development of an intelligence capacity, breaking down of the walls between ourselves and cia, nsa, and the intelligence community, but i think always in the back of our mind, everyone at the bureau knew we could not let this happen again. on that day, i felt like that high school student who got the wrong assignment when the president asked that question, but it has been in the back of my mind since then. each president, for most on their mind is protecting the american public from another attack. >> we have a number of questions that deal with mission areas you did not mention specifically, given the importance of cyber security and espionage and counterterrorism. i wonder if you could say a little bit about two things, one being your sense of where the country is in respect to drug policy. the fbi is involved with drug policy along with other law- enforcement agencies, but more generally, how you approach the

challenge of managing this broad range of responsibilities that the fbi has to continue to attend to, while at the same time prioritizing the missions you mentioned. >> actually, it is the last word that you use, which is prioritization. we early on realized that we needed a set of priorities and needed to focus on those priorities. the priorities we talked about today -- terrorism, counter- terrorism, counterespionage, and cyber -- are the three national security priorities. if the fbi did not address the priorities, they often would not be addressed. transnational, international organized crime because organized crime cuts across various jurisdictions and became the third criminal priority. white collar crime.

that is number four. five was violent crime. you will see left off that list are a number of things, including the drug cases we have traditionally done previously. but when we say priority, we meant priority. you have to address priorities in order. i moved almost 2000 agents from the criminal programs to counter terrorism and national security because that was the priority. we have, since september 11, then run according to a set of priorities that we continuously review, but precludes us from doing things we have traditionally done, we all enjoyed doing, but is not as necessary as the priorities we have identifd, and we were fairly rigorous when it comes to budget, when it comes to personnel. we adhere to those priorities. in a tighter budget, those are the things that save you because you go down the priorities and are able to make the decisions somewhat better than you otherwise would. we are not doing as much in the

war on drugs that we did before. it is a continuous battle. we do participate in a number of ways as a war and a battle worth fighting. >> we have a number of questions about cyber security. question that emerges in the minds of many people is how the fbi might approach the challenge of balancing the security- related imperatives it has with concerns about privacy and civil liberty. wonder if you could speak to that in the cyber context, but also may be what you think americans should be thinking about as they ask the question of what their government should be prepared to do in terms of offensive operations in cyberspace. >> let me first of all define the fbi's role. generally, we do investigate. our primary function is when we are called in, we investigate. we have a debt investigators who have been doing this for time here the problem with a cyber

intrusion attack is you have no idea whether it is another government-sponsored attack or an organized criminal attack originated in russia or romania or wherever by an organized crime group for the high-school student down the block in his room undertaking the cyber attack. consequently, the way we divide up our work -- espionage or terrorism or fraud -- does not really help us when you have an attrition, particularly if it is intrusion by a foreign government, which falls under the purview of foreign intelligence agencies. what we have found is we have had to adjust our organizational structure to develop the relationships, and i put together a task force when there is a cyber intrusion, that includes individuals from across the community because you do not know where that case will end up and you want to make certain you

do not miss anything. whether it be offensive or defensive, we are generally defensive in the sense that operating domestically and the investigative authority within the united states. we would be helpless if we did not work with dhs, cia, nsa, and the rest of the intelligence community. if there is one substantial change that has made the biggest difference, i would say breaking down the traditional walls between the intelligence community and the domestic law enforcement community because information flows very easily over borders now, and you cannot just see one piece of the puzzle without getting the other piece. it has made a tremendous difference and given rise to the approach from all of us that says we want to work together in a task force context. >> for our radio listeners, you are listening to the commonwealth club of california radio program. our guest today is fbi director robert muller discussing security threats concerning the united states.

we would like to ask you a little bit about the national security implications of our energy policy, an issue of much concern in the news and certainly here in silicon valley. what might you say about the relationship between energy policy and some of the national security challenges that the fbi is addressing? >> one of the nice things about my job is i generally stay away from policy, but when it comes to energy resources and the like, there are a number of -- you can look at it from the geopolitical perspective, which is not something that really bears on what we do day in and day out. if you put in context the potential cyber attacks and the concerns we have about cyber attacks on our infrastructure, there is an intersection between the vulnerabilities we have and our energy and electrical grids and the like from cyber attacks, which keep all of us busy. i would just go back to one other thing that i did not address in the question before,

and that is the balance between privacy interests, civil rights interests, and the like, and the necessity to address these threats. every day, there is a balance between what we need to undertake to do our job and to prevent the results of a substantial terrorist attack, but every one of us understand it is a balance. particularly the bureau over the years has understood that in conducting investigations, you need revocation. you need start, and you build up a vacation before you take the next investigative step that may further intrude on one's privacy and the like. i will tell you that our agents are inculcated with the understanding that they are given a great deal power, a great deal of ability to affect persons lives. understanding the necessity of operating within the constitution, within the applicable statutes of the attorney general guidelines is

drilled into all of our new agents. as i indicated before, my predecessor set up a process whereby every one of our agents goes to the holocaust museum to make certain that they understand they understand what happens when a law enforcement or intelligence agency gets off the tracks. >> you addressed one of my upcoming questions, but there was a variation on it that i thought would be interesting to share with you. it says, cassette and what recourse do ordinary citizens have to hold government officials accountable?" internally, we have our own inspection divisions that monitor what we do and take complaints outside and inside and review it, and we have a privacy officer. i will tell you that congress is not shy in exercising its oversight of the fbi and other federal agencies. it is not as if we are not scrutinized, and persons who have complaints -- there are a number of opportunities, a

number of offices that will handle those, whether it be inside the fbi come inside the department of justice, the inspector general's office, or the hill -- inside the fbi, inside the department of justice, the inspector general's office, or the hill. >> if i had a dollar for each question that mentions the word occupy, i would be a rich man. i appreciate the time people have put into these questions. i know we are short on time, so i will combine them when i can. some of the questions are about occupy san francisco, how police should deal with in canada. i'm guessing you will stay away without one. >> one thing you learn after 10 years is how to duck a question. i think you have got a very good police force here. very competent person a hand --

at hand, and they do a very good job. >> i will follow up by asking you the more general question. the protests, of course, have been going on in several cities and have garnered a great deal of attention from any number of sources. i guess the general question would be -- what is your impression of what is happening, the challenges that might be represented there, not only for law enforcement, but for the country? >> i'm not going to wait too deep in these waters, but it presents very difficult issues. on the one hand, expressing first amendment rights. on the other hand, the right for ordinary citizens to have the ability to access the venues in their city. it has worked out, reading as you do from the newspapers, worked out somewhat differently, depending on the city and the circumstances. >> now, for something much easier, let's talk about pakistan. [laughter] >> that is a law professor

thinking that is easier. go ahead. >> a number of our questioners note that it seems to be public record that there have been some challenges in the relationship between our government and pakistan and, yet, pakistan continues to be an important strategic partner, and allied in a very complicated region. i would love to hear you speak a little bit about how you see that relationship with respect to our law enforcement activities and what you think we might expect in that relationship going forward. >> it is interesting. in today's world of globalization -- when i started as a united states attorney back in the late 1970's, i probably had one case that had some ramifications outside of this district. now, i would say it is probably the reverse. nine out of 10 cases intersect with persons in other jurisdictions, whether it be within the united states or

internationally. what happens is, regardless of whether it is pakistan or a number of countries you could mention where we have diverging interests, there are also interests that pull us together. in pakistan, we have got good relationships at a number of levels. it is a much more difficult relationship that perhaps the highest levels, but we still have good relationships with certain counterparts over there, as we do with a number of countries. i cannot praise and of the work that has been done by our sister agencies in addressing the threat of terrorism worldwide. we are safer today as a country because of efforts that have been undertaken by those entities, whether it be in pakistan, afghanistan, and other areas around the world. >> there has been a lot of attention both inside and outside government involving -- with respect to the issue of what might be done about the

motivations of people who engage in terrorist activity or are recruited by terrorist organizations. i wonder if you could speak a little bit as to whether you see efforts to do something about this to be promising in terms of outreach or better relations with particular communities -- what questions you think are important for us to answer to be able to better get a handle on what motivations people have for engaging in terrorist action. >> i would say that the landscape has shifted over the last four or five years. four or five years ago, our greatest concern would be radicalization from individuals in pakistan or yemen and other individuals or acolytes in the united states who would reach out and touch somebody and recruit them to go to human -- yen in -- yemen or pakistan.

what has happened is the self- radicalization over the internet. today, individuals do not have to travel to pakistan to understand the literature, be exposed to the literature, and to gain some of the information and knowledge on how you undertake a tax. it can be all done on the internet. increasingly, we see those individuals are radicalize, self-radicalized as being a huge problem for us. in the united states, there are a variety of ways that people become radicalized. particularly after september 11, for the four or five years after that. it really is, to a large extent, the muslim american community itself, if you are talking about international terrorism, who has alerted us to persons who we need to look further at

and has understood that the worst thing that could happen to the muslim american community in the united states is another terrorist attack. yes, we have our reach. every one of our field officers has substantial out reach with and has since september 11 with the muslim communities. but in addition to the relationships that we establish, the education that we do jointly, it is in large part attributable to the muslim community itself that local radicalization is somewhat diminished and, really, it is on the internet where we face our biggest challenge now. >> director, several government officials have raised questions about the relationship between contractors and the federal government, and this is an issue that indicates perhaps not only the department of defense, the state department, and many other government agencies, but also to some degree, our law enforcement agencies. what is your take on -- what

would be the philosophy of the fbi when it comes to the use of contractors? >> there are certain roles a contractor needs to play. it may be an area of expertise we need. on the one hand, you need contractors in discrete areas. on the other hand, you do not want to over use them because they are far more expensive, bottom line. one of the problems for a time in the bureau was without fbi agents could do anything. does not make any difference whether you are human-resources or information technology agents, they can do all it, but the fact of it is, if you have to put it in a new computer system, you may need someone who is a specialist on it. you may want them for that particular project but not for a number of years. in topeka areas, there is a role for them. they can be of use and can be overused. all of us who are facing now the

budget crunch are looking very closely at the use of contractors and making certain that you use them when you really need them as opposed to it being the easier way to go. >> you mentioned earlier the relationship between the fbi and congress, a very important relationship. i wanted to ask you about the relationship between the justice department and the white house, but in very general terms, so let me preface by saying that there has been attention to some of the drama surrounding conflict between the former deputy attorney general and other senior justice department officials in the bush white house, involving an nsa program from the previous administration. i would note that the fbi is in a very interesting position in our government. it is undoubtedly an executive agency in article two of the constitution. on the other hand, it is designed to be somewhat insulated from day-to-day interference from people engaged in the political affairs of the

nation. how would you describe the relationship or what you would say is the ideal relationship between the president and an agency like the fbi? >> it is an interesting question. i would say that one of the great things about my job is i have to be aggressively apolitical, which is wonderful. as an agency, we need to trust the american people in the work that we do an understanding that whatever we do in terms of investigations, whatever we do as the bureau is done without regard to party or politics or what have you, that we are independent. it was somewhat easier prior to september 11 where you had a criminal cases on the one hand and national security was something that was handled elsewhere by the cia, duty, and state department -- the cia, dod, and state department here there was very little interaction with the white house prior to september 11.

back to the matters the president is responsible for the safety of persons within the united states and has a right to know what is being done to prevent terrorist attacks. so for the first four or five years, i would brief president bush just about every day, all in discrete areas relating to national security. and the impact of cases now the not only impact national security but impact relationships with countries. as an example, we recently arrested an individual, an iranian-american, who had, according to the indictment, plotted to utilize an individual association with the mexican keitel to assassinate the saudi ambassador in washington, d.c. that quite obviously implicates somewhat more than a criminal case. consequently, the impact on international relations -- it is

implicated in terms of what we do, and consequently, there is an exchange and understanding of what is going to happen, although the justice department and ourselves will do what we believe is best, regardless of that. nonetheless, there has to be a dialogue on the implications and impact of a case such as that. the relationship has evolved -- evolved over time. it goes without saying that the president and others should not, have not interfered with investigations that have to be handled independently. so that stricture is still there and adhered to, but on the other hand, because of the, again, globalization, the seeping across or leaking across of information and impact of cases, there has to be a different dialogue now than there was prior to september 11. >> very interesting issues for you and for me. i should note that, of course, part of what makes it so

challenging to live through and to teach is that history shows us, going back 30, 40 years, the sometimes folks in the white house are in positions where they take points of view and argue for actions that may not always be completely -- >> i will not always say they are always happy with us. not at all. am i going back for a moment to the issue of the many balls that the fbi keeps in the air at the same time, we have a number of questions about the investigation of financial fraud. this is certainly a challenging time in which to work in that space, so can you tell us about what priority the fbi is placing on financial fraud, mortgage- backed securities, or anything of that nature. >> that is one of our main priorities. it has been since 2001, and it was before then, but what you find is financial fraud goes up and down in ways. in the wake of 2001, 2002, 2003,

we had a wave of cases, as i alluded to. a number of large corporations where billions were lost in terms of shareholder value with a cooking of the books. we had a very large inventory back in 2002. we worked that off. then comes the mortgage fraud crisis. we have close to thousand -- close to 2000 investigations across the country. we have a number of investigations. many of you have seen them on wall street and new york. it may not be an obvious one, but also those relating to insider trading that we continue to handle. we will get through this surge in cases in the next two or three years, but i can guarantee you, four or five years down the road, there will be another scheme that we hope to anticipate, but another way of making money illegally in what

you would call white collar. we beef up to address the wave as it comes, but we hope to do a better job down the road with intelligence to anticipate the next wave and hopefully address it before it really gets going. >> we have a number of questions about what advice you may have for people entering public service, just beginning their careers, but i want to broaden that question end of the all of us who have worked in government have come across extraordinary individuals who are public servants who work very hard to take personal risks in some cases, who go beyond the call of duty, and that is a great credit to our country, but it is also true that attracting and retaining wonderful people is difficult. wanted to hear a little bit about how you approach the challenge of attracting and retaining excellent people at the fbi and how that has changed during your time as director. >> people do ask me what it in my career. i had a high school didn't come

to me at one point asking -- a high-school student come to me at one point asking if i could get him into princeton. i told him i could get him into the marine corps, which would be better for him in the long run. one of the interesting things in the dialogue i have had with myself over time is the average age of starting at the i agents is 30. when i first came on, i thought you do your 20 years, retire at 50, and it really precludes us from doing the type of recruiting on campus the other agencies do. over time, i came to find out that for us, we need the experience that we get. having people come in from other careers -- for instance, we have a number of persons who have done fairly well legitimately and honestly on wall street who have come with us who are now doing the investigations of the

securities fraud. we had back in the anthrax attacks of 2002, approximately 1000 individuals throughout the united states who had in some way, shape, or form address anthrax in the course of their studies. if you are going to do an interview with someone handling anthrax, you want either a biochemist or someone who has both the background as well as someone who has the investigative capabilities and techniques to do that questioning. we brought in chemists, biologists, persons with area studies, language skills, engineers, and they all had a career before hand, which has been important to giving us the bretts -- breadth we need to address the threats we talked about today appeared more than anything else, i have come to believe that the power you give a special agent is substantial. what you want primarily is

persons with judgment and a good decision-making ability. and the persons who have had another career, persons who are a little bit older tend to, we believe, exercise an exhibit that judgment, which is so necessary to what we do. one last thing in terms of public service. everybody sitting at the table, i have a number of united states attorneys. almost all of them have been in the u.s. attorney's office before. some of them are still in private practice. good luck to them. but a number of us have bounced back and forth. i think a number of us would say the most rewarding time we have had has been the time when we were in public service. you are given the opportunity to contribute. it really is a gift. the biggest gift i have had the opportunity to do this kind of work. and if the challenge of

attracting and retaining great people is one that cuts across administration's where you serve, another is responding to concerns about the patriot acts. i wanted to give you a chance about what the fbi has learned in your view about the patriot act since it passed. >> the greatest benefit of the patriot act was a breakdown of the statutory walls between the fbi and cia. those walls were erected some time ago where what you did internationally had very little bearing on what was done domestically and vice versa. you cannot get a picture of a threat, whether it be a cyber threat or narcotics or trafficking in prison or child pornography, terrorism, espionage, by looking solely on the one hand from the domestic perspective and on the other hand from the international perspective. you absolutely have to integrate that knowledge and intelligence in order to be effective in this day and age. the great benefit of the patriot

act as it broke down those walls. prior to the patriot acts, within the bureau, those who were doing the national security work could not talk to criminal agents and vice versa, much less have persons in the fbi talked to the cia or nsa or others. the great benefit of the patriot act is it did away with that and enabled us to build those relationships, change that culture, and understand that in order for us to be successful, we had to work closely together on any number of these threats. >> is there anything you would >> what about national security letters? >> national security letters was the device given to us to gather information on the existence of the telephone call. we had a procedure we needed to follow. in most cases, we did. in a number of cases, we did not have the procedures.

we move ahead quickly and did not put in place procedures to assure we have the proper paperwork and foundation in requesting those letters. we have put into place a software program that insures you have the appropriate foundation before a new issue a national security letter. we have had training. we have had continuous oversight on that issue. in the overall context of things, it was not that we were getting information to which we were not entitled. we did not put in place the predicates we should have to ensure to those looking at it that we did have the appropriate predicate. we resolved that issue. >> we have a number of questions that want to understand what your life is like today. share a typical day in the life of an fbi director. of an fbi director. >>