll, they might be seen as trying to regulate the internet. they wanted to avoid that. they have taken on an approach that works more of coordination with the experts with developing venues for the private sector and encouraging them to come up with the

voluntary approach. one thing i said to the sap a while ago was try the voluntary approach. if it works, great. if it does not work, we need more mandatory measures. it looks like it is working. congress has some other things they are doing. this is where the service providers and their regulators will be one and the key elements of cyber security in the future. >> anyone else that strikes their in a position to serve in this campaign in coordinating that at the national and system level to help deliver messages to stakeholders. they're working with carriers to be able to deliver that message. i think there is a key role. >> they are setting a good example. they are reaching out to private sectors, saying what are the

best practices. when you talk about the need to get the house in order, that repeats. they have a group of people really looking at these policies and issues. we never seen that before. this is a good time for them to not only builds on the awareness they launched last spring on the hygiene program but to jump on it for the larger enterprise as an example. >> mr. connor, this is probably what you referred to. your testimony said the report having been affected by cyber attacks, what is the role in preventing the small-business is. >> the networks underpin this.

>> it is not always outside or those attack factors come from. just like organized crime found its way inside, increasingly will have to look at that as an attack factor. it should be something that the sec takes into consideration as we look at how to do that in addition to the filtering. one thing i would caution, i hear a lot of rhetoric around building separate networks. i am old enough that we had separate networks and only had cleared people doing it. to the reliability when things like 9/11 and tsunamis happen, the benefit of multiple networks outweigh the need to protect the isolated network. and do not believe that is a

real answer in today's world. >> i will yield back the value of my time. >> we believe mr. blackburn is next. >> thank you for the panel. we do have two competing panels. let me go with mr. lewis. could you describe the problem with the current implementation of domain name systems and why it is important? >> what you have heard is the people who designed the internet designed it as a dod network and it thought it would grow out. they did not worry about trust or authentication. we did not have to worry about this. the domain name system comedy addressing system, it is vulnerable to spoofing.

it can be manipulated. you think as far as you can tell on your machine that you are going to a legitimate site. it could be the government of iran or a russian site. you can spoof it. they use communication so there reduce the ability to impersonate another site. >> the challenge with this committee is that it is so high-tech. it is very tough for people to understand. a lot of people understand why you have a demand.

now they have exploding domain names. this is one for the whole panel. should i be working to rule it out? >> beware of newfangled toys. it has liabilities better equal to the liabilities we have today. will it be five or 10 years later? we hope sooner. if it turns green you know you are safe. and someone says your identity is to it is, it is. that is where i put the focus instead of buying authentication technology to taking responsible liability for your identity. if the cost you 500, that is where the poll but starts to make sense. -- $500, that is where the

bully pulpit makes sense. >> does anyone else want to respond? that is fine. we followed them years ago. dismantling by china and russia and their neighbors. they tend to be very concerned. they are allowing democracy movement to get their word out to communicate. that keeps evolving. the losses governments try to clamp down on that. i have also been concerned about. that is just a statement. it is like a competitive market. people want to get information. it is so we can really regulate. i serve on the energy committee and he power plants of the time. the opening statement talked

about you could be secure if you have a desktop alone and no longer connected. vinifies what votes could and of doing. the power utility system relies so much on data going to rtos. what they are producing is excitable electrons to get on the grid. if that is all we had to worry

about we would be fairly safe. it is all the calculation. >> i testified earlier. we have to start within the power production plant itself. we are working with large manufacturers. you want to know whether the original ones or the ones coming in, who they are and where they are from. we need access in both systems and sharing the information. the third thing we're working with is how that data is shared. >> to other quick points. it does not make any sense. people bring their iphone to work. the plug it into charge.

we have seen that with allegedly isolated air gap networks. they are talking about the networks. this is an avenue of attack. right now when you buy in the password is password and the user name is admin. it does not take long for opponents to figure that out. they look to how their infrastructure affects the internet. the the lawyers to tell you

you're not connected. when you do the survey, you find you are. some companies do great and others need some help. we need to figure out how to do that. >> the good news is a lot of these are the same. if you can get some best practices and incentives, they multiplied. authentication is one vector. you have technology in the opponents. this is pretty simple. the only do one job and life. they are an opponent on the system. you can lock down what they do. >> thank you. >> we will now go to ms. blackburn for five minutes.

>> thank you all for being here and for your patience with us. i want to say just a couple of things. i think it is so important. the industry needs to lead on this. anything we do is going to be passe before the ink is dry on what ever it is we do. another thing, we have spent some time on this committee and a trade looking at the issue. there is the data security and a brief vacation issue. it is a component of what we have here. most people do not realize the vulnerability that exists in

their home with a computer that is there. i hear about it a lot with my district in tennessee with all the songwriters and entertainers and individuals in financial systems. this is compound in every day. as we look at the privacy issues, and let me ask you about federal preemption. as you look at our standards, i wonder if you have any thoughts of putting in language and making certain that we are working with this. >> i am supportive of preemptive notification requirements.

we have 47 different ones. these are things i have been hammering on. we have to understand that it involves costs. we can have good standards. we do not have to have multiple good standards. we can have the increased security, better privacy. i think that ability to cut through the government's falling all over itself is critical to getting that. i'm very supportive. >> i would tell you it the single largest legislation issue that has bought security this probably california 1386. if you try to encourage

yourself, you are safe. this is the shot that was heard around the world in the u.s.. this needs to be worked with. the second piece i would tell you is the regulation that was just passed about disclosure. it is going to have a profound impact. >> that disclosure is pretty nebulous in terms of being meaningful. as a small business person in terms of what that means to you. >> thank you. i yield back. >> your recognized for five

minutes. >> thank you. to you believe the law enforcement has the tools they need to go after cyber criminals as described in your testimony? >> they do not. if you look at it since that are being made to have the criminal network geared up, i think part of the problem where look at their onetime uses. unless you use it every day, the system will never be ready. the internet is treated like a country. we were able to put the passport information so it has biometrics.

this country does that do with that. it is first-generation digital. the second thing it has, and this is all on commercial chips, it was 6000 agents. if they go after a tsunami, they can go on any network included in an internet cafe and can be secure. then access to any interpol office. it all resides on this little card that 6000 agents use around the world today as they fight crime. it has three different standards and cases that allow them to do their job. why is it important? it is what he or she uses every day. it is not something you use everyday, it will not be useful at the time of need in some of

that. >> we are replacing cyber crime with where we were in the 30's with the cops caring 30 revolvers. >> worse than that, we are isolated. we are the most at risk. there is no ability to enter work on global capability with the good guys. >> most of us here will remember after 9/11 this issue of technology security, biometrics, was one of the top priorities of the 9/11 commission. we passed the real identification bill. not everybody has found excuses

to keep dragging on. we are granting the states for common security. the state are refusing. we have given them money and they say we want to spend it on other things rather than the first priorities. you think we may want to revisit that whole situation rather than ignoring? >> i spoke after bush addressed the house and senate. other legislators were leading this effort. i spoke at nato after 9/11. we learned how to defend air, land, and sea. the next frontier is cyber. we have made progress but the bad guys have made more progress. they can jump across jurisdiction with no legal barrier. >> this is a point where we may want to talk. this is a place for both sides

should be able to cooperate. we have a consensus. the obstructionists are on both sides of the aisle, too. maybe they can look back and see how we can address that issue. i appreciate the fact you draw the line about i am concerned. they brought two interesting things. when we bring that strategy, we do not want to greet a box that has people litigating private sector. we also do not want the bad guys to know how far outside they need to move to avoid it. can you elaborate again how that may be utilized by the bad guys? >> this issue is so vast. if you start saying you implement these five things, the adversaries are always looking at how to get around it.

they know their targets. they know what they want. they spent many months and people to find the intellectual property they want. they get it. it is quite clear that if we say we are going to seal up these gateways and these are the best practices we must follow, that is where the money will go. after that, the money will not go to anything new and different. the adversary always goes outside that. it is just like the industrial control system. they say they are disconnected

by you find that put the modems back to a person can monitor the game. there is always a way. we want to incentivize. we're not incentivized to do what is good for the greater good. if you put that money toward innovation, we will end up building better technology. >> that is a great question. i am less concerned about what we say we are doing. did say anything you want. by the time you do it, they have already figured it out. they're not waiting for us to regulate. the model is very clear as joined forces. we still have strong army, air force, marines, coast guard. they have done their own. they're highly integrated with their suppliers. i served on the joint force advisory board as a private sector person. there is what you do that is public and what you do that is

not public. that is how cyber security has to be treated. did they have to get their best and brightest. and they had to share what is public is public and what is not is more important. >> they refer to australia. it reminds me of a story of a notorious australian bush man robber named ned kelly. he was notorious for putting so much armor on so that nobody could shoot him and his armor slowed him down so much that he shot him in the back where he was not armored. that may be very symbolic of the ned kelly syndrome. we create an opportunity for the bad guys to get around us. >> i thank all of our committee members. the value of the content we got

from you all is unparalleled. i think my colleague and i will be reaching out to each of you to say come back to us with what really would work. we got a lot of that. onre going to move forward this. i think there is an opportunity to look at device manufacturers, perhaps the phone or router side, the education side. we really appreciate what you're doing out there. we appreciate your input to us so we can try to get it right and solve this problem. >> i would say bravo. thank you very much. every member drew so much for your testimony and the answers to our question. it was most helpful. thank you. >> with that, the committee will stand adjourned.

[captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute] >> here is that wonderful moment where senator lott reveals his list of job for the states' rights and segregationist south. take a look. >> we voted for him. we are proud of it. >> publisher josh marshall on the internet and is websites emergence of the breaking news business. >> it is such a different world today. it's hard to believe that was 10 years ago. things like that happen all the

time. there are certainly many big stories tpm has had. now we have an editorial staff of 20 people and we are breaking stories right and left. it has almost become commonplace. it is not nearly as surprising today as it was back then. >> more about josh marshall tonight on 8:00 p.m. eastern specific -- eastern and pacific on c-span's "q&a." >> david cameron discussing changes to the national health service which they say will jeopardize the future of the nhl's. members also played -- paid tribute to quinellas but ii. prime minister's question tonight on c-span.

>> one of the witnesses you just heard was james lewis, a guest on friday's washington journal talking about cyber security. this is 35 minutes. >> meet james lewis based in washington at the center for international strategic studies and he testified before the house subcommittee about the threats of down these days by those bemuse the internet and increasingly hand-held digital devices. he led an effort to for the public commission on cyber security and published its first publication. january 2011, greece security two years later. give us an overview of this threat for the average everyday citizen who regularly uses the

internet. guest: it started out as a toy for gaming. we have woven into the fabric of our economy. when you go to the gas station, the grocery store, it is growing in importance. i'm waiting for the day when we get internet-based cars. that day is coming soon. host: go on. guest: there is increasing dependence. when the technology was created, people not expected to come this central so it is not at all secured. the around the world, you have spies, criminals, armies you realize this is a tremendous opportunity for them. every year it gets a little more risky for america.

host: who is responsible for security? with that level of interaction, where is the security? is it my responsibility or the carrier? guest: no one is really responsible. credit-card companies and telephone companies know if it is irresponsibility. it isn't easy target if you are a criminal. you would only have to find a few who made a mistake. basically, no one is in charge and that's one of the reasons we're facing big problems. host: what are the criminal activities you see so far and where is it going? >> the ones who have dominated

cyber security -- financial crime, bank accounts, a lot of success and money. we had the sony play station incident and fraud on the facebook and millions of dollars here. because most of these criminals live outside the united states, they are not caught. it is a risk-free crime. the second problem and maybe bigger problem is the threat of international property -- threat of internet -- intellectual property. they lose hundreds of millions of dollars to a foreign competitor. this hurts the country. crime and espionage right now -- the future might be more exciting because it takes a little skill to cause a disruption.

we see those skills proliferate -- what happens when people who say they are anonymous and get them? >> you said your first report on cyber security was a best seller in what country? >> beijing, china. guest: it tells you three things for the price of two. the chinese know their networks are insecure. second, this is going to become a problem in the bilateral relationship with the united states. they have made extensive use of hacking as espionage and they have been successful because we are so ill-prepared. when the chinese think about

security, they worry it's going to backfire on them. host: the internet car is distracting -- they will lead drivers check facebook and buy movie tickets and used water from the dashboard of their car. more and more ways to be interconnected. we will leave the driving safety issues for another time. this is not from you, but from one of the people testifying. this is from mcafee, one of the company's that sells packaged internet protection services to consumers. here is some of what she said to the house panel. >> we see 56,000 new pieces of code every day that allow my will to be constructed on your machine.

one idea is to catch the addresses that are spreading it across the internet. i cannot forecast the weather -- that comes from enabling information sharing. resilience means i can run even if the enemy gets in. the analogy is the disease is in your body, but you cannot let it hurt you. we have to be resilient to that. host: that was one of the witnesses all along with our guest, looking at internet security. was there a consensus across the panelists on what washington should work could do to respond to this? >> what a surprise, no consensus in washington. but people are beginning to say similar things. there's a recognition that what

we're doing now is not working and we have to change. but when you take the next step, what do changed to? the net fall apart. -- then that it falls apart. some people would say an election year is not the best year to get major legislation. in retrospect, i would agree, but we are facing this growing problem and we will not be able to fix it absent new legislation. host: many of you are communicating using facebook and twitter and our topic this morning is the growing threat of cyber security to individuals and whether or not washington should have a role or whether it belongs to the commercial community to have the responsibility. we would like to hear your questions and comments. the phone numbers are on the screen and you can send us an e- mail.

our guest will take your calls. the senate is working on legislation and here's an example. they are working on a cyber security reform bill. what are the contours' of that legislation? >> there are a number of provisions that are good, but not critical. we are going to need to improve the work force. everyone loves jobs program, not much fighting. another mom and apple pie kind of thing -- and nobody says a research and development is bad. you have the federal information security act and there are portions of the bill that revised that. the crux of the matter is the ability to tell service providers and that they need to pick up their game and there is

no agreement there. there's a big effort to dilute that and water it down. >> talk about why there is not an emerging consensus. guest: some of the evidence we have heard in the last couple of years -- government is the problem and big government needs to be smaller and regulation is bad. no one disagrees over regulation can hurt the economy, but there are some things like national security or the market is not going to deliver. the best way to think about that is how many people would be comfortable saying regulation is bad, let's get rid of the faa and let the airlines provide for their safety? you need that additional incentive that comes from a regulation. >> here is some additional

coverage -- the developing senate plan to regulate computer security that runs critical industry has drawn strong opposition that says it goes too far -- tweaked fromith a donna -- do any of the anti virus software work? aest: if you don't have firewall or anti virus software, statistics suggest your computer will be taken over with and about two or three minutes when you log onto the internet. so you have to have these things in place. are there sophisticated opponents who can beat them? absolutely, but you can bring the risk down by using this stuff. there are a freeware version and

a four perches versions. there are good programs out there. guest: when you say your computer is going to be taken over, what do you mean? guest: they be -- the instructions that you are not aware of could be looking for any file that has sort password in it and sending the content back to russia or looking for credit card information or turning your computer into a slave computer they use for spam and denial of service attacks. these things are huge. we have found that have a million computers. the u.s. is one of the country's because our cyber security is so bad where they are frequent. host: who does the best job in

protecting computer security? >> right now, everyone is in a bad place. we see people identify programs that work and put them into operation. it's hard to believe and painful to face, but currently some of the big european companies -- big european countries are pulling ahead. germany says they will end up doing better than the americans because we don't have the same sort of reaction to regulation. currently, everyone is vulnerable, but france, britain and germany are beginning to pull ahead. >> the was a piece this morning written by michael chertoff, defining privacy in the cloud. he writes about the potential fracture between the u.s. and european about cloud-based privacy issues. --

host: what does that mean? guest: at the end of the cold war, we thought democracy has won. we don't have to worry about authoritarian regimes anywhere. it that turns out we were wrong. in the u.s. and europe, we sure political values. we treasure freedom of speech and believe in democracy. yet when gets into the details of things like this, we find ourselves fighting with each other and not with the people who have authoritarian views. what that means is we're moving to computing as a service. it started as a hobby. bill gates'first program was for

hobbyists. now you will see it as a service. you don't sit in front of it, you just turn it on and when it becomes a service, data processing is will be stored somewhere else. how you regulate them will be very important. our next call is from boston. caller: i have a series of short questions related to everyone using the internet. what is the threat right now to cyber attack or losing your money online or in the bank or in the financial institutions. are they susceptible right now and how much? also, where can i find out of

our resources online about what my rights are? as a citizen, in terms of is something like that happens, what the laws are and what can i do to protect myself and take pro-active choices? >> those are all good. i will try to see how many i can remember. the place to look is the ftc. they will tell you what your rights are as a consumer. there are other places to look, but i would start with the ftc. with the earlier question, you need some kind of anti virus software and the need to have a firewall turned on. you need to do the patching and updating of programs. this is something if you are using windows will happen

automatically. if you do not patch, you will be hacked. is that simple. in thexing a gap defenses and when people don't install them -- we find this all the time. firewall, patching, updating, those are crucial. >> banks put a lot of effort into trying to protect their counts. but as we all know, banks are also where the money is. so they are the primary target. at this point, for the average consumer, the need to think about your credit card, your personal data and information and how that is safeguarded. cyber criminals have so many opportunities that they are going to start at the top with the biggest accounts they confined. if you put into place this basic measures we talked about and if your bank is one of the bigger banks, they are making an effort and you are probably

relatively safe. the u.s. losses credit card holders are only responsible for the first $50 of any illegal charge. if you are using your credit card online, you have limited your risk. >> if someone has illegally tapped your bank account, what is the recourse there? guest: right now, the banks are willing to compensate people. they're concerned because of the reputation old damage to make you whole and give you your money back and keep a secret. in the bigger cases, you will have to sign nondisclosure agreements. that is a business decision on their part. but the levels are getting so high that some banks are beginning to think maybe i should not just eat the cost. maybe if you were not patching, i should make you bear some of the cost. as the losses get bigger, you may see an effort to shift it

to consumers, but right now, you are ok. host: bill on twitter asks if they will use the security to monitor and sensor the internet? guest: probably not. one of the things that has hurt the debate with the bush administration, they had the surveillance program and every time you bring this stuff up, it comes back to that. here is the law, it did not protect us. how can i trust you this time. the answer is always trust me which does not assuage people. it's a legitimate question, but knowing the folks to do this and snowing the concerns, we are not going to change the constitution. you're not going to lose your rights in this area. the problem has been that we are so nervous about government

monitoring that we have left their cells are very vulnerable. host: our guest has a ph.d. from the university of chicago and worked as a member of the senior executive service whose assignments included in asian regional security and insurgency. he is now at the center for strategic and international studies in washington where he serves as the director of their technology and public policy programs and is involved in advising congress in their debate over cider security legislation. here is an interesting headlines from time magazine -- the fbi pact while congress ponders cyber security legislation -- here is the next phone call, from a democrat in germantown, tenn.. caller: i would like to start

out by saying what happened to my count briefly. my child was on the internet and the some sort of malware began to take over the computer. it indicated there was a problem and needed to update or software. it mimicked [unintelligible] i am a banker by profession and to enter my number for my debit card -- the site itself -- but something was suspicious about the page i was looking at.

so i stopped just short of entering the number because it said you have to give us your number. we need to check it to make sure everything is ok. i called my bank and just that fast, they polled $99 for my account. they immediately took care of the problem, but i have noticed whenever i google my bank to go on line, sometimes, i am sent to that same site and it is not my bank. that is scary. i wonder if we have situations where customers are moving information overseas, they are going overseas -- because this is our personal information, getting out.

guest: right now, we are so vulnerable that it would be hard to increase it. we have to think about what are the rules for data as it moves country from country. a lot of people do not realize how quickly it moves. that cloud is just a bunch of computers in a server farm somewhere. some might be in india and some might be in california. the company shifts data around depending on the cost of storage. the data in california at 12:00 could be in india two hours later. it is going to be a problem and we have not thought through how to regulate it. the ease with which cyber criminals can spoof of bank accounts is amazing. the trick you experienced was

popular for a while and is dying down now. as the fake anti virus message -- warning, your computer is effected. the people who did that made millions of dollars. it was a few people in russia. millions of dollars of that scam. q. what not believe it. but you did the right thing. when you go to a website at of feels uncomfortable, there is something called the address bar. if it says your bank, it's probably the real address. if it's at russia, you can't look for that -- fraud is a growing problem and it is so easy to do. we've might ultimately get technology to fix it, but it is not in the cards at times in. host: would you agree that companies like microsoft and apple should make security a

priority over ease of use? guest: a few years ago, microsoft did that. you want to look at a company that changed its mind on cyber security, it would be microsoft. the difference between windows 98 and windows seven is incredible. one takes weeks to hack. it takes weeks. windows98 took a few hours. we are seeing companies responding to some kinds of risks. apple has done a pretty good job. the dilemma is you have some of the best computer programmers in the world and they are criminals. so they will look for ways to beat those defenses. as a consumer, you may not be their primary target. we have to worry about big institutions like military targets and critical infrastructure.

as a consumer, if you are trying a little bit, you will get the risk under control. >> is it true that this is one of the reasons they want to upgrade the grid? guest: they want to upgrade the grid for efficiency. they ought to call ibidem grid because you build and technology that were initially very flawed. i looked at them and saw things that you could hack 15 years ago. it is a very vulnerable and my greatest area of risk in the u.s. because is connected to the internet, it uses old software, there are problems with configuration and foreign

hackers can get in. there's no connection between it and the smart grid. you start with two separate networks and that may merge and become one network. from a practical point of view, it has never worked in the past. guest: if you want something to remain a secret, don't hook it up to the network. and this from florida -- guest: there is a little truth to that. the real vulnerability that is dangerous for public and safety

don't help advertisers that much. you have a different problem, which is the privacy problem. that is not entirely the explanation of the security problem. >> i am wondering if you could comment on it companies like life lot and their effectiveness and whether or not it is worth signing up for some of these things? >> i do not know that particular company. you might want to start with whoever your service provider is. they have the services that are going to reduce risk for you.

first, look at what you can get with the people you have a contract with and then think about these additional companies. host: if you are interested about the policies being developed, the reports my guest says help to direct are available on the internet. this is the latest. next is a call from a union, new jersey. i would like to ask about remote access. normally when you have a company looking to your computer, they come in and it normally you see your giving them access. they can access your computer

and they're not even going to be aware of it. >> most companies won't do that because they have lawyers and people are concerned about that. the companies coming in to help you are not going to take advantage of that information. the problem is that companies in the u.s. will follow the law and the cyber criminals can use that same access to get in. remote access is something you have to think about and how much you leave open -- it's probably better to be a little conservative in that department. >> we get our computer chips from china, is this company a joke what is that a security risk? guest: it is something to pay attention to. right now, it's so easy to

hack, why would you bother to supply chain poisoning? if we manage to get our act together on cyber security, that you will have to work on that. if you like comedy, the chinese have the same fear. they say all of the chips come from intel and our programs come from microsoft, you have hacked our supply chain. so it is a global problem and we need to find a solution, but paying attention to the supply chain is one of the big growth areas in this topic. >> this is a question from a twitter. guest: there are two ways to look at this. there is legitimate software that you buy and has functioned you don't know about that affect your privacy. this for the ftc and other

agencies are working with companies to roll that back. google just came out with a new privacy policy. everyone is always worried about that. then there are illegitimate programs that do the same thing and that is a crime problem. one of the funniest stories is every year, when the super bowl happens, cyber criminals look for ways to find a way to get malware related to the super bowl on the internet. host: this was the highest year of use of the internet during the super bowl. guest: if you are sitting in russia -- you have people downloading applications. some of them came from not so friendly places. i would worry more about the illegal software.

host: cyber security is like your currency -- a leap of faith. caller: i have a question as far as cyber security. am i at risk if i fill out a job application and put in my social security number? guest: could be. there are just lots of ways to harvest it. i don't worry about my social security number. i give it to people because we are so vulnerable -- if they want to get your stuff, they're going to get your stuff. that is where we are. caller: thank you for taking my

call. i think the host -- i thank the host. i'm a long time of year and this is my first time call. host: glad to have you. caller: i have two questions for the gentleman. first, popular web sites like facebook, google, we have heard of them being taken down, but have we ever heard of them being coerced like a super hacker putting malicious code directly into something like facebook or google or twitter? instead of a normal user clicking on it, they are taken to a robot website?

the second question is is there such thing -- i know this is not the best security to have, but a central database where robe websites are kept track of? where all browsers or all operating systems will alert a user if they're going to a website? i will take my question offline. guest: most anti virus companies like google have databases of malicious sites and they will do that automatically. you don't need to go and manually check. it's just too hard. on the company's being hacked and having their site taking over are having you misdirected, it happens a lot. one of the problems we have is

that it's not in the company's incentive to go out because they will lose customers. it happens, but we don't get a lot of public reporting on it. absent new legislation, we will just remain in the dark. host: the house is considering this and the senate is drafting legislation. if this is of interest, we recommend contacting your congressperson if you are interested in this. >> tomorrow, on "washington journal" -- douglas poll taken and kathleen kennedy townsend. she will talk about the birth control directives for religious-affiliated institutions. former correctional officer,

michael jacobson discusses the cost of incarceration. >> here is that wonderful moment when the senator lott revealed his nostalgia for the state to write segregationist south. >> when strom thurmond ran for president, we voted for him. we are proud of it. >> josh marshall on the internet and his website its emergence into the breaking news business. >> the media ecosystem is such a different world than it was -- it's hard to believe that is 10 years ago. things like that happen all the time now. there are many big stories we have had over the last decade more and more. we have an editorial staff of 20 people so we are breaking stories right and left.

the thing is it has almost become commonplace and it's not nearly as surprising today as it was back then. >> more tonight at 8:00 eastern and pacific. >> now, house intelligence committee hearing on national intelligence. this is about two and half hours.

>> first, let me thank you for your service to the country and pass on our thanks to the men and women who do the real work in the intelligence business. please pass along our admiration and support and thanks for what has been a very good year in the intelligence business for the united states of america. thank you. since we started this hearing last year, the very fact we have established a very professional working relationship with the community -- i think that has netted a valuable results for our national security posture. we had two bills have lots of great oversight. have been professional even in disagree and at the end of the day, that dialogue has been important for the community to

move forward. americans get to see publicly today but it is that classified work that makes eight difference for the national security posture and i think we can say we appreciate all of your cooperation and i want to thank the racking member for are democrats for making this a bipartisan effort on national security. that is refreshingly and we hope it is duplicated around this town. i'm going to get a little bit off statement. i thought the senate hearing was instructive. it highlighted some issues that deserve our attention. i have heard some of the comments made in the senate hearing and there seemed to be some finger-pointing. we are fighting a war on two fronts and is happening today.

one where countries like china have embraced economic espionage as part of a national security framework and are waging an unprecedented economic assault on the u.s. companies and their intellectual property. second, and i believe a growing threat of a large cyber disruption or attacked is on its way because of the exponential capabilities growing with countries like china. russia was good and getting better. other countries like iran are investing heavily in their cyber capabilities. relatively cheap and the big bang for the but if they're successful. i argue given me classified briefings we have had discussions with you and your counterparts in the working part of those agencies, a cyber attack is on its way. we will suffer a catastrophic cyber attack.

the clock is ticking and winding down. i have to say we have admired this problem for a long time. we have made movies about this problem for a while now. we have created working groups across every executive branch to study the problem and work on it. i saw some of the blame it going to the community and i will take exception to that. i need you all, given the resources you have any authorities you have copy of that a phenomenal job on what is one of the hardest problem sets i have ever seen. the target set is large and growing. i do believe our problem here is the united states congress. there are some 30 cyber bills out there. we have looked, state, and address the problem and there are lots of approaches.

at the end of the day, we must act. this is the only committee that has produced a bipartisan project that is nearly focused and takes a small step to allow that she to to cover the dot com realm. i hope next year we can brag about the working have been to keep american network safe. i want to talk a reconciliation and my question. i want to commend the administration for keeping congress fully informs. they did not do well on the advice and counsel part. in a bipartisan way, some very strong conversations about opposition to the passport on reconciliation with the taliban -- generally, the comments were

we were going to legitimize and non-state actors that we have been trying to delegitimize for the last 10 years. it sends a horrible message to the people who have been with the united states in afghanistan like women, and entrepreneurs, people believe democracy would bring a better day in afghanistan. normal afghans do not want to fear and be intimidated in their daily lives. it crosses a dangerous line and a policy change in the u.s. i find disturbing. it sends a horrible message to the world's backers at soldiers, prisoners, citizens, are now to be treated like commodities. and it's a horrible precedent and one i hope this administration strongly reconsiders. leslie on iran -- nuclear bomb

triggers -- lastly, on iran. leadership --nal they clearly and simply do not have a peaceful intentions. there clearly a state sponsor of terrorism and they are doing so at a breathtaking pace. iran has systematically been involved, according to a state department report based on department of defense statistics, has killed and many -- as many in just iraq alone, 600 u.s. soldiers your proxies' and introducing weapons systems that are legal -- and early fall. they sponsor two of the most dangerous terrorist organizations and have bankrolled the violent syria not regime. following north korea's lead,

had actively sought to subvert iaea and threatens to choke off the energy supply by closing the strait of hormuz and their navies dangerous tactics in the persian gulf put our sailors at risk. in october of this year, and this is what i find so shocking, the iranian operatives planned to set off a bomb and a washington d.c. restaurant and assassinate the saudi ambassador to the united states and kill callus american citizens and thought it was worth the risk. most concerning is how disjointed our policy on the middle east this. i had a very senior arab intelligence official tell me if i could make him king for a day, what would you ask of the united states? he said, you could please tell me what your middle east policy

is. that makes you pause given the nature and danger of the world is evolving in the middle east and just how serious the consequences are for our national security. i will hope to flesh that out today and are questions. i would like to congratulate congress for its to bipartisan bills pushing the at the illustration for sanctions. the second round is having a devastating impact. given the cuts that are coming, we think we worked well with the intelligence community last year in a bipartisan way and found over a billion dollars in savings through efficiency without impacting the mission. we think we gave it the office to the world for at and we hope to work with you again to say that we can find some efficiencies but we also ought to make sure we make the right investments in our intelligence

community to give policymakers an opportunity to respond as opposed to react. thank you for being here about four to having discussions of those issues and many more. i look forward to hearing the responses from all of the members today. that, i will turn over to our ranking member. >> on my years of the intelligence committee, i have seen before of view -- i think your leadership in the intelligence community is as good as i have seen it with your members. we look forward to an open hearing. we know there are many things are classified that we cannot talk about to protect our country, but it is important for the public to understand as much as they can add to inform them on why intelligence is so important.

the landscape has changed since the last hearing we had a year ago. 2011 was an important year for the intelligence community. for the heroic take down -- from the heroic take down of a solid bottom, the arab spring, and the change of leadership in north korea -- these things impact national-security. the intelligence community has not been able to protect -- to predict all these events, but it is our job to give them the tools they need to take action. the professionals and the intelligence community meet that challenge every day. when chairman rogers and i took over leadership -- took over leadership, we made a commitment to bipartisanship. we are working together with other members of the intelligence committee as one team, republicans and democrats come to make a real difference and do what is right for the men and women risking their lives to keep our country safe. we made a commit to pass an

intelligence budget every year, to insure proper oversight, and provide critical, federal guidance. we passed not just one, but to intelligence authorization acts. with overwhelming bipartisan majorities. we had close to 400 votes in favor of each bill. in this era of partisan politics, that is remarkable. last year marked the 10th anniversary of the september 11 attacks. we learned the intelligence community was not sharing critical information that may have been able to prevent the tragedy. we spent the last 10 years trying to change that. the raid and that eliminated the osama bin laden proves we have come a long way. it is clearly the most monumental intelligence achievement in recent memory and was the result of far reaching timor.

our intelligence professionals work together across different agencies to pull together hundreds of pieces of information. they were methodical and persistent and used every authority they had. they figured out where he was hiding and brought him to justice. but the threat from foreign terrorists as well as homegrown violent extremists still exists, and we cannot let our guard down. we must work with our allies and stay vigilant as we stop those who want to hurt us at home. the intelligence community must continue to work hard to analyze and share information about the threats we face on our own soil as well as from the globe. no one could have predicted a street vendor setting himself on fire would spark massive protest across the middle east and north africa, ushering in the turbulent era of spring. the leaders of tunisia, egypt,

and libya are no longer in power. they're attempting to embrace democratic ideals, but their future is uncertain. we must keep up with events in yemen, where al qaeda in the arabian peninsula still plotting to kill americans and disrupt our way of life. even with the death of the charismatic al qaeda leader who inspired people to kill americans, we still have more work to do. our intelligence community must have global reach and not have the capability to address a ever-changing variety of threats, including iran. iran is a definite threat to world peace. they're trying to create nuclear weapon that could destabilize the entire region and threatens national security. s iran has become more brazen in their recent actions.

their recent actions cross the line of state-sponsored terrorism and that's why iran cannot be trusted and should not be allowed to critical weapon. a nuclear-capable iran threatens our safety as well as the safety of israel and the rest of the middle east. the united states and the rest of the world must prevent them from creating a nuclear weapon. i agree with the secretary of defense, leon panetta, when he talks about iran. he said there are no options that are off the table as it relates to iran. north korea, with its new e on the leaders threatens to share ballistic capabilities with iran and syria, further complicating the situation and threatening stability in the region. the intelligence community must keep a close watch on this volatile situation. china and russia are joining iran with agressive espionage and depleting america of its voluble intellectual property a leak -- and using technology as a weapon.

a review last year highlighted how china and russia are using cyber hackers to steal ingenuity from the safety of our own soil. cyber attackers are trying to capture america's cutting edge of resources and harness our competitive edge. some are calling it a cyber cold war. $300 billion of intellectual property instilling from american companies every year. every day, u.s. web sites and our nation's networks are threatened by foreign governments and criminal groups trying to seal -- trying to steal our money or shut down our networks, affecting millions of americans. we know the threat is real because websites have been compromised. the nasdaq and the international monetary fund has been hacked. the white house understands the cyber backbone of our critical infrastructure must be protected and we have a long way to go. this is not the time when the

american economy can afford more instability. now is the time to act. the intelligence committee at -- passed a bipartisan all legislation by a vote of 17 to one in our committee. the cyber intelligence sharing and protection act, which is the bill, gives a 42 share cyber threat authority -- gives us 42 share a as cyber threat information and protect clients from cyber threats, trying to defeat or disrupt or otherwise disabled. this allows the private sector to benefit from the expertise of the intelligence community on a voluntary basis. the legislation will allow companies that power our homes, provide water, and manage other infrastructure to protect themselves from cyber threats. the bill also protects privacy

and civil liberties. i applaud the members for working with us to deal of privacy and of civil liberties. another critical component is space. in 2011, the department of defense and director of national intelligence published the first joint national space strategy. a good start, but we need better definition as to the way ahead and how it leverages our commercial industry. the expertise perfected by the space industry drives innovation in many critical areas. because of trade restrictions, we're losing our competitive edge on a daily basis. our systems are reliable but too expensive because there is no competition. the result is the united states cannot effectively give satellites in space because launch costs are too high and it

is unpredictable. we must support this industry to promote funding to help it compete domestically and internationally. current restrictions prevent our commercial imagery industry from selling as best product. today, france is marketing in this creek -- marketing its industry and companies like -- countries like china are purchasing french information. u.s. companies must be allowed to compete in a free market. competition will promote innovation and aerospace industry. the president has stated he wants to curb and trent -- curb and trim defense spending. we will soon have the opportunity to review the president's budget request for fiscal year 2013.

in this tight environment, we're committed to giving intelligence professionals the capabilities they need to keep our country safe. our nation deserves no less. look forward to hearing from you. thank you for coming before us to educate our public on the issues of intelligence. >> thank you. i'm going to turn it over to director clapper. >> thank you. thank you for inviting us to present the 2012 threat assessment. let me say to both of you that i completely agree with your characterization about your leadership of the committee and the manner in which we are working together. we all appreciate that, specifically to the ranking members comments that you have more than lived up to your initial commitment to make this bipartisan and a partnership.

acknowledging that we're not always going to agree. i am in joined today by my distinguished intelligence community colleagues. to my right, the cia director, david petraeus. to his right, general ron burgess and a director of the fbi, bob mueller. we are most appreciative of your acknowledgment of the work, sometimes under very hazardous conditions, done by the men and women of the community around the world. we will not attempt to cover the full scope of worldwide threats in these brief remarks, so i would like to highlight some of the issues we identified for the coming year, some of which you have done for us.

never has there been in my almost 49-year career in intelligence -- today is the 51st anniversary of my enlistment in the marine corps. the time i spent in intelligence, i do not recall a more complex and interdependent are re of challenges that what we face today. the capabilities, technologies, know-how, environmental forces are not confined by borders and go with astonishing speed, as we have seen in the past year. never before has the intelligence community been called on to master such complexities in such a resource-constrained environment. we are rising to the challenge by integrating the intelligence community, taking advantage of new technologies, and planting new efficiencies, and simply working hard. maintaining the world's premier

intelligence community in the face of these issues will be a challenge. we will be facing risk more than we have had to in the last decade. when i say we, i mean the legislative and executive. we began our threat assessment as we did last year with the global issues of terrorism and proliferation. the intelligence community sees the next two to three years as a critical transition phrase -- transition phase for the terrorist threat, particularly al qaeda and a like-minded groups. with the death of a saw but lawton, the global g hottest group lost its most iconic and inspirational leader. -- the global jihdist group has lost his most iconic an inspirational leader. by focusing on smaller plots, al qaeda still remains a threat. as long as we sustain the pressure on it, we judge core al

qaeda will be a largely symbolic importance to the global movement. small cells and individuals will partially drive the agenda. proliferation and the efforts to develop, require or spread weapons of mass destruction is a major global strategic threat. among asian states, iran's technical offenses -- iran is capable of producing no. 3 of that export of ballistic missiles and associated materials to several countries, including iran and syria, show the reach of the north's proliferation of attendees. we do not expect. i would note that in this year's statement for the record we elevated our discussion of cyber threats to follow terrorism and proliferation.

the cyber threat is one of the most challenging ones we face, as you alluded. we foresee a cyber environment in which emerging technologies are developed and implemented before secure the responses can be put in place. among state actors we are particularly concerned about entities within china and russia conducting intrusions in the u.s. computer networks and stealing u.s. data. the growing role non-state actors are playing in cyberspace is a great example of the easy access to potentially disruptive and even lethal technology and know-how by such groups. two of our greatest strategic cyber challenges are, first, definitive real-time execution of cyber attacks as knowing who carried out the attacks and where these perpetrators are located.

and second, managing the enormous vulnerability is within the supply chain for u.s. networks. briefly looking geographically around the world and afghanistan during the past year, the taliban lost some ground, but that was mainly in places where the international security assistance forces were concentrated. the taliban senior leaders continue to enjoy safe haven in pakistan. isaf's efforts to partner with afghan national security forces are encouraging but corruption and challenges continue to threaten the force's operational effectiveness. most provinces have established basic government structuresisaf and support of afghanistan's neighbors, notably in the together pakistan, will remain essential to sustain the gains that have been achieved. and although there is broad international political support for the afghan government, there are doubts in many capitals, particularly in europe, on how to fund afghanistan initiatives after 2014.

in iraq, violence and sporadic high-profile attacks continue. prime minister maliki's recent aggressive moves against the sunni local leaders have heightened the tensions. those pushing for change for confronting ruling elites, lack of experience with democracy, stalled economic development, military and security force resistance and regional power initiatives. these are fluid political environment that offer openings for extremist to participate in political life. states where authoritarian leaders have been toppled like tunisia, egypt, and libya, have to reconstruct a political system through complex negotiations among competing factions.

in syria, regime intransigence and social division prolonging internal struggles and could potentially turn domestic upheavals and to regional crises. in yemen, although political transition is underway, the security situation continues to be marred by violence and fragmentation of the country is a real possibility. as the ancient roman historian once observed, the best day after a bad emperor is the first. after that, i would add, things get very problematic. the intelligence community is also paying close attention to developments across the african continent, throughout the western hemisphere, europe, and across asia.

few issues are self-contained. virtually every region has a bearing on concerns -- terrorism, proliferation, cybersecurity, and instability. throughout the globe, whenever their environmental stresses on water and food and natural resources as well as health threats, economic crises and organized crime, we see ripple of that -- affects around the world and impact on u.s. interest. it is important to remind this distinguished body and the american people that in all of our work, the intelligence committee strives to exemplify american values. would carry out our missions with respect will lot and protection of civil liberties and privacy. that flood leads me to a crucial recommendation on our highest legislative priority this year and requires the support of this committee and both houses of congress. the faa is set to expire. title 7 allows fisa to collect information on international terrorists and other important

targets overseas. the law authorizes surveillance of non-u.s. persons overseas that may have connection to an information about threats such as terrorism and proliferation. it also provides for cumber hands of oversight by all three branches of government to protect the privacy and civil liberties of u.s. persons. the department of justice and my office conduct extensive oversight reviews of these activities, and we report to congress on implementation and compliance twice a year. intelligence collection produces crucial intelligence that is vital to protect the nation against international terrorism and other threats. considering whether there are changes that could be made to improve the law, but our first priority is reauthorization of these authorities in our current form. we look forward to working with you to ensure the speedy enactment of authorization reauthorized in the act so there is no interruption in our ability to use these authorities to protect the american people. i will end of this brief statement where i began. the fiscal environment we face as a nation and in our intelligence community will

prove -- require careful identification and management of the challenges the ic focuses on and the risk we must mutually assume. with that, i thank you and members of this committee for your dedication to the security of our nation, your support for our men and women for the intelligence community and for your attention today. my colleagues and i look forward to your questions in our discussions. >> thank you very much, director clapper. we will begin with 10 minutes and early bird rule.

general petraeus, you have the most recent, direct involvement. is there a good reason for us to be in afghanistan with military forces that are fighting and dying? if so, what is the reason? >> there is indeed. we went there for an important reason. we are still there for an important reason. that is to ensure that afghanistan does not become a sanctuary for al qaeda and other extremists so that they can do what they did prior to 9/11. i might want to clarify a couple of points as well that you have touched on.

i would like to thank the intelligence committee, which has been part of important progress against extremists. thank you for your support of those men and women in a variety of fashions, most materially, the two authorization bills. we intend to work hard to keep the committee fully and currently informed and we will strive to do that. >> i appreciate that. time is ticking. >> with respect to the port, that is done by a u.s. the best the report, that is done by a u.s. element. it is interesting. you should have the morning that is on the top of human intelligence that says, this individual may have thought to influence as well as to inform.

these are individuals who have been captured and knew there was some risk of that. in some cases they have a message. it is interesting to contrast that with their messages to each other. we have insights into that as well. in many cases they are apprehensive. it would be an understatement because they have been targeted effectively by isap and afghan special operations forces. what they did say is not different from what we have observed in other documents. there has been progress in the taliban. the progress remains fragile and reversible and the enemy is resilient. that was also in the nia, was for post-2014. the risks of various scenarios

were postulated. >> my time is rendering. the question i have is this announcement yesterday. it's the u.s. announces we will and combat roles and your a tribal leader in afghanistan, what effect does that have as to what side you will support? the policy adopted by the leaders of the coalition with president karzai at the lisbon summit.

we embarked on a policy of transition. there is a subsequent transition being completed right now.

the idea is that we gradually stop leading combat operations. it is a successful series of transitions that take place as a result of the process between afghanistan and isaf leadership. his comments have been more than over analyzed. >> thank you, mr. chairman. thank you for your service to our country. it is appreciated. i have a couple of questions. the plot uncovered last year to assassinate the saudi arabian ambassador in the united states.

what has emboldened iran to move in that direction? do you assess iran's intention to plot future attacks? >> that was reckless. it was a case where someone was going to recruit a hit man to assassinate the saudi arabian ambassador to the united states. it reflected a degree of restlessness that is more pronounced than we have seen in the past. the rest -- the revolutionary guard could have proxies' -- prst organizations 0

oxies amongst organizations. we have seen a bit more of that than in theears i past. "washington journal -- >> the iranian narrative is that the arab spring represents an opportunity for them to extend their reach. they also feel somewhat under

siege and the international pressure that has been placed on iran. >> general clapper, do you see any indication that this activity will raise its ugly head again? hezbollah has been as aggressive as ever as been in the last decade or so. i expect we will see more of this. we are not quite as preoccupied with al qaeda. this will morph to other forms of non-state activities.

>> we know we cannot continue to grow our budget and our work force in the manner we did after 9/11. director, have stated we need to find efficiencies in savings. i am interested to know what actions you have taken to identify and find some of those savings and what we can expect to save. if you can point to any successful intelligence community-wide efforts in regard to enterprise licenses that have allowed us to capture economies of scale and improve our cross agency abilities. >> next week, we will be rolling out the national intelligence

program budget as part of a larger budget. we will have subsequent hearings on weapons. we have worked hard as a corporate body to lay out a road map for how we can reduce an achieved efficiencies. the big idea for the intelligence community is this notion of going to be cloud with the kitchen to security, identity management. having a single i.t. enterprises, a subject we have talked about for years. we have the leadership to do it. most important is director petraeus' commitment to decline

this intelligent enterprise. there are huge savings here, particularly in the i.t. arena. that is the big idea looking ahead. >> thank you. >> ms. myrick. >> thank you, mr. chairman. i follow what is happening with iran in south america. what they are doing in met this -- mexico relative to us. d.i.a. has worked with homeland security on the southwestern border. i understand you want to terminate those operations coming up. i recently sent a letter to you and to the office of management

and budget asking if you would look at it simply because of what is happening with iran. we have all been talking but it this morning. it does concern me. the attack by being -- a tax relic into the saudi arabian ambassador -- attacks relic into the saudi arabian ambassador, it seems like being on the border will lessen the threat in the sense that we have a better chance of stopping something. i also have the question of what are they going to do. it has been answered relative to what they are going to do in the united states it seems like this is an important mission in me

some insight as to why this is happening and what will take its place. >> it is an important mission. we are in consultation with the director of national intelligence. the defense intelligence agency's role in terms of how we did some businesses along the borders, we provide research and development technology. we come up with the capability. once we have the capability, who best inside the intelligence committee should own that capability i understand you have submitted a letter. we are in the current discussion on that now. >> we look at what is happening in egypt with the muslim brotherhood. general clapper and i have discussed this many times.

i do not want to see the same thing developing in the united states. it is obvious what their intent of -- intent is relative to what they want to do to us over the long term. it is a major issue with me. eighth thing you can get back to me on that, i would appreciate -- anything you can get back to me on with that, i would appreciate. how are they not being up front with us? they continue to supply them. we have the 3 step policy with russia. what is happening with that? >> russia has been protective of the assad regime, as they have been with the security council resolution. that stems from a long and profitable client relationship, which they want to preserve.

that is what that is about. just a general of version when they have the chance to be assertive in the world forum. >> where does it stand relative to what we are doing with russia, not just syria, but the whole situation with russia? are we doing anything to make any progress? they seem to be adamant in everything they do. >> the new start treaty could be seen as a positive. in truth, it was not done for altruistic reasons. it was done for pragmatic, budgetary reasons. it is an area where interests converge and we agreed. the russians are paranoid about missile defense.

and the implications that has. they over analyze and see that as a profound threat to their status as a national power. where interests converge come there will be agreement. there will be many cases where they don't. >> you have heard it many times, but we do appreciate you. >> another example of a cooperative endeavor is the norden distribution network. one of the ways -- the number distribution network. pakistan has closed the nato lines of communication that run through pakistan. in this case, it is not in russia's interest to see afghanistan fall to the taliban or to see the narcotics

industry or extremism penetrates further north into the central asian states. that is an area where they have been cooperative because there is a commercial interest. there is a huge security interest for us to engage there. >> thank you, mr. chairman. gentlemen, i want to thank you for your testimony and the work you are doing on behalf of the country. we are greatly in the deck of the men and women who do this day in and day out. we talked a lot about cyber security here today. it is appropriate that we are focusing on the serious threats that are facing the country today. can i -- i appreciate the work

you are attempting to do in this area given the constraints you have and not having the proper authorities. we have to redouble our efforts in any way possible. i want to focus on the issue of cyber espionage. that is happening right now to the tune of hundreds of billions of dollars a year. adversaries are stealing our intellectual property, particularly those that would affect our national security. in october of 2011, the national counterintelligence executive indicated china and russia are responsible for an order -- for extensive misuse of cyber networks and u.s. intellectual property. what do you recommend to further protect against cyber and in

large. how can you protect against cyber espionage and that? >> we agree with your characterization. the general has characterize what has gone on here which the chinese. it is probably the greatest purging of wealth in history. it does point out the need for a rational and comprehensive cyber protection policy for the country, which does account for due consideration for civil liberties and privacy. i like to get specific about things and try to envision what

can be scaled up. i have always counted what the former debt -- former deputy of the kids did. -- former deputy of defense did. it is to provide direct information and advice on the larger infrastructure beyond that of the government. that kind of approach is what is workable. the ranking chairman at alluded to the many bills, 30 or 50 or so, in the congress. there is one proposed by the administration. this is a seminar session -- there was a seminar session this week on the subject.

the senate is trying to arrange a similar session in the house. there are some profound policy issues, who is in charge issues that we in the intelligence committee -- intelligence community can recommend. the way we are set up now to react and respond to foreign and domesticeffort across the intele community. the fbi is a huge player here, and the department of homeland security. but it is clear from all but we have said, and i hope that the predictions about a massive attack didn't become a self-a filling prophecy, but, clearly, everyone's attention is alerted to this, and we do need to do something, but as far as what to do, i would just say that this

is a good model, and it connotes the organizing principle i think of the importance of the partnership between the government and all of the private sectors. this cannot be done all by the government, all by itself. >> my time is almost up, but i think you for your thoughts, and i am very pleased that this committee passed the bill from the chairman, the ranking member, working on the information sharing side, the pilot program, and hopefully that will be a great success. a big we have this very strong on the information-sharing side, and i really do appreciate the time and effort and the focus that this committee has put into this issue. i thank the chairman and the ranking member for their collaborative work on this. i have other questions that i will submit to the record. i am concerned about supply-

chain issues, but i will submit those for the record, and i yield back. >> thank you. >> gentlemen, thank you for coming. i had something that wanted to ask and then to get to something broader. with respect to the afghanistan, has the analysis been amended as to the capacity of the karzai government to control their country over the last few months that would have given rise -- i know, david, there was what was said yesterday, a startling statement. has the assessment changed, and if so, why? >> congressman, i think it was a startling over analysis, not necessarily a startling statement, if you go back and read what he said. this is exactly in line with the policy. we started back in the summer of 2011 transitioning the

leadership to the afghan forces, progressively, to completed by the end of 2014. >> i understand it, david. having all troops out by the end of 2013. >> he did not say that. i think he said all troops, withdraw forces, by 2014. there has been something to indicate something would continue. the leaders of other major coalition members have signed an agreement with president karzai. >> so this has not dramatically changed from what it was over the last several months? >> no, sir. >> ok. with respect to iran and the leadership there, given that they have got nothing to lose at this stage if they move down this path with sanctions and others, can you give us some sense about what a change in regime there would have on iran

and their intentions? >> well, sir, i respectfully take issue with the notion that they have nothing to lose. i think they have a lot to lose, and i think as the international pressure ratchets up with the sanctions, particularly the ones that are in the process of being implemented take hold, they have a lot to lose, and i think the economy is already seeing the effects of that with the evaluation of -- the devaluation of the real. they're having difficulty doing financial transactions, so they are already paying a price. we also understand there is debate and dissension within the iranian leadership hierarchy. there is a question, as we discussed some yesterday at another hearing about the extent to which the iranian leadership,

notably the supreme leader himself, just tell connected he is with reality, what kind of information he is getting. i think there are growing signs of dissent among the iranian populace because of the impacts that all of this is having on their quality of life. >> and syria? >> well, syria, and one reason the iranians have expended a great deal of time, energy, resources, and people on trying to prop up assad is because of having access to the territory and also as another client, so they are very concerned about keeping assad in power.

>> earlier, you said as resources shrink, we are going to have to accept risks. how are you going to communicate with decision makers risks that we are going to have to take because we do not allocate resources to those risks, and can you give us some for their sense of how you are going to approach this sense that we as a community are not going to of the resources that we might otherwise enjoy it? >> well, as we always have when we have gone through these cyclical patterns of expansion, which we have done over the last 10 years, every year the community has gotten more money and more people. we went through this in the 1990's after the fall of the wall, and then we had to take reductions, which, frankly, we did not manage very well, so, for one, we're going to try to profit from that experience and not neglect things that we did then, try to preserve and

protect first our most important resource in the intelligence community, which is our people, and those resources and capabilities that provide as a global capability so that we can react and respond anywhere in the world. we do not cover the earth like sherwin-williams paint. there are some things we will pay less attention to, less critical problems, and we are not going to do more with less and all of these other cliches. we will simply have less capability, so in a closed environment, we would be able to discuss this more when we get our budget deliberations, and certainly, we will advise the white house and certainly you as to where we may be taking some risk. >> well, gentlemen, thank you. i would be derelict if i did not mention that across the idea is the financial statements of organizations are not audible at

this point in time. better i.t. systems and better control would allow all of us to have a better sense as to where all of those monies are going. >> sir, you're absolutely right, and this is me the opportunity to thank you and the act for the treasury, what is crucial for walkability. we will be discussing with you in our fy 13 budget something we need for financial management. >> thank you. we have had some pushback from the department of defense on that, so thank you. mr. chairman? >> thank you, mr. chairman, and thank you, gentlemen, for being here. i think that open hearings are very important for the public to hear some reports from the intelligence community, so i think you for coming. there have been recent media reports that indicate that nypd, new york police department, used

a biased and misleading materials to train officers on islam, and last year, i ask you, director, about a similar situation in the fbi, and i have a couple of questions, but also, director petraeus, some reports have discussed ties between the police department and the cia, and i will have a couple of questions on that, as well, but, director, since our last discussion about this, what steps have been taken to standardize things in the fbi says things like this do not occur, and what is the review about the training that we discussed, and when will we see a copy of this review? >> congresswoman, as we discussed before, and you were aware last summer we had indications of problems in terms of our training in this area, and we developed a two-step process to respond. the first was to look through

our materials and put together a panel of experts, both from within the fbi and also from with outside the fbi to look at our training materials and to identify best practices when it comes to training in this arena. so that any training in the future will be done according to the guidelines that this panel had put together. secondly, we undertook a review of the training that has been done since september 11, and to look through those materials and determine those materials which were inappropriate in some way and to make certain that they did not show up in our training in the future but also to assure that any training that had been done pursuant to that was rectified. we went through approximately 160,000 pages of materials that have been used for training at the bureau in the last 10 years, and less than 1% of those materials has inappropriate

material in it. we also have been disclosing these training materials over a substantial period of time in response to requests. the review that dimension is going into its ending stages, and my expectation is the next few weeks or months, we should be completing that review, at which point in time we will begin a brief you and your staff as to what we found and what we anticipate doing in the future. >> thank you. thank you for your attention to the issue. i appreciate it. director petraeus, i am wondering if your officers have had any involvement in the nypd trading on islam, and in addition, the process reporting assignments of the cia officers detail to the nypd is being curtailed and early april, and i am wondering what that

individual was doing there and if that report is correct. >> well, thanks very much. on the first question, i need to get back to you on the record on that to make sure that i have the absolute, precise answer on it. on the other issue, what i would say as a reprieve to the committee before, has looked in the personnel to provide personnel to new york's finest, given how new york has been such a prominent target of extremists. determined there was no violation, and for what it's worth, one person who has been there on a fellowship over the course of the past year will rotate back at the completion of his tour this spring and will insure the liaison between the agency and new york's finest.

another mechanism that ray kelly and i have established. >> director clapper, it says you did not like this. >> i said it was a bad optic. an investigation, which i read, found no illegality, and the other concern i would have is the president and a resource- constrained environment of other police departments asking for similar support from the intelligence program -- the other concern i have is the precedent. i think this was something we have a hard time sustaining. >> thank you. >> if i could follow up on that, congressman.

i think it is fairly reasonable in the wake of something like the 9/11 attacks or all of the intelligence and law-enforcement agencies try to figure out how they can help the city that was the object of that attack in which has continued to be the object of that attacked, so i shall not apply by my statement but this was something that was untoward. again, as i mentioned, no violation was found. but what we have found is still an efficient and effective way to ensure that there is the kind of liaison that is necessary, and it goes on all around our country, but without the provision of someone to enforce this. >> there is controversy around the demographics unit at the nypd and their relationship and appropriateness of their activities regarding the muslim community. i just wanted to make sure that we're paying attention to all of these civil liberty issues. >> understand fully. thanks. >> i think it is good to note

publicly that his agency -- this agency has been very good. the director was actually very good when the report came out to make sure that we had access. we were all concerned about it. i think that was handled and exceptionally well, and, again, the ig at the opportunity to come to the committee and speak about it. mr. king? >> a truly outstanding job in fighting counter-terrorism. thousands of police of this is dedicated to this. there have been a number of attacks against new york. they have been stopped due to the cooperation. i believe the relationship with the cia has been extremely helpful and beneficial, and i think it was extremely irresponsible by the president some of the allegations they have made. i would like to put it in the record. this is a depressed last august

23, quote, the nypd moves courtly in muslim areas. the new york state police department is targeting ethnic communities, running afoul of civil liberties. these operations have benefited from a president and help of the cia. there is a blurring of the line between foreign and domestic spying. on january 27 from the associated press, "the general completed an investigation -- an investigation, and it showed they collaborated to scrutinize muslim communities, and they a programs which have angered muslim communities. we're deeply troubled by the ap press reports that the newark police department with the help

of the cia has been collecting information on the muslim community in new york city and surrounding areas. this would be a violation of siderolites and a number of federal laws." they then called the attorney- general to say that the nypd along with the cia have engaged in efforts to collect information on the muslim community in new york and other jurisdictions. recently, "the new york times" said they have an unusual and highly troubling relationship. i think it is disgraceful that the media has carried out these false reports. the cia can defend itself. the nypd can defend itself, but these lines cause such confusion in the muslim community, and it makes it harder for the nypd to carry out their job. i wish members of the congress before putting out these press reports would look at the facts before reporting them. i just want to go over would you, director pretorius, that

the inspectors said there was no violation, is that correct? >> that is correct, and if i can point out, congressman, we should remember that the ig is an independent person. he is the only other one other than the director who is nominated by the president and confirmed by the senate. >> no violation of the act. there was also no executive order violated by the cia or the nypd? >> that is correct. >> did the inspector general of all find any information that the cia engaged in any spine or any type of clandestine activity on its own or with the nypd? >> no. >> was there any evidence the nypd in any way violated or abused its relationship with dca? >> no. >> i think it is very important that this be made known and again and again because this is causing more problems within the

moslem american community and is allowing politicians to take cheap shots at the nypd. again, they can handle themselves, but it makes it difficult to carry out their job. we have been attacked twice. i know with the nypd is doing. obviously, there has been legitimate criticism over the years, but to be spreading around lies with spine and acting as if this is something unusual, to me, it is disgraceful. i know that "the new york times" is engaged in a campaign against the nypd, but there are real and ongoing threats, and as far as i can tell, i would hope that the cia do nothing to diminish the level of support for the cia or the nypd. >> as a matter of fact, congressman, i went up to new

york city myself to say, and i met with the commissioner and met with other law-enforcement personnel. my impression is that there is a very good and very productive and very proper relationship between the various law- enforcement agencies, and that includes the fbi, by the way, and also with elements of the intelligence community that are appropriately providing a proper way products of intelligence collections and analysis. >> thank you. i think it is important that this be on the record because bill level of distortion has been out there. the ap, what they disclosed, it was totally untrue about spying from the cia. they reported back that the council on islamic relations, care, was also called into investigation, never mentioning at all, the moslem rights organization, they never mentioned that they were an

unindicted co-conspirator, and the fbi has been cut off their situation with them. that is why we as a committee need to stand up and speak out and line up with those you are doing their job and not deal with these false press reports. i yield back. >> thank you, mr. king. >> thank you, gentlemen, for your service to the country. general petraeus, i have three questions. my chief concern about afghanistan is a safe haven in pakistan, and my questions are these. first, do you anticipate any change in the status of the sanctuary that the insurgency finds in pakistan, and second, if we cannot expect there will be much of a change in that safe haven for the taliban insurgents a, can we have reason to expect that the afghan forces will be able to defend against these ones we draw down our troops?

and finally, ensure the afghan special forces be allowed to take the fight to the enemy leadership in pakistan and the sense of community from risk that the senior the taliban leadership in join in pakistan? >> well, first of all, there is no question that there are elements in pakistan that have enjoyed a sanctuary and that cause major problems for afghanistan and for the afghan and coalition forces that are seeking to provide security to allow the development of the new afghanistan. having said that, there is no question that our pakistan partners have confronted a number of the extremist organizations there, foremost among those al qaeda, and that cooperation does continue in various forms, but also the

taliban, pakistan, and a number of affiliates. that organization is focused mainly on destabilizing pakistan but not entirely. it has caused problems for afghanistan, as well. but when it comes to the afghan taliban, there is no question that more needs to be done to them. there was a recent case where a very significant improvised explosive device expert and builder has been detained in pakistan. again, that is a very significant step. there were a couple of other developments recently, but i think we should be cautious and we anticipate in terms of the ability of our pakistan partners and in some cases their willingness to go after again the network in the tribal areas of the afghan, talent -- pakistan, and waziristan. . the operations against affiliate's, and they will try

to squeeze some of these others, but, again, but thought they would go in and go after them is probably overly optimistic. if no change, the prospect of the afghan security forces can continue as in the past, i think that will depend on the amount of assistance that is provided, the character of that assistance, if you will, are there enablers in addition to just, say, money or equipment or various traditional forms of security assistance. we have obviously nearly three years before the end of 2014 to develop that kind of what that will consist of, noting again that not just president obama but the leaders of the other major coalition countries, the nato forces in afghanistan have all pledged continued support in varying forms or afghanistan beyond the end of 2014. with respect should the afghan

forces be allowed to go, well, i think that is obviously a question for afghanistan, but i think they probably have sufficient fight on their hands without invading the soil of another country, even as a significant as the threat that is posed by some of these safe havens across the border. >> i was not suggesting so much an invasion as whether they should be able to carry targeted actions against leadership figures and the network, for example. >> well, look, this is probably one that is best continued in a closed session i think to flesh out all the different issues that are at play here, and i would ask that we probably do that. >> thank you, mr. chairman. thank you. >> thank you, mr. chairman. i find it rather ironic that 10 years ago, the intelligence community was chastised for

stovepiping, for holding information back, and just to expand on what mr. king was pointing out, here we have the various intelligence agencies that are trying to work with the local police departments to try to prevent police attack, the thing they're criticized for 10 years ago when 9/11 happens, and now they are being criticized for doing when congress and the american people have asked them to do, which is to work as closely as they can to protect civil liberties but to make sure that we are sharing information across the board, and as it relates to the folks i represent, i hope that folks are focusing within the intelligence community on the activity of these drug cartels who are now operating in mexico and other parts of south america who are also operating in california and

parts of the west, and i assume all over the country. every day, innocent americans are being killed in this country because of foreign drug cartels and other criminal activity, and so my only request of all of you in the intelligence community is that you please look for ways to cooperate and share information with the folks that i represent and the various sheriffs, a district attorneys, and folks that can be helpful, if they need information on these cartels or other extremists, or if mr. king's constituents need help. i hope you are hearing from a least some of us on the committee that do not want you to take this incident that occurred in new york or in the false press reports that are out there and somehow think that the congress are now asking and that the american public are not

asking to start stovepiping again and not share information with our local law enforcement folks that are on the ground. >> sir, if i may say a couple of things, and i would like to general petraeus to add to this. this is one of the profound changes that has occurred in the intelligence community in the last 10 years, which was not the case prior to 9/11, the sharing of information. i take this as a major responsibility that i have and my staff to foster those interactions. i have engaged a lot with what i think it's a great organization, the international association of the chief of police, very sophisticated in the ways of intelligence, and one of my breasts for 2012, working with the dhs and the fbi, to refine

and bring greater fidelity to that relationship. so i take your point, whether it is drugs or any other issues connected with terrorism or preparation. dave? >> well, i think, the first thing, the advent of the dhs in particular and all that has followed in the wake of that have brought about considerable progress in intelligence sharing and in intelligence integration. obviously, we are all committed to furthering that progress in the years ahead. with respect to your comments, congressman, i was just in mexico, in columbia, and i met with the heads of states in each of those countries and met with the intelligence counterparts. in fact, we are hosting this afternoon a delegation from mexico in return to discuss the way ahead in some of the areas we were discussing their.

i have to say, i was impressed by the concept that the mexican leadership has adopted, the compliment the approach is clearly in the right way forward, and also by the establishment of institutions, still in the early days in some cases, but the dramatic expansion of the national police, for example, of the penitentiary system, the corrections system, the attention to the need for various additional laws and so forth, all are exactly what are required to stem what is obviously a very, very serious challenge, as manifested by the violence and the breakdown of the rule of law in some of the areas in mexico. columbia on the other hand has adopted a comprehensive approach for a number of years. it is now looking for it to go to the next level, and we are looking to partner with them. this integrates not just those from within the agency but

throughout the intelligence community and, indeed, with law enforcement agencies, as well, and that is something we continue to focus a great deal of support on, given the threat that it poses to our country and the world. myself and another were down in columbia -- colombia, and we are very happy with all of the success that you are having their in the intelligence community good evening or on drugs and international crime. mr. mueller? we have task forces, and we are

coming together with state and local law enforcement and task forces, and even with the threats of the future, including cyber, it will be not with our relationships with others but also with state and local law enforcement and building up their capacity to address that threat as well as ourselves. >> i also mention the 72 state and major metropolitan centers for which the national intelligence program provide some funding to ensure, which is the nexus, for providing information upward from the local level to the national community and downward. another instrumentality, a network that has grown since 9/11. >> thank you, to the panel, and, mr. chairman, i yield back. >> thank you.

ms. bachmann and. >> thank you. i know that my constituents are very grateful for all that you do. i just wanted to know to that it was one year ago when we have all gathered here for a public hearing, and at that time, we all had our televisions on. literally, history in the making with the arab spring, and we saw the events and demonstrations occurring in cairo, even as you all were speaking, and i am just struck by the fact of what has occurred just in the last year. my questions are in regard to egypt, in particular, the events we saw on television, and since then, we have seen an attack on the israeli embassy in egypt. we have also seen calls for the breaking of the 30-year peace treaty and has been enjoyed by egypt and israel, and in egypt,

75% of the power is now controlled by either the muslim brotherhood or elements of a group hostile to the united states, and both groups are hostile to the west, talking about implementing sri lankan. you had said to the committee one year ago that the muslim brotherhood was a secular organization. i am just wondering, in light of some of those events in the last year, do you still stand by that comment that they are a secular organization? >> i did not make myself clear in that comment, obviously, with sound bites, and in a subsequent appearance, i tried to clarify that. what i was trying to referred to, to that point, behavior within the political system to participate in elections and this sort of thing. the muslim brotherhood in egypt

is not run by religious scholar. it is mostly middle-class people, but to your point, it is whether this is going to be for clothing. in wolf's there are other groups, as a result of the upheavals in egypt. this is something we have to watch very carefully as to what their real objectives are. there have been calls for the review of the treaty with israel, and not surprisingly, israel is very concerned about that. i was not as precise when i made that statement one year ago about the muslim brotherhood as i should have been. >> and thank you for your

response, and i have another question about egypt, as well. since mubarak was overrun, the sinai has become a transport for people and materiel. there was the repeating bombing of the israel-egypt pipeline. just two notable examples that we have observed. there was the hon moss controlled gaza. currently, we have two battalions, i believe, there in the sinai area to ensure the implementation of the egypt- israel peace treaty. would you in your estimation say that our u.s. forces are at risk, and have their rules of engagement change, -- changed? is this another terror haven that will continue to destabilize the peace between israel and egypt?

and if so, how, and if not, why not? >> mike dunn on last director betrays knows this, it is probably best to consult with the department of defense on your question on the battalion that is there and whether or not the rules of engagement have changed. i do not warm the answer to that, so we will get back. -- that. >> congresswoman, i think it is important to note that in all of our interaction with our egyptian counterparts that the egyptian government very much shares the concern over the emergence of the challenges in the sinai, some extremists have flocked there, that it has been used as a transit point for weaponry and so forth. and, indeed, our sense is that we truly do take this very seriously, and we can talk more about this perhaps in a closed

session. with respect to the multinational force, it is my old area when i was a central commander. unless there has been a change, there is one there in the southern part of the sinai, which is actually further away from this area we are talking about, and there is another battalion from international country that is in the north. i again would refer to the department of defense on the rules of engagement, although i cannot imagine why there would be a change needed to them. they are given every opportunity for protection, self protection, so, again, i would be surprised if there was a change. >> thank you. thank you, mr. chairman. >> thank you, mr. chairman. i would like to go back and visit our southern hemisphere that was brought up. obviously, we almost had a failed state in colombia and a

few years ago. united states stepped in and turned that around, and i think everyone here would say that is a success story. colombia is coming back. a trade agreement which i think is mutually beneficial, but, obviously, we have significant problems in our sub hemisphere, ecuador, bolivia, central america, and many cases by a basket case, and guatemala i think has the highest crime rate in the world. when i was there, i managed to make that list, and, of is the, mexico. 50,000 people have been killed in mexico in the past three years. we recently had a discussion. as horrible as the number of deaths in afghanistan and iraq, i suspect they may be higher in mexico, right on our border with the united states.

coming across our border, are seven states, especially states like arizona and texas. we still up problems in california, and i would like to hear, what is our focus in south america? obviously, we have significant problems in central america, but we have got significant problems right on our border, and these are our friends. by golly, we need to make sure we can help them out and help ourselves at the same time. i just wanted to mention an update for you bipartisan caucus. this method anthony it coming across the border -- this methamphetamine coming across the border is the worst we've ever seen. much of it comes from mexico. the precursors are coming from china, india, or else, but they are mixing this stuff up, and the amount of money being made is obviously very corrupting to

the folks in mexico and in the united states. we have seen significant problems, so i want to hear all of your comments about what we can do in south america to focus on that problem that we have, which i think is a huge national security issue. >> ok, let me start and then as director mueller and another -- that the ask them. these are concerns we have as american citizens about the issues that confront us in this hemisphere, and obviously, we have been focused on other things, with two wars and all of that sort of thing, and. problems right here in our own backyard. you mentioned colombia. that has been a marked success story, with a partnership that we have forged with the colombian government.

we are extrapolating lessons learned from that and other places, notably mexico. it also shows that this is saying long slog. what concerns me is the network's that exists in central america as a highway, if you will, for drugs flowing northward, and we, even as we drawdown, are trying to bring more resources to bear, which we can talk to perhaps in a closed session about what the u.s. can do for our partner nations, and i think director petraeus as can share in more detail in a closed

session what we are attempting to do. >> congressman, not only the numbers of homicides in mexico for mexico but also for the possibility of the spreading of the violence north of the border. our focus is in a number of directions. first of all, a spate of kidnappings. we have a number of kidnapping task forces that are agents on the border work with mexican counterparts. secondly, the corruption is a huge issue south of the border but also north of the border. we had 14 border collection task forces that are addressing that particular area. the third area is making sure that the intelligence that we gather or the d.a. gathers or ice gathers or other law enforcement or intelligence agencies of the united states is matched up with that

intelligence that is gotten below the border by the mexican authorities, by the u.s. authorities, and consequently, there is a concerted effort to make sure that there is substantial information sharing along the border. the last point i would make, as has been pointed out, cartels from mexico have reached into the united states. i have seen be lucrative markets, quite obviously, not just to remove the drugs over the borders but to have control and pockets of cartel personnel inside the united states, and to the extent that that is happening, we have enterprise investigations that are analyzing that movement of the cartel was within the united states, understanding that there is the customs, border patrol, and d.a.. >> and, congressman, if i could,

for small, with respect to colombia, we really have to give credit to some very courageous colombian leaders over the years and have implemented a very difficult strategy. certainly, we provided considerable assistance, but it was their belief in their military that implemented the strategy that was developed. with respect to mexico, as i think i mentioned earlier, there is actually a delegation today, quite high ranking. i will meet with them this afternoon after the the back to the headquarters, how we can further our work together, noting steps that mexican leaders have taken for a comprehensive approach under their leadership and what is needed to implement it. but, again, that is going to take a lot of hard work ultimately to develop the forces, and judicial structures, corrections facilities, and all

of the rest to be able to implement what is needed there. >> thank you. i just wanted to point out that there is a war going on in mexico. more people have been lost in mexico in recent years that lost in the vietnam war, and it is right across the border, so i appreciate your attention to that problem. >> blankey. -- thank you. as relates to our intelligence abilities, i will start with the reconciliation process and just some things that i think we need to understand. the network, how would you describe it? give me two sentences. >> well, the hikani network as a

relief organization and have been behind many important that ahmadiyya attempted attack on the base, for example, in one province just south of kabul. they were implicated in a tax at a number of our bases and, of course, with the embassy attack effort, as well. >> they have expressed desire to expand, have they not? >> that is correct. they have expressed a desire to be a bit more transnational. i cannot say that we have seen examples of that.

they are still pretty focused on trying to regain influence over the provinces over which they had historic control during the taliban. >> so you would say there is escalation? >> yes, absolutely. >> and the taliban has expressed a desire to go beyond their theatre of operations. that seems to be an aspiration as well. is that correct? >> yes, that is correct. >> the taliban continues to have a relationship today, logistics, recruiting, sharing basis, sharing training, that sort of thing. is that correct? >> yes. as was discussed before, there is really a syndicate of extremist elements located in the sanctuary areas, particularly in waziristan. you will find some afghan taliban, pakistan taliban, al qaeda elements, islamic elements, among others.

>> there is a strong relationship in one area. >> the overarching taliban structure certainly doesn't come as a number of those but not all. and, again, al qaeda would not necessarily be viewed as part of that. the hikani network calls themselves part of that, but they do not always respond to direction. >> political assassination to further their gains, do they not? >> yes, absolutely. >> i just want to cover a few of these quickly. >> as to other groups. but again, the hikani network and what is up in is pakistan. all of these organizations. >> and they are very lethal. they have been successful to some degree in their attacks. >> they have. >> i just went to cover a few

more things to bring them into line. going into the fall, the taliban, they were successful in assassinating the chairman of the afghan high peace council. late last year, the district governor of one province was successfully assassinated. a member of the afghan parliament and former chief of the police in some provinces, that was a successful attack and assassination. the police chief in one area, that one failed, was not successful, but there were some deaths and casualties since mid with it. going into this year, the district governor in one province was assassinated by the taliban. the prominent anti-taliban

tribal leader in one area was successfully as fascinated by the taliban. the u.n. reports that 462 civilians were assassinated by the taliban in 2012 -- excuse me, 2010 alone. and so, you would argue by these numbers that the taliban has not abandoned its practice of political assassination as a form of intimidation in afghanistan. is that correct? >> yes. >> so one of the things we see in reports coming out of afghanistan, the one thing that the taliban has been telling afghans is that we are coming back. united states is leading. we are coming back. we had some great c.i.a. analysts walk us through that not so long ago. so that is a disturbing trend. >> it is. >> so you can see where someone who looks all this information

may scratch our heads, and wonder, given the fact that after negotiations started, they were committing acts of political assassination to undermine all of the work, all the sacrifice of the united states military and intelligence forces on the ground, why some of us might get a little bit cranky about what we are doing when we talk about reconciliation and the fact that, and you can clarify on this, but we have already stated in the senate hearing that the individuals who were discussed as a possible transfer in what they call a confidence building, i guess what the vote or at the peace negotiations, they were all deemed too dangerous to release. we have established that. is that correct could buy report. my understanding is that it was an agency report. >> well, most recently, the agency was asked to assess these five individuals, their significance, and the risks that

could be incurred by their release not to the afghanistan- pakistan area, but to a third country, with eight burying degree of mitigating measures, and obviously, the risk is higher. that is when you have fewer mitigating measures, and higher if you have more. that is what the agency provided. at one point, there was a report that said they are too dangerous to release. that is, i think, a couple of years ago. i think director clappe r -- >> i do not think that was the exact language used, but in essence, that was the recommendation, that they be detained at guantanamo.

i have to say, i understand your concern with all of this, but whether or not we negotiate an within we negotiate and the terms of negotiation is not an intelligence minute to call. it is a policy issue. >> i understand that, director, but the information that i hope that they are having access to, and i would assume they have access to the same information we are, is that correct? >> yes. >> i want to make sure we'll understand what information we see and what information they seek, and what i think from a policy perspective, which is why at the end of the day we are engaged in this debate, it is important to have a discussion. i believe if this happens, we have crossed a red line that we will never be able to get back. it is a serious doctrinal change for the united states government. as a member of this committee,

the information we collect tracks very well as to why this is a bad idea. i just want to make sure that they are seeing what we are seeing so that we can come to conclusion together, and what i think there was so much bipartisan opposition to this during the consultation with congress. i am just trying to establish basically what we are all looking at the we can all determined by a policy perspective if this is a good or not good idea for the national security of the united states. i understand your aversion to a policy debate, but unfortunately, you fuel the information that policy-makers are going to use to make this decision. >> i just want to understand and make clear that the intelligence community has been a part of these deliberations enter agency, and, of course, i do not think anyone has any allusions,

certainly not in the demonstration, and there has not been a final decision made on this, whether this will pan out or not, but it seems from the administration point of view worth it. >> i understand, but i will take exception to one comment, director, and i am not being critical, but there have been operational things that have been conducted up to this point, so this is not an inspiration policy change. this is something that is well underway and has been something that is at least a suggestion that has been passed along to the very people we would like to negotiate with. that is very different than we have not really made any decisions or done anything yet. i will take exception on that one point. again, i just think this is the serious that we get this piece right, and we went to pull the quote just to make sure we had it right, it was said by the

secretary, the mid part of 2013, we will be able to make a transition from a combat role to a training-advisory role. i cannot find anyone here who believes that is the timeline that we are on, both from the armed services committee and certainly the intelligence committee. that was never our understanding, so that is, in fact, a change, because if you are going to make it by mid 2013, you have to start that earlier. so i guess what i am confused by all of this is that the rhetoric by which we are pursuing this does not match the intelligence of which we are receiving. we have just clarified that they are, in fact, still losing political assassination. -- still using political assassination. the taliban is, in fact, -- they

know what their timeline is when they have to survive. we have seen reports of the factions to the taliban, and it is all about intimidation and. that is now they are. are you familiar with -- i am going to stay 2006, but it may have been 2007, the pakistan effort for a peace the decision was some of the tribes. are you familiar with that? i call it a peace accord. it was not really an accord, but are you familiar with that? >> well, if you are talking about with one group, that is correct, and that was limited to one valley in what used to be known as the north west frontier province, and obviously, they broke that in short order, and that is why the pakistan army subsequently went in and cleared that valley in the northwest frontier, something they

continue to do today, and they lost a lot of soldiers and that. >> what is important is that negotiation gave them breathing space to regroup and retrain. we have seen that, and we have seen that with the taliban over and over and over again. we are frustrated in a sense that we had some very classified, sensitive breed things along the way, -- sensitive briefings along the way, and i congratulate the demonstration for that. an opportunity to advise and consult. you can imagine how frustrated we are when we find out it was a little bit further along than that, and certainly, a press conference on january 22 basically alluding to this peace process that i think is very, very dangerous to our national

security interests, and i just thought it was important that we get this on the record to know that negotiating to -- with people who are using this level of violence is very concerning, given that they have not even slowed down their political assassinations during the course of those very negotiations, very, very disturbing. again, i hope that the packages of intelligence that we see are at least in the hands of the -- and i hope they will listen to the advice and the bipartisan members of the committee to turn this around before, i argue, it is too late. director, i have heard several times and i think it is so important. the operations that the forces tried to conduct in the united states to politically assassinate a state sponsor of terrorism, the saudi ambassador here, and with this regard, by

the way, for u.s. civilian casualties was buffoonish and amateurish. i want to cover a cute? that it think is important. the criminal debate approach in mexico, we have passed a criminal vetting of being a pretty good bad guy of being able to conduct operations across the border into the united states? >> it is hard to definitively say. you'd have to contact dollars at least had the ability. >> the way that they transferred money was a bit ridiculous. can you talk about that? because the fbi was early engaged in this operation, which was by a stroke of luck, was it not? >> the source had been handled

by the dea and was brought initially to our attention. >> you can imagine the surprise when an iranian operative shows up and says, "i have a deal for you." that is not the type of information they would normally take. >> we take whatever information we can whether it be dea or fbi. they understood the importance and we immediately followed up so that the money was provided for the plot to go ahead. >> we were fortunate that the dea have got into the sky on another matter, showed up, and the dea was on the ball and turned over to the fbi quickly. >> yes. i may add, if i could come back before the discussion was had on this particular issue, this was

a viable plot. it is also representative of the willingness to utilize proxy's or others to carry out attacks which, as director petraeus pointed out, was the modus operandi of of iran. >> does this get your point during the senate testimony that the iranians have made a calculation that they could possibly pull off an attack in the united states and may have some capability to do so? >> obviously they think they do. that is something that we need to be vigilant about given the aggressiveness and incredible bulbous -- boldness of such an audacious plot.

we have to be vigilant for more. >> that is not the only actions we have seen globally. they have done something similar, have they not? >> there have been other instances about reached through proxies', an attempt to plot, one in thailand as a case in point. >> one of the things that we saw in reporting is i ran's strategic shift to iraq. they believe with the drawdown that there's an opportunity pour them in iraq. can you talk about that a little bit? >> i will start. yes, they do. they see our departure from iraq as a favorable conditions for them and they certainly want

to try to exert influence to the extent that they can. i'm not sure that the environment there is entirely conducive to that. i'm sure they are not as welcome as they might think, but they are interested. >> they have tried to do this all along. there's no question that they have exercised a degree of influence at varying times since the end of the saddam hussein's regime. the fact is though that the iraqi leaders have no desire to become, if you will, the 51st state of iran. they do want our relationship, and they have to have one. it will always be to the east of them so they will be larger, considerable resources of their own and they remember they fought a bloody war with each other. one is persians, the other

arabic. although the predominant religion is the same, they are conscious of the differences and the iraqis are quite nationalist in their approach. while they will take assistance, while they want the religious terrorism and they want their electricity, diesel, and other necessities, at this stage in the iraqi developments they do not want to be a satellite of iran. >> that have been very engaged not only in killing u.s. soldiers threw their proxy. >> no question about it. >> they have been very engaged in fuelling the sectarian violence that we see in iraq today. they have supported groups, without question, over the years. they still continue to support them now. these are groups that have caused significant security problems and have sought to

intrude in various ways in the political and economic realm as well. it you see their expanded role in nation state terrorism, they are supporting al assaad, come i think they would throw him over they thought they could get a pro-iranian regime. there is no love lost there. southern lebanon is a destabilizing force and now they feel they can conduct an actual attack of the united states, brazenly moving their operations. what is the sense that they believe that when we say "all options are on the table, "that they honestly believe it? you can see where the narrative from their perspective may be different and i think that drives -- that jives. a through their eyes, they are making progress.

he is welcome to talk about that, but if you were looking at this from the iranian perspective, it looks like things are going their way. how did he get them to understand that we are deadly serious about all options being on the table. >> and there are the initial threats to close the strait of hormuz. we made it clear that it was not acceptable. they kind of temper their rhetoric and also, by their behavior, on when the transit is indicative of that. yes, there is rhetoric and their assertiveness. i do think that they have respect for what our potential capabilities are here. as well, the sanctions,

obviously led by the united states, are having an effect. they are having an impact on the economy as never before. do they take us seriously? again, this gets back to what extent the leader of this country, or any other, is it seen in reality. >> i understand. it seems to me to be a little disjointed which is something i think we need to work out from the policy standpoint. if we do not focus together on this problem, and it should not take congress acting on both of those sanctions bills to get the executive branch to impose sanctions, which i do believe will be crippling. but you also need the layover. they have to believe we are serious when we say, "all

options are on the table." i'm not sure we're there yet. >> chairman, if i could make a comment? i think it is really important that people understand that because there has been some is characterization in the press, this is an organization that looks at post-2014 afghanistan, not looking at the recent years or so. it notes the state of the insurgency did lose ground but it remains consistent. we did a word search for "stalemate," and it is not there either. it postulates different levels of support post-2014 and assesses but the situation will be like under those different assumptions. not surprisingly, if you put

more in coming probably get more out. it is very important though, because that we have suggested, it does not characterize directly in all corridors. >> i understand that. i read it again last night just to make sure. some of this we can cover in the closed session, but there are things to be concerned about. >> there is plenty to be concerned about in afghanistan. without getting into details, this will also lend credence to the less than rosy predictions in the n.i.e. how was that? we will talk about that in closed session. >> mr. chairman, thank you for

having these hearings. as you know, we have to deal in a classified wait for the benefit of our country and national security. it's very important for us to communicate as much as we can within the intelligence communities of people understand what we do and we're there to protect the country. this issue has been good and there are a lot of issues and topics. i think i am the last person to ask questions, but first i want to focus on the cyber threat. those of us to of been on this committee for a while, we have asked what keeps you up at night. if you look at the two threat, i want to hear your point of view. there's the issue of weapons of mass destruction, radical groups out there that have the capability to kill people come and the other is cyber. what concerns me with the issue of cyber is that the average

person in our country is not really aware of the cyber threat out there. we know that our media writes about a lot of issues, especially about the republican primary lately, but the issues that are out there, when we have a cyber intrusion, a tactic, but everyone to call it, it's not even a front-page story when the nasdaq is attacked and other areas that really could create a severe benefit for them. we know it has happened in the pentagon. we know our business sector. this indicated that china and russia route are responsible for illicit intrusions into u.s. networks and the theft of u.s. intellectual property. wikileaks had a measurable effect on foreign diplomacy. we need to be very concerned as

a country. i think it is important that we start talking about what the impact of these cyber attacks are. we need to get the language right. they are almost considered a war. sometimes because every intrusion an attack. on a regular basis, thousands and thousands from different countries. my concern is the radical extremist group paying a brilliant hacker to go in and take down a major banking system. north korea adjusted for a couple of days in south korea. what i would hear -- but i would like to hear from you director mueller, is what your concerns are as far as a catastrophic attack. i know you and i have had discussions, but i think the public needs to know about how serious this is. we have secrets that are being taken. there are a lot of issues out

there, but how bad is it for the national security of our citizens? >> let me preface my remarks by saying that i do believe the cyber threat will equal or surpass the threat to counterterrorism in the foreseeable future. the evidence -- the efforts we put on counterterrorism, the same has to be undertaken with regards to the cyber threat. quite honestly, there are a number of targets or ways of looking at this, on one hand, taking down the electrical grid, the ability to bring energy or other materials through pipelines and the like all dependent upon this. >> air traffic control. >> the financial system. there is a very little we do that is not on or somehow associated with the internet. the theft of intellectual

property, r&d, plans, programs of a corporation, all of which are vulnerable to being exploited by attackers. on the one hand, you need to defend the infrastructure. on the other hand, you have to identify the attribution which is as critical as anything else. what is somewhat unique in this venue is that you do not know whether the attack on nasdaq, google, sony, is undertaken by a russian or a chinese state actor or an organized criminal groups that could be a terrorist group, organized crime. they may be associated with an intelligence service or a country. rick could just be a group looking at it for profit. it could just be a high school student that goes down the street who has the hacking capabilities that has backed

into a financial institution and can bring it to its knees. for us inmunity, you do not know the attribution or do you know the program. is it a program in which a undertake the investigation? is it a national security event? is it a criminal event that requires us to come together and develop mechanisms, much like we did with the terrorism renown to share information? we have a national cyber task force we put together with 20 separate agencies so that when there is a substantial intrusion that we are all sitting at the table able to bring our resources together to identify it. in addition to the breaking down of the stove pipes, the sharing of information is as important if not more so than what we saw in the wake of 9/11. the break down the stovepipes to allow the sharing of information

between the government and private sector and it is tremendously important. alas plug would put in for legislation is a data brief reporting requirement the requires those institutions that have been hacked into, have been intruded, they are mandated to report it. if they are not reported, we cannot prevent the next event from happening. 47 states have different reporting mechanisms and there needs to be one mechanism that requires the reporting structure. >> that was a pretty strong statement to say they you feel cyber attacks can be more serious to our national security and counterterrorism. by the way, i happen to agree. does anyone else on the panel have an opinion as to the threat and its severity? >> we all recognize that this is a profound threat to this country. it threatens its future, its

economy, and it's very being. i have to of knowledge the other components of the government, the dod, doj, homeland security , and they are all recognizing this and committing to do our best to defend the country. >> general? >> the same. very serious. >> identify myself with the previous remarks. [laughter] >> our role in this committee is oversight. it is important that we move forward quickly, i believe. i will talk a little bit about our bill and how we got to where we got, and where we need to go. we have worked very hard for over one year to try to find a bill that would very quickly move best way level where we

could start protecting our country. whenever we pass legislation in congress, sometimes there are unintended consequences. what we tried to do in this bill is to make it very small, 11 pages, and it is a very important issue, like i said before in my statement, that members on my side of the aisle, congressman thompson, congresswoman tchaikovsky, we have all worked very closely and feel strongly about the issue of civil liberties. we feel like we have worked through and past a bill with these issues, but in this business, sometimes you do not deal with facts about perception. you have to be very careful when you're trying to protect your country that you do not deal with this issue. that is why this is an 11-page bill that we still strongly needs to move forward.

i know there is some push back and i want to read a statement i have about the possibility that a military arm of the government, assuming the nsa, will come to be the gatekeeper of of information. there are concerns about privacy. the comment was made by another member on another committee of looking at this issue and we purposely left that open for the administration because we understand the sensitivity. i'm understand, but we have to understand the perception in which what is out there. this is what we have to do. i want to rescue this. we have to move quickly. there are a lot of bills out there on cyber security and there are a few people who have worked on this for years, but this attack could now be eminence. director mueller, this attack could be one month from now and

we do not have the tools. you talked about the pilot program that our bill is based upon, the program that worked. then we need to deal with the issues of civil liberties. do you feel that we need to very quickly move forward with a small bill that gives you the authorities to protect this country? do you feel it threat could happen tomorrow or one month from now? >> the attacks are happening daily. some of them are larger than others. particularly when they start coming on infrastructure, whether it be financial, an electrical grid, what ever, on they could well be devastating. a great deal has been done in terms of breaking down the walls between the various agencies. in working closely with the nsa that we work now with the cia and the like to address

catastrophic attacks, should one happen. our effort, and the same way we try to prevent the attacks, in it counterterrorism or the terrorism marina, our goal is to prevent them. where we really need the help are in resources, support, legislation in the two areas i spoke about, sharing intelligence and data briefing. it would give us the ability, not just to investigate after the fact, on but also to prevent the attacks before they can have a devastating impact that we anticipate. >> this is an open hearing. we have always been concerned about homegrown terrorists. when we were successful in bringing out a lot keep from

yemen -- al awlaki from yemen, home grown bombs, became a long way and it's a difficult issue to find them. can you very quickly talk about where we are and what happened as a result of his death? are we still under a great concern that yemen is training people to come into the united states? >> removing bin laden and al- awlaki contributed greatly to safety around the world. other agencies contributed to the city of the american public. what we have seen is an increase in loan wolf activity. principally because you have the

internet that can be utilized for radicalizing, instruction, training, organization, and the like. with the growth of the internet, the growth of the ability of a loan actor to wonder take a tax has grown substantially. if you look at the work we have done on the plots that we have thwarted, in almost every one of them, the internet has played a role. we can anticipate that happening, not just internationally, but the ideologies of al qaeda, domestic terrorists who want to kill people for other reasons. it's not to say that the threat has been removed in yemen because it is not. yemen is currently a hub of individuals who wanted to undertake terrorist attacks. it is up there with pakistan, afghanistan, and somalia. >> thank you. no further questions.

>> thank you for your time. i want to commend general burgess for avoiding it has fired two years in a row. good job, sir. we will get you in closed session. >> there are three generals and one director. do you feel insecure? >> it takes three generals. >> congratulations, general clapper, for joining the marine corps. we will have an abbreviated closed session to keep you all on schedule and we will offer you some refreshments on the way down to you can take a minute. we will reconvene within a few minutes. 12:30 p.m. in the closed spaces for an abbreviated closed session. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

>> president obama will unveil his fiscal year 2013 budget tamara in a speech at northern

virginia community college in an and dale. tomorrow at 11:00 a.m.. -- in annandale. will also get everything on the defense budget and how the pentagon plans to cut $480 billion. it will be followed by the release of the budget of the army, navy, and airports. by tomorrow on c-span. -- army, navy, and airports. >> should your president had the highest moral and ethical standards and be an example to our children and young people in this country? ask yourself that question, please. should his life may consult a role model for future children? should anyone you elected to this office always keep his promises? >> as the candidates' campaign, we in the back on 14 men who ran for the opposite and loss. c-span.org/thecontenders