[Senate Hearing 109-363]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-363
 
 CURRENT AND FUTURE WORLDWIDE THREATS TO THE NATIONAL SECURITY OF THE 
                             UNITED STATES

=======================================================================

                                HEARING

                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 17, 2005

                               __________

         Printed for the use of the Committee on Armed Services


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                      COMMITTEE ON ARMED SERVICES

                    JOHN WARNER, Virginia, Chairman

JOHN McCAIN, Arizona                 CARL LEVIN, Michigan
JAMES M. INHOFE, Oklahoma            EDWARD M. KENNEDY, Massachusetts
PAT ROBERTS, Kansas                  ROBERT C. BYRD, West Virginia
JEFF SESSIONS, Alabama               JOSEPH I. LIEBERMAN, Connecticut
SUSAN M. COLLINS, Maine              JACK REED, Rhode Island
JOHN ENSIGN, Nevada                  DANIEL K. AKAKA, Hawaii
JAMES M. TALENT, Missouri            BILL NELSON, Florida
SAXBY CHAMBLISS, Georgia             E. BENJAMIN NELSON, Nebraska
LINDSEY O. GRAHAM, South Carolina    MARK DAYTON, Minnesota
ELIZABETH DOLE, North Carolina       EVAN BAYH, Indiana
JOHN CORNYN, Texas                   HILLARY RODHAM CLINTON, New York
JOHN THUNE, South Dakota

                    Judith A. Ansley, Staff Director

             Richard D. DeBobes, Democratic Staff Director

                                  (ii)

  
?



                            C O N T E N T S

                               __________

                    CHRONOLOGICAL LIST OF WITNESSES

 Current and Future Worldwide Threats to the National Security of the 
                             United States

                             march 17, 2005

                                                                   Page

Goss, Hon. Porter J., Director of Central Intelligence...........     4
Jacoby, VADM Lowell E., USN, Director, Defense Intelligence 
  Agency.........................................................    12

                                 (iii)


 CURRENT AND FUTURE WORLDWIDE THREATS TO THE NATIONAL SECURITY OF THE 
                             UNITED STATES

                              ----------                              


                        THURSDAY, MARCH 17, 2005

                                       U.S. Senate,
                               Committee on Armed Services,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:35 a.m. in room 
SD-106, Dirksen Senate Office Building, Senator John Warner 
(chairman) presiding.
    Committee members present: Senators Warner, McCain, Inhofe, 
Roberts, Sessions, Talent, Cornyn, Thune, Levin, Kennedy, 
Lieberman, Bill Nelson, E. Benjamin Nelson, Dayton, and 
Clinton.
    Committee staff members present: Judith A. Ansley, staff 
director; and Leah C. Brewer, nominations and hearings clerk.
    Majority staff members present: Charles W. Alsup, 
professional staff member; Gregory T. Kiley, professional staff 
member; Thomas L. MacKenzie, professional staff member; Lynn F. 
Rusten, professional staff member; and Richard F. Walsh, 
counsel.
    Minority staff members present: Richard D. DeBobes, 
Democratic staff director; Evelyn N. Farkas, professional staff 
member; Richard W. Fieldhouse, professional staff member; 
Creighton Greene, professional staff member; Bridget W. 
Higgins, research assistant; and William G.P. Monahan, minority 
counsel.
    Staff assistants present: Catherine E. Sendak, Bridget E. 
Ward, Nicholas W. West, and Pendred K. Wilson.
    Committee members' assistants present: Cord Sterling, 
assistant to Senator Warner; John A. Bonsell, assistant to 
Senator Inhofe; Chris Arnold, assistant to Senator Roberts; 
Arch Galloway II, assistant to Senator Sessions; Mackenzie M. 
Eaglen, assistant to Senator Collins; Russell J. Thomasson, 
assistant to Senator Cornyn; Bob Taylor, assistant to Senator 
Thune; Mieke Y. Eoyang, assistant to Senator Kennedy; Frederick 
M. Downey, assisant to Senator Lieberman; Elizabeth King, 
assistant to Senator Reed; Richard Kessler, assistant to 
Senator Akaka; William K. Sutey, assistant to Senator Bill 
Nelson; and Eric Pierce, assistant to Senator Ben Nelson.

       OPENING STATEMENT OF SENATOR JOHN WARNER, CHAIRMAN

    Chairman Warner. Good morning. The committee meets this 
morning to hear from the very distinguished Director of Central 
Intelligence (DCI), Porter Goss, and the Director of Defense 
Intelligence, Admiral Lowell Jacoby. We welcome you.
    There are few if any precedents for the challenges our 
Intelligence Community faces in this post-September 11 world. 
The security of our Nation and the success of our Armed Forces 
of the United States and their security themselves is so 
dependent on the hard work of thousands and thousands of 
civilians and uniformed persons who are proud to say they are 
professionals and comprise the overall U.S. intelligence 
system. We salute them and we thank them.
    We are entering an important new era for our Intelligence 
Community. Last fall, Congress passed and the President signed 
into law the Intelligence Reform Act of 2004. Ambassador 
Negroponte has been nominated to be the first Director of 
National Intelligence (DNI), and we have been fortunate as 
American citizens to have the continuing public services of 
Director Goss.
    During the time of transition it is of utmost importance 
that critical intelligence support our national leadership as 
well as our battlefield commanders. Indeed, intelligence 
support should continue to improve. At the same time, it is 
important that all elements of our Intelligence Community, all 
approximately 15 departments and agencies, seize the 
opportunity to improve our intelligence capabilities as best 
they can.
    In a time of war we tend to focus on current military 
operations and we do ask both of our witnesses to give us their 
best estimates regarding the threats our forces are facing in 
Iraq and Afghanistan and elsewhere in the world, and their 
assessment of the political process in this region, 
particularly Afghanistan and Iraq, and how that political 
process blends into not only intelligence-gathering, but also 
the security of our forces.
    We must not lose sight of the other threats around the 
world. It is complex and ever-changing. Indeed, the Korean 
peninsula, Iran, proliferation of weapons of mass destruction 
(WMD) and missile technologies, and accelerating military 
buildup under way in China, are trends which bear on our 
current security situation and future.
    A special interest of the committee is the evolving 
situation in the Middle East. After years of violence and 
hopelessness that has fueled terrorism and discontent 
throughout the region and indeed throughout the world, there 
are signs of change and hope: free elections in Iraq, the call 
for democracy, an end to the Syrian occupation in Lebanon, free 
elections in the Palestine territories, a promising commitment 
to peace by President Abbas, electoral reform in Egypt, Saudi 
Arabia, and elsewhere, and the list goes on. I would hope our 
witnesses would comment on that.
    Again, I thank you for your service.
    Senator Levin.

                STATEMENT OF SENATOR CARL LEVIN

    Senator Levin. Mr. Chairman, thank you, and let me first 
join you in welcoming our witnesses to our committee this 
morning and to this hearing on the threats facing the United 
States.
    We need to have credible intelligence to wisely address 
these threats. The Intelligence Community's massive 
intelligence failures before the Iraq War, set forth in the 
500-page report of the Senate Select Committee on Intelligence, 
understandably raised questions about the reliability of 
intelligence assessments. Making decisions based on faulty 
intelligence risks the lives of our men and women in the Armed 
Forces. Decisions based on erroneous intelligence relative to 
Iran and North Korea, for instance, could be life and death 
decisions for millions and indeed for nations.
    Faulty intelligence plays into the hands of those in the 
world who bear us ill will. Because our credibility globally 
has been harmed by the intelligence failure in Iraq, there is 
less support from people and nations around the world for the 
United States and for the war on terrorism. As Admiral Jacoby 
says in his prepared statement, ``Multiple polls show favorable 
ratings for the United States in the Muslim world at all-time 
lows.'' While there are a number of reasons for the situation 
to which that statement refers, I believe that having been so 
wrong on our intelligence assessments before the Iraq war was a 
significant contributor to this negative view of the United 
States.
    Harmful consequences to our security follow from such a 
situation because we depend on other people and other nations 
to provide us with valuable tips in information, i.e., 
intelligence. When we face future international security crises 
based on our Intelligence Community's assessment that there is 
a threat, we will undoubtedly seek the support and cooperation 
of the international community. It will be harder to secure 
that cooperation if our intelligence is not viewed as credible 
and objective.
    Admiral Jacoby also notes in his opening statement that, 
``Most Iraqis see Coalition Forces as occupiers and as a major 
cause of the insurgency.'' I hope that the new Iraqi Government 
will as a matter of the highest priority invite the 
international community, including the United States, to have 
military forces in Iraq. I believe that such an invitation 
could help to change the perception that we are an occupying 
force to one of an invited partner, working with the Iraqi 
security forces to bring stability to Iraq. Such an explicit 
invitation from the new Iraqi Government could also lead more 
countries, including Muslim countries, to provide troops, 
training, equipment, and other resources to Iraq. Such a change 
in perception could facilitate a greater willingness of the 
Iraqi people to provide intelligence on the insurgents, could 
reduce the numbers of deaths and injuries among Coalition 
Forces, could lead to an earlier takeover of security by Iraqis 
and to our earlier departure.
    Finally, I would note that since this time last year 
Congress passed the Intelligence Reform and Terrorism 
Prevention Act of 2004. I hope that the reforms that are under 
way will improve our ability to deal with threats to our Nation 
and to our people and I would be interested in hearing what our 
witnesses could tell us about whatever progress may have been 
made in implementing Intelligence Community reforms to this 
point.
    This committee has a special responsibility to the men and 
women of our Armed Forces to be vigilant on intelligence 
programs because decisions to use military force and planning 
for military operations depend so heavily on intelligence. Our 
witnesses are keenly aware of their heavy responsibility and we 
look forward to their testimony.
    Chairman Warner. Thank you, Senator Levin.
    Director Goss, we are prepared to have your statement. We 
welcome you to the committee.

     STATEMENT OF HON. PORTER J. GOSS, DIRECTOR OF CENTRAL 
                          INTELLIGENCE

    Mr. Goss. Thank you, Chairman Warner and Ranking Member 
Levin, thank you, for the opportunity to be here today. I would 
ask unanimous consent that my full statement could be made part 
of the record so I could abbreviate my statement, sir.
    Chairman Warner. Without objection, and that will likewise 
apply to Admiral Jacoby.
    Mr. Goss. Mr. Chairman, Mr. Levin: Thank you so much for 
the opportunity to be here today. I hope to accomplish a number 
of things during this time. I want to briefly share with you my 
thoughts relative to the threats that are facing the United 
States in the coming years. But by virtue of the unclassified 
nature of this setting, I am not going to go into a great deal 
of detail, and I do look forward to a more in-depth discussion 
of the threats with the committee in our closed session.
    I also want to discuss the broader issue of capabilities 
the Intelligence Community requires to face these threats. The 
capabilities issue is one that fundamentally impacts the way we 
support policymakers and warfighters, and of course we need 
your help with the capabilities question.
    The war on terrorism has presented the Intelligence 
Community with challenges unlike any before. In response, we 
have changed some of the ways we gather secrets. We are facing 
small groups of terrorists and extremists, rather than standing 
armies. They operate out of homes and caves rather than 
military bases and government entities. They do not necessarily 
wear uniforms, they do not always use conventional ordinance, 
and they do not observe norms and standards of civilized 
society. Only a few individuals may know the complete plan of 
any given terrorist plot.
    Professional interrogation has become a very useful and 
necessary way to obtain information to save innocent lives, to 
disrupt terrorist schemes, and to protect our combat forces. 
The United States Government has had documented success 
protecting people and capturing terrorists with such 
information. As I have publicly said before, the United States 
Government does not engage in or condone torture.
    We will continue to be successful and take terrorists and 
extremists off the battlefield, but these are risky activities 
we undertake and I will be asking the men and women of the 
Central Intelligence Agency (CIA) to take even more risks, 
justifiable risks, in the months and days to come. I would much 
rather explain why we did something than why we did nothing, 
and I am asking your support in that endeavor.
    The volume and scope of information that the Intelligence 
Community collects, processes, and provides to policymakers and 
warfighters has grown tremendously. We face several issues 
here. First, I believe we have made great strides in improving 
the information flow between analysts at the CIA, the Federal 
Bureau of Investigation (FBI), Department of Homeland Security 
(DHS), and others. We still face challenges. We all understand 
this and we are working hard to improve the information-sharing 
in all directions, horizontal and vertical, and those are some 
of the implementations that Senator Levin was referring to in 
his opening remark.
    Second, as we continually vet sources of threat information 
we need to do better at discerning what is a real threat and 
what is just wishful thinking and to establish a threshold for 
devoting analytical and operational resources, which are 
precious, to track down a lead. Establishing this threshold is 
also critical to our ability to provide intelligence on options 
for strategic decisions and to give the American public an 
accurate assessment of the actual threat facing this country.
    Third, for all the successes we have had and the advances 
we have made, serious and unnecessary damage has been caused by 
media leaks. Unauthorized disclosure of classified information 
threatens the survivability of the sources and methods that we 
depend upon. We have lost opportunity, if not capability, 
because of irresponsible leaks and this has made it easier for 
our enemies.
    Collecting secrets and keeping them secret is only half the 
battle. Having intelligence that is actionable and is acted 
upon through clearly defined mechanisms is just as critical. 
Terrorists brought the war to our soil. We have taken the war 
to them. Sometimes this requires what we euphemistically call a 
kinetic solution on foreign soil. We have to be able to use all 
of the tools at our disposal and understand the consequences of 
how we use them. Dealing successfully with dangerous terrorists 
requires rapid application of proper capabilities, whether the 
U.S. Government is conducting planned strikes or exploiting 
targets of opportunity.
    I welcome the President's directive to increase the CIA's 
human intelligence (HUMINT) and analytical capabilities by 
nearly half. The good news is that smart, eager, and talented 
people are applying for work in record numbers. Recruiting, 
training, equipping, and retaining the new, more diverse work 
force will be a growing endeavor, and it is one we have under 
way.
    To do so, I want to help establish a National University of 
Intelligence, not just for the CIA but for all agencies within 
the Intelligence Community. This will be one initiative I will 
bring to the DNI when he gets started. This will help define a 
new Intelligence Community culture, better coordinate the way 
we do business across government, and enhance a willing 
cooperation among all.
    I look forward to DNI's confirmation and leadership in 
bringing together the collective efforts of our Intelligence 
Community. He will be faced with decisions about how 
information is collected, prepared, and delivered to the 
President and to other senior leaders and customers. I am ready 
to help DNI marshall the efforts and resources of the domestic 
and intelligence operations of Intelligence Community agencies, 
not just in the war on terrorism, but also in our other 
necessary global endeavors.
    As I turn over the DCI responsibilities for the 
Intelligence Community, I am confident that the 15 agencies in 
the Intelligence Community will rally around the DNI and bring 
their unique abilities to bear on the joint mission of making 
America safer.
    Now, turning to those specific threats other than 
terrorism, I will not attempt to cover everything that could go 
wrong in the year ahead. That would be a very long list. We 
must and do concentrate our efforts, experience, and expertise 
on matters that are most pressing, and obviously defeating 
terrorism is one. Protecting the homeland goes with that; 
stopping proliferation of WMD and, of course, the proliferation 
of drugs. More people are killed every year from illegal use of 
drugs in this country than by terrorism. Fostering stability, 
freedom, and peace in the most troubled regions of the world 
obviously is at the top of our list as well.
    Mr. Chairman, defeating terrorism will remain our top 
objective. Widely dispersed terrorist networks present real 
danger to U.S. national security interests at home and abroad. 
Our reporting indicates al Qaeda is intent on finding ways to 
circumvent U.S. security enhancements, to strike Americans and 
our homeland. Their intent, perhaps their passion, to harm us 
for being who we are, is just as vital as it ever was.
    Our reporting that al Qaeda or another group wants to use 
chemical, biological, radiological, and/or nuclear weapons 
cannot be ignored. The threat from the Sunni jihadist movement 
is broad. We have witnessed this in Madrid, Bali, the 
Philippines, Saudi Arabia, and of course many other places. It 
is worth noting that other groups in Pakistan, Southeast Asia, 
Central Asia, East Africa, and Europe also pose a significant 
threat to our security and interests. In Iraq, Zarqawi merged 
his organization with al Qaeda last year, seeking to bring 
about the final victory in his version of Islam over the 
infidels and apostates.
    Under proliferation, let me begin with Libya, a good news 
story and one that shows that with patient perseverance the 
Intelligence Community can tackle and achieve remarkable 
things. In 2004, Tripoli followed through with a range of steps 
to disarm itself of WMD and ballistic missiles. The U.S. 
continues to work with Libya to clarify some discrepancies in 
that declaration, but all in all we are seeing some very 
helpful cooperation from Tripoli these days.
    Looking at North Korea and Iran, we have different issues. 
Pyongyang has announced it has a nuclear weapon capability. 
Concern remains that Iran could utilize the uranium enrichment 
technology it is pursuing to achieve a nuclear weapon.
    In other areas of concern more traditionally, we go to the 
countries. In China, Beijing's military modernization and 
modernization buildup, which I know has not gone unnoticed by 
this committee, are posing new questions for us. Improved 
Chinese capabilities seemingly threaten U.S. forces in the 
region. China's recent legislation on anti-secession speaks for 
itself.
    In Russia, the attitudes and actions of the former 
Committee for State Security of the Former Soviet Union (KGB) 
associates that President Putin has placed in positions of 
power throughout the Russian Government may be critical 
determinants of the course Putin will pursue in the year ahead.
    In the Middle East, the election of Palestinian President 
Mahmoud Abbas, of course, marks a very welcome step forward. 
There nevertheless are real hurdles ahead as the Palestinian 
leadership tries to rebuild the Palestinian Authority and to 
counter terrorist groups that could destabilize the current 
calm and derail talks. They have apparently not lost their 
desire to do that.
    In Southeast Asia, the Philippines is struggling with 
prolonged radical Islamic and communist rebellion and the 
presence of terrorists seeking safe haven and training bases. 
Thailand is plagued with an increasingly volatile separatist 
threat in its southeastern provinces and the risk of escalation 
remains there.
    In Africa, chronic instability in countries such as the 
Sudan and Nigeria and in areas such as the Horn of Africa will 
continue to hamper counterterrorism efforts and offer potential 
sanctuary for terrorists.
    In Latin America, the region is entering a major electoral 
cycle in 2005-2006 when Brazil, Colombia, Costa Rica, Ecuador, 
Mexico, Nicaragua, Peru, Venezuela, and now Bolivia are 
scheduled to hold presidential elections. Several key countries 
in the hemisphere are potential flash points in 2005, including 
Venezuela, Haiti, Colombia, and Cuba.
    Mr. Chairman, Senator Levin, again I want to thank you for 
this opportunity. There are an awful lot of sore spots out 
there on this globe. We are trying to stay on top of them so we 
are well informed and can keep you informed, so that we all can 
take the appropriate actions on behalf of the United States of 
America. The help of your committee to this exercise will be 
invaluable to us.
    I thank you for the opportunity to be here to say that and 
to answer the questions you may have for me. I would be very 
happy to expand on assessments, as you suggested, Mr. Chairman, 
on the situation and the opportunities ahead of us in 
Afghanistan and Iraq, should you so desire.
    [The prepared statement of Mr. Goss follows:]

               Prepared Statement by Hon. Porter J. Goss

    Good morning, Mr. Chairman, Ranking Member Levin, members of the 
committee. It is my honor to meet with you today to discuss the 
challenges I see facing America and its interests in the months ahead. 
These challenges literally span the globe. My intention is to tell you 
what I believe are the greatest challenges we face today and those 
where our service as intelligence professionals is needed most on 
behalf of the U.S. taxpayer.
    We need to make tough decisions about which haystacks deserve to be 
scrutinized for the needles that can hurt us most. We know in this 
information age that there are endless haystacks everywhere. I do want 
to make several things clear:

         Our officers are taking risks, and I will be asking 
        them to take more risks--justifiable risks--because I would 
        much rather explain why we did something than why we did 
        nothing.
         I am asking for more competitive analysis, more 
        collocation of analysts and collectors, and deeper 
        collaboration with agencies throughout the Intelligence 
        Community. Above all, our analysis must be objective. Our 
        credibility rests there.
         We do not make policy. We do not wage war. I am 
        emphatic about that and always have been. We do collect and 
        analyze information.

    With respect to the Central Intelligence Agency (CIA), I want to 
tell you that my first few months as Director have served only to 
confirm what I and Members of Congress have known about CIA for years. 
It is a special place--an organization of dedicated, patriotic people. 
In addition to taking a thorough, hard look at our own capabilities, we 
are working to define CIA's place in the restructured Intelligence 
Community--a community that will be led by a new Director of National 
Intelligence (DNI)--to make the maximum possible contribution to 
American security at home and abroad. The CIA is and will remain the 
flagship agency, in my view. Each of the other 14 elements in the 
community will continue to make their unique contributions as well.
    Now, I turn to threats. I will not attempt to cover everything that 
could go wrong in the year ahead. We must, and do, concentrate our 
efforts, experience and expertise on the challenges that are most 
pressing: defeating terrorism; protecting the homeland; stopping 
proliferation of weapons of mass destruction (WMD) and drugs; and 
fostering stability, freedom, and peace in the most troubled regions of 
the world. Accordingly, my comments today will focus on these duties. I 
know well from my 30 years in public service that you and your 
colleagues have an important responsibility with these open sessions to 
get information to the American people. But I also know all too well 
that as we are broadcasting to America, enemies are also tuning in. In 
open session I feel I must be very prudent in my remarks as DCI.

                               TERRORISM

    Mr. Chairman, defeating terrorism must remain one of our 
Intelligence Community's core objectives, as widely dispersed terrorist 
networks will present one of the most serious challenges to U.S. 
national security interests at home and abroad in the coming year. In 
the past year, aggressive measures by our intelligence, law 
enforcement, defense and homeland security communities, along with our 
key international partners have dealt serious blows to al Qaeda and 
others. Despite these successes, however, the terrorist threat to the 
U.S. in the homeland and abroad endures.

         Al Qaeda is intent on finding ways to circumvent U.S. 
        security enhancements to strike Americans and the homeland.
         It may be only a matter of time before al Qaeda or 
        another group attempts to use chemical, biological, 
        radiological, and nuclear (CBRN) weapons.
         Al Qaeda is only one facet of the threat from a 
        broader Sunni jihadist movement.
         The Iraq conflict, while not a cause of extremism, has 
        become a cause for extremists.

    We know from experience that al Qaeda is a patient, persistent, 
imaginative, adaptive, and dangerous opponent. But it is vulnerable and 
we and other allies have hit it hard.

         Jihadist religious leaders preach millennial 
        aberrational visions of a fight for Islam's survival. Sometimes 
        they argue that the struggle justifies the indiscriminate 
        killing of civilians, even with CBRN weapons.

    Our pursuit of al Qaeda and its most senior leaders, including 
Osama bin Laden and his deputy Ayman al-Zawahiri is intense. However, 
their capture alone would not be enough to eliminate the terrorist 
threat to the U.S. homeland or U.S. interests overseas. Often 
influenced by al Qaeda's ideology, members of a broader movement have 
an ability to plan and conduct operations. We saw this last March in 
the railway attacks in Madrid conducted by local Sunni extremists. 
Other regional groups--connected to al Qaeda or acting on their own--
also continue to pose a significant threat.

         In Pakistan, terrorist elements remain committed to 
        attacking U.S. targets. In Saudi Arabia, remnants of the Saudi 
        al Qaeda network continue to attack U.S. interests in the 
        region.
         In Central Asia, the Islamic Jihad Group (IJG), a 
        splinter group of the Islamic Movement of Uzbekistan, has 
        become a more virulent threat to U.S. interests and local 
        governments. Last spring the group used female operatives in a 
        series of bombings in Uzbekistan.
         In Southeast Asia, the Jemaah Islamiyah (JI) continues 
        to pose a threat to U.S. and Western interests in Indonesia and 
        the Philippines, where JI is colluding with the Abu Sayyaf 
        Group and possibly the Moro Islamic Liberation Front (MILF).
         In Europe, Islamic extremists continue to plan and 
        cause attacks against U.S. and local interests, some that may 
        cause significant casualties. In 2004 British authorities 
        dismantled an al Qaeda cell and an extremist brutally killed a 
        prominent Dutch citizen in the Netherlands.

    Islamic extremists are exploiting the Iraqi conflict to recruit new 
anti-U.S. jihadists.

         These jihadists who survive will leave Iraq 
        experienced in and focused on acts of urban terrorism. They 
        represent a potential pool of contacts to build transnational 
        terrorist cells, groups, and networks in Saudi Arabia, Jordan, 
        and other countries.
         Zarqawi, who merged his organization with al Qaeda 
        last year, has sought to bring about the final victory of Islam 
        over the west, and he hopes to establish a safe haven in Iraq 
        from which his group could operate against ``infidel'' western 
        nations and ``apostate'' Muslim governments.

    Other terrorist groups spanning the globe also pose persistent and 
serious threats to U.S. and western interests.

         Hizballah's main focus remains Israel, but it could 
        conduct lethal attacks against U.S. interests quickly upon a 
        decision to do so.
         Palestinian terrorist organizations have largely 
        refrained from directly targeting U.S. or western interests in 
        their opposition to Middle East peace initiatives, but pose an 
        ongoing risk to U.S. citizens that could be killed or wounded 
        in attacks intended to strike Israeli interests.
         Extremist groups in Latin America are still a concern, 
        with the Revolutionary Armed Forces of Colombia (FARC)--
        possessing the greatest capability and the clearest intent to 
        threaten U.S. interests in the region.
         Horn of Africa, the Sahel, the Mahgreb, the Levant, 
        and the Gulf States are all areas where ``pop up'' terrorist 
        activity can be expected.

                              AFGHANISTAN

    Mr. Chairman, Afghanistan, once the safe haven for Osama bin Laden, 
has started on the road to recovery after decades of instability and 
civil war. Hamid Karzai's election to the presidency was a major 
milestone. Elections for a new National Assembly and local district 
councils--tentatively scheduled for this spring--will complete the 
process of electing representatives.
    President Karzai still faces a low-level insurgency aimed at 
destabilizing the country, raising the cost of reconstruction and 
ultimately forcing Coalition Forces to leave.

         The development of the Afghan National Army and a 
        national police force is going well, although neither can yet 
        stand on its own.

                                  IRAQ

    Since the successful completion of elections in January, the 
winning parties have been negotiating peacefully to create a new 
government and have pledged to include all of Iraq's major groups, even 
Arab Sunnis who largely stayed away from the polls, in drafting the new 
Iraqi constitution.
    Low voter turnout in some Sunni areas, however, and the post-
election resumption of insurgent attacks--many against Iraqi civilian 
and security forces--indicate that the insurgency achieved at least 
some of its election-day goals and remains a serious threat to creating 
a stable representative government in Iraq.
    Self-determination for the Iraqi people will largely depend on the 
ability of Iraqi forces to provide security. Iraq's most capable 
security units have become more effective in recent months, 
contributing to several major operations and helping to put an Iraqi 
face on security operations. Insurgents are determined to discourage 
new recruits and undermine the effectiveness of existing Iraqi security 
forces.

         The lack of security is hurting Iraq's reconstruction 
        efforts and economic development, causing overall economic 
        growth to proceed at a much slower pace than many analysts 
        expected a year ago.
         Alternatively, the larger uncommitted moderate Sunni 
        population and the Sunni political elite may seize the post 
        electoral moment to take part in creating Iraq's new political 
        institutions if victorious Shia and Kurdish parties include 
        Sunnis in the new government and the drafting of the 
        constitution.

                             PROLIFERATION

    Mr. Chairman, I will now turn to the worldwide challenge of 
proliferation. Last year started with promise as Libya had just 
renounced its WMD programs, North Korea was engaged in negotiations 
with regional states on its nuclear weapons program, and Iran was 
showing greater signs of openness regarding its nuclear program after 
concealing activity for nearly a decade. Let me start with Libya, a 
good news story, and one that reflects the patient perseverance with 
which the Intelligence Community can tackle a tough intelligence 
problem.

                                 LIBYA

    In 2004 Tripoli followed through with a range of steps to disarm 
itself of WMD and ballistic missiles.

         Libya gave up key elements of its nuclear weapons 
        program and opened itself to the International Atomic Energy 
        Agency (IAEA).
         Libya gave up some key chemical weapon (CW) assets and 
        opened its former CW program to international scrutiny.
         After disclosing its Scud stockpile and extensive 
        ballistic and cruise missile research and development efforts 
        in 2003, Libya took important steps to abide by its commitment 
        to limit its missiles to the 300-km range threshold of the 
        Missile Technology Control Regime (MTCR).

    The U.S. continues to work with Libya to clarify some discrepancies 
in the declaration.

                              NORTH KOREA

    Since early February, Pyongyang has announced it was suspending 
participation in the Six-party talks underway since 2003, declared it 
had nuclear weapons, affirmed it would seek to increase its nuclear 
arsenal, and said it was no longer bound by its self-imposed moratorium 
on launching missiles. When it was still at the negotiating table, the 
North had been pushing for a freeze on its plutonium program in 
exchange for significant benefits, rather than committing to the full 
dismantlement that we and are our partners sought.

         In 2003, the North claimed it had reprocessed the 
        8,000 fuel rods from the Yongbyon reactor, originally stored 
        under the Agreed Framework, with IAEA monitoring in 1994. The 
        North claims to have made new weapons from its reprocessing 
        effort.
         We believe North Korea continues to pursue a uranium 
        enrichment capability drawing on the assistance it received 
        from A.Q. Khan before his network was shutdown.

    North Korea continues to develop, produce, deploy, and sell 
ballistic missiles of increasing range and sophistication, augmenting 
Pyongyang's large operational force of Scud and No Dong class missiles. 
North Korea could resume flight-testing at any time, including of 
longer-range missiles, such as the Taepo Dong-2 system. We assess the 
TD-2 is capable of reaching the United States with a nuclear-weapon-
sized payload.

         North Korea continues to market its ballistic missile 
        technology, trying to find new clients now that some 
        traditional customers, such as Libya, have halted such trade.

    We believe North Korea has active CW and biological weapons 
programs and probably has chemical and possibly biological weapons 
ready for use.

                                  IRAN

    In early February, the spokesman of Iran's Supreme Council for 
National Security publicly announced that Iran would never scrap its 
nuclear program. This came in the midst of negotiations with the 
European Union-3 (EU-3) members (Britain, Germany, and France) seeking 
objective guarantees from Tehran that it will not use nuclear 
technology for nuclear weapons.

         Previous comments by Iranian officials, including 
        Iran's Supreme Leader and its Foreign Minister, indicated that 
        Iran would not give up its ability to enrich uranium. Clearly, 
        that technology can be used to produce fuel for power reactors. 
        However, we are more concerned about the dual-use nature of the 
        technology that could also be used to achieve a nuclear weapon.

    In parallel, Iran continues its pursuit of long-range ballistic 
missiles, such as an improved version of its 1,300 km range Shahab-3 
medium range ballistic missile (MRBM), to add to the hundreds of short-
range SCUD missiles it already has.
    Even since September 11, Tehran continues to support terrorist 
groups in the region, such as Hizballah, and could encourage increased 
attacks in Israel and the Palestinian Territories to derail progress 
toward peace.

         Iran reportedly is supporting some anti-coalition 
        activities in Iraq and seeking to influence the future 
        character of the Iraqi state.
         Conservatives are likely to consolidate their power in 
        Iran's June 2005 presidential elections, further marginalizing 
        the reform movement last year.
         Iran continues to retain in secret important members 
        of al Qaeda, causing further uncertainty about Iran's 
        commitment to bring them to justice.

                                 CHINA

    Beijing's military modernization and military buildup is tilting 
the balance of power in the Taiwan Strait. Improved Chinese 
capabilities threaten U.S. forces in the region.

         In 2004, China increased its ballistic missile forces 
        deployed across from Taiwan and rolled out several new 
        submarines.
         China continues to develop more robust, survivable 
        nuclear-armed missiles as well as conventional capabilities for 
        use in a regional conflict.

    A mild thaw in cross-strait relations, following the first-ever 
non-stop flights across the strait, may be eclipsed by Beijing's anti-
secession law and Taipei's constitutional reform agenda. Beijing 
enacted on 14 March an anti-secession law Taipei characterizes as a 
``war-authorizing law.'' Taipei's National Assembly will vote this 
summer on constitutional reforms that Beijing has warned are part of a 
timeline for independence. If Beijing decides that Taiwan is taking 
steps toward permanent separation that exceed Beijing's tolerance, we 
believe China is prepared to respond with various levels of force.
    China is increasingly confident and active on the international 
stage, trying to ensure it has a voice on major international issues, 
secure access to natural resources, and counter what it sees as U.S. 
efforts to contain or encircle China.
    New leadership under President Hu Jintao is facing an array of 
domestic challenges in 2005, such as the potential for a resurgence in 
inflation, increased dependence on exports, growing economic 
inequalities, increased awareness of individual rights, and popular 
expectations for the new leadership.

                                 RUSSIA

    The attitudes and actions of the so-called ``siloviki''--the ex-KGB 
men that Putin has placed in positions of authority throughout the 
Russian government--may be critical determinants of the course Putin 
will pursue in the year ahead.

         Perceived setbacks in Ukraine are likely to lead Putin 
        to redouble his efforts to defend Russian interests abroad 
        while balancing cooperation with the west. Russia's most 
        immediate security threat is terrorism, and counterterrorism 
        cooperation undoubtedly will continue.
         Putin last summer publicly acknowledged a role for 
        outside powers to play in the CIS, for example, but we believe 
        he is nevertheless concerned about further encroachment by the 
        U.S. and North Atlantic Treaty Organization (NATO) into the 
        region.
         Moscow worries that separatism inside Russia and 
        radical Islamic movements beyond their borders might threaten 
        stability in Southern Russia. Chechen extremists have 
        increasingly turned to terrorist operations in response to 
        Moscow's successes in Chechnya, and it is reasonable to predict 
        that they will carry out attacks against civilian or military 
        targets elsewhere in Russia in 2005.

    Budget increases will help Russia create a professional military by 
replacing conscripts with volunteer servicemen and focus on 
maintaining, modernizing and extending the operational life of its 
strategic weapons systems, including its nuclear missile force.

         Russia remains an important source of weapons 
        technology, materials and components for other nations. The 
        vulnerability of Russian WMD materials and technology to theft 
        or proliferation is a continuing concern.

                    POTENTIAL AREAS FOR INSTABILITY

    Mr. Chairman, in the Middle East, the election of Palestinian 
President Mahmud Abbas marks an important step and Abbas has made it 
clear that negotiating a peace deal with Israel is a high priority. 
There nevertheless are hurdles ahead.

         Redlines must be resolved while Palestinian leaders 
        try to rebuild damaged Palestinian Authority (PA) 
        infrastructure and governing institutions, especially the 
        security forces, the legislature, and the judiciary.
         Terrorist groups, some of who benefit from funding 
        from outside sources, could step up attacks to derail peace and 
        progress.

    In Africa, chronic instability will continue to hamper 
counterterrorism efforts and pose heavy humanitarian and peacekeeping 
burdens.

         In Nigeria, the military is struggling to contain 
        militia groups in the oil-producing south and ethnic violence 
        that frequently erupts throughout the country. Extremist groups 
        are emerging from the country's Muslim population of about 65 
        million.
         In Sudan, the peace deal signed in January will result 
        in de facto southern autonomy and may inspire rebels in 
        provinces such as Darfur to press harder for a greater share of 
        resources and power. Opportunities exist for Islamic extremists 
        to reassert themselves in the North unless the central 
        government stays unified.
         Unresolved disputes in the Horn of Africa--Africa's 
        gateway to the Middle East--create vulnerability to foreign 
        terrorist and extremist groups. Ethiopia and Eritrea still have 
        a contested border, and armed factions in Somalia indicate they 
        will fight the authority of a new transitional government.

    In Latin America, the region is entering a major electoral cycle in 
2006, when Brazil, Colombia, Costa Rica, Ecuador, Mexico, Nicaragua, 
Peru, and Venezuela hold presidential elections. Several key countries 
in the hemisphere are potential flashpoints in 2005.

         In Venezuela, Chavez is consolidating his power by 
        using technically legal tactics to target his opponents and 
        meddling in the region, supported by Castro.
         In Colombia, progress against counternarcotics and 
        terrorism under President Uribe's successful leadership may be 
        affected by the election.
         The outlook is very cloudy for legitimate, timely 
        elections in November 2005 in Haiti--even with substantial 
        international support.
         In Cuba, Castro's hold on power remains firm, but a 
        bad fall last October has rekindled speculation about his 
        declining health and succession scenarios.

    In Southeast Asia, three countries bear close watching.

         In Indonesia, President Yudhoyono has moved swiftly to 
        crackdown on corruption. Reinvigorating the economy, burdened 
        by the costs of recovery in tsunami-damaged areas, will likely 
        be affected by continuing deep-seated ethnic and political 
        turmoil exploitable by terrorists.
         In the Philippines, Manila is struggling with 
        prolonged Islamic and Communist rebellions. The presence of JI 
        terrorists seeking safe haven and training bases adds 
        volatility and capability to terrorist groups already in place.
         Thailand is plagued with an increasingly volatile 
        Muslim separatist threat in its southeastern provinces, and the 
        risk of escalation remains high.

    Chairman Warner. Thank you, Director Goss. That was an 
excellent and comprehensive statement. We will have a closed 
session in SH-219, the Intelligence room, immediately following 
the completion of our questioning here. So there may be issues 
which require you to withhold full answers at this session and 
await the closed.
    Admiral Jacoby.

  STATEMENT OF VADM LOWELL E. JACOBY, USN, DIRECTOR, DEFENSE 
                      INTELLIGENCE AGENCY

    Admiral Jacoby. Good morning, Mr. Chairman, Senator Levin, 
members of the committee. It is my honor and privilege to 
represent the dedicated men and women of Defense Intelligence 
and to take this opportunity to thank this committee for its 
longstanding and continued support for their efforts.
    In my short opening comments here, I would like to talk 
about a few developments over the past year. Let me begin in 
the war on terrorism. The primary threat for the foreseeable 
future remains a transnational network of Islamic extremists 
who are hostile to the U.S. and our interests. That movement 
has changed in the last 12 months away from one that was 
centrally directed by al Qaeda leadership to one that we now 
term an al Qaeda-associated movement. This is a movement of 
like-minded Sunni Islamic groups who interact, share resources, 
and work to achieve shared goals.
    We judge that the terrorist groups, particularly al Qaeda, 
remain interested in chemical, biological, radiological, and 
nuclear weapons and they have a stated intention to conduct an 
attack exceeding the destruction of September 11.
    Underlying the rise of extremism are political and socio-
economic conditions that leave mostly young male adults 
alienated. I have spoken in previous years about failing 
education systems in the Islamic states that contribute to the 
appeal of extremism and groups like al Qaeda, which certainly 
capitalize on the economic and political disenfranchisement. 
Many historical local conflicts, as the DCI has mentioned, such 
as those in Indonesia, the Philippines, and Thailand, are 
generating new support for al Qaeda and present new al Qaeda-
like threats as part of the Sunni movement.
    Turning to Iraq, insurgents continue to demonstrate an 
ability to increase their attacks around key events, but I 
would also notice that yesterday with the stand-up of the new 
government that the Iraqi security forces were very successful 
in conducting a day of high-level activity with low level of 
attacks. But since the January 30 election I believe we have 
seen some changes. Attacks have averaged about 60 per day and 
in the last 2 weeks have dropped to approximately 50 per day 
and appear to be dropping still further, which brings them 
considerably below the high level of activity that existed last 
November.
    Also, the attacks are basically confined to four provinces 
that are in the Sunni heartland in the vicinity around Baghdad. 
In recent weeks, they have actually concentrated on Baghdad and 
three cities in that same four-province area. So there may in 
fact be a change in the character of the insurgency and their 
attack planning, but I would also hasten to add it is too early 
to say whether this is a trend. We need to be watchful and 
assess these changes as we see them evolve.
    We believe that the Sunni Arabs, dominated by the Baathists 
and the former regime elements, comprise the core of the 
insurgency. There are foreign jihadists, most notably those 
that have sworn their allegiance to an operative by the name of 
Zarquawi. They account for a fraction of the overall violence. 
However, the level of destruction that their attacks cause and 
the amount of publicity that they generate gives them 
disproportionate kind of impact on events inside Iraq.
    The keys to success inside Iraq remain improving security 
with an Iraqi lead, rebuilding civil infrastructure and the 
economy, and creating a political process that all ethnic 
groups see as legitimate.
    Shifting to WMD and missile proliferation, this is the 
second most immediate and significant threat to our Nation and 
to international stability. The efforts in Iran to continue a 
nuclear weapons-related effort and their efforts in the area of 
missile development remain worrisome. North Korea considers 
nuclear weapons to be critical to its survival. Its recent 
declaration just highlights that fact. They also continue with 
missile programs.
    Many nations are modernizing and expanding their ballistic 
missile systems and they are a key part of China's military 
modernization program. But as Senator Levin said in his opening 
comments, China continues to modernize its forces across a 
broad range of conventional and missile capabilities and also 
those kinds of capabilities that allow them to coordinate the 
efforts of their military in a more sophisticated way than 
previously existed. This also remains a concern.
    This committee has asked me in the past what keeps me awake 
at night and I was thinking about that as I was preparing for 
this testimony. Senator Inhofe, I believe you have asked that 
on occasion. My answer this year for you is what keeps me awake 
is that we are facing a variety of sophisticated global threats 
of increasing complexity and lethality, and these are threats 
to the U.S., to our allies, and also to our friends. At the 
same time we are sustaining very high operational tempo with 
our people and our capabilities. So we are in the situation of 
simultaneously executing our operations at a very high 
operational tempo and reforming and transforming at the same 
time.
    So what keeps me awake at night is we have very weighty 
decisions to make in terms of priority in the way ahead and I 
hope that we are making good decisions as we move forward.
    In response to Senator Levin's question about what are we 
doing today, we are focusing more resources and capabilities on 
assessing the Islamic world so we can better understand the 
drivers for extremism. We need greater collection and more 
analysts devoted to key countries who are making those shifts 
as part of our plan.
    In the area of proliferation of WMD and missiles, the key 
there is achieving true penetrating collection and an all-
source analytical effort that allows us to see inside these 
very complex and very well-hidden programs. Those are 
absolutely critical to improving our understanding.
    We must not divert our focus and attention from the 
numerous interests and nations of interest. Military 
intelligence disciplines must remain robust if we are to 
provide for our national security policymakers, defense 
planners, and warfighters' decisions and provide them the 
information they need to successfully execute their missions. 
More collection and analysis is needed to provide adequate 
warning of attack and more complete understanding of the 
military capability, doctrine, war plans, and the intentions of 
numerous countries will be required in this more sophisticated 
set of challenges that we face.
    Finally, I believe this committee knows the focus that we 
put in Defense Intelligence on truly operating in an all-source 
information environment and operating with the smart networks 
that were so specifically called out in the 9/11 Commission 
Report as fundamentals for transformation of the way we do 
intelligence within the United States. We will remain outspoken 
advocates for both all-source information access and the smart 
networks.
    Thank you, Mr. Chairman and Senator Levin, for the 
opportunity to be here today and the opportunity to respond to 
your questions.
    [The prepared statement of Admiral Jacoby follows:]

            Prepared Statement by VADM Lowell E. Jacoby, USN

                              INTRODUCTION

    Good morning Mr. Chairman, Senator Levin, and members of the 
committee. It is my honor and privilege to represent Defense 
Intelligence and present what we know and believe to be the principle 
threats and issues in today's world. The dedicated men and women of 
Defense Intelligence work around the clock and around the world to 
protect our country. Many of these Active-Duty, Reserve, and civilian 
intelligence professionals are working in remote and dangerous 
conditions. Our mission is simple, but rarely easy. It is to discover 
information and create knowledge to provide warning, identify 
opportunities and deliver overwhelming advantage to our warfighters, 
defense planners and national security policymakers.
    This is the third time I report to you that Defense Intelligence is 
engaged in a war on a global scale. Most of the forces and issues 
involved in this war were addressed in my testimony last year. Several 
increased in severity or changed in composition. Few, unfortunately, 
decreased.
    The traditional Defense Intelligence focus on military capabilities 
is insufficient to identify and gauge the breadth of these threats. We 
are working hard to access ``all'' information to better understand and 
counter these threats. Defense Intelligence is engaged with foreign and 
domestic counterparts to better integrate our capabilities. We remained 
focused on information sharing and creating the ``smart networks'' 
described in the 9/11 Commission report. I am anxious to work with the 
new Director of National Intelligence (DNI), my fellow intelligence 
agency heads and others to forge a more cohesive and comprehensive 
Intelligence Community.

                        GLOBAL WAR ON TERRORISM

    We continue to face a variety of threats from terrorist 
organizations.
Al Qaeda and Sunni Extremist Groups
    The primary threat for the foreseeable future is a network of 
Islamic extremists hostile to the United States and our interests. The 
network is transnational and has a broad range of capabilities, to 
include mass-casualty attacks. The most dangerous and immediate threat 
is Sunni Islamic terrorists that form the ``al Qaeda associated 
movement.''
    Osama bin Laden and his senior leadership no longer exercise 
centralized control and direction. We now face an ``al Qaeda associated 
movement'' of like-minded groups who interact, share resources and work 
to achieve shared goals. Some of the groups comprising this movement 
include Jemaah Islamiyya, responsible for the 9 September bombing of 
the Australian Embassy in Jakarta and Hezb-e-Islami-Gulbuddin. Some of 
the groups in the movement provide safe haven and logistical support to 
al Qaeda members, others operate directly with al Qaeda, and still 
others fight with al Qaeda in the Afghanistan/Pakistan region.
    Remnants of the senior leadership still present a threat. As is 
clear in their public statements, Osama bin Laden and al-Zawahiri 
remain focused on their strategic objectives, including another major 
casualty-producing attack against the homeland.
Chemical, Biological, Radiological, and Nuclear (CBRN) Terrorism
    We judge terrorist groups, particularly al Qaeda, remain interested 
in chemical, biological, radiological, and nuclear (CBRN) weapons. Al 
Qaeda's stated intention to conduct an attack exceeding the destruction 
of September 11 raises the possibility that planned attacks may involve 
unconventional weapons. There is little doubt it has contemplated using 
radiological or nuclear material. The question is whether al Qaeda has 
the capability. Because they are easier to employ, we believe 
terrorists are more likely to use biological agents such as ricin or 
botulinum toxin or toxic industrial chemicals to cause casualties and 
attack the psyche of the targeted populations.
Pressures in the Islamic World
    Various factors coalesce to sustain, and even magnify the terrorist 
threat.
    Islam is the world's second largest religion with over 1 billion 
adherents, representing 22 percent of the world's population. Due to 
high birth rates, it is also the world's fastest growing religion. Only 
20 percent of Muslims are ethnic Arabs. The top four nations in terms 
of Muslim population, Indonesia, Pakistan, Bangladesh, and India, are 
non-Arab. While the vast majority of Muslims do not advocate violence, 
there are deeply felt sentiments that cross Muslims sects and ethnic 
and racial groups.
    Multiple polls show favorable ratings for the United States in the 
Muslim world at all-time lows. A large majority of Jordanians oppose 
the war on terrorism, and believe Iraqis will be worse off in the long 
term. In Pakistan, a majority of the population holds a favorable view 
of Osama bin Laden. Across the Middle East, surveys report suspicion 
over U.S. motivation for the war on terrorism. Overwhelming majorities 
in Morocco, Jordan, and Saudi Arabia believe the U.S. has a negative 
policy toward the Arab world.
    Osama bin Laden has relied on Muslim resentment toward U.S. 
policies in his call for a defensive jihad to oppose an American 
assault on the Islamic faith and culture. He contends that all faithful 
Muslims are obliged to fight, or support the jihad financially if not 
physically capable of fighting. Another goal is the overthrow of 
``apostate'' Muslim governments, defined as governments which do not 
promote Islamic values or support or are friendly to the U.S. and other 
western countries. The goals also call for withdrawal of U.S. and other 
Coalition Forces from Muslim countries, the destruction of Israel and 
restoration of a Palestinian state and recreation of the caliphate, a 
state based on Islamic fundamental tenets.
    Underlying the rise of extremism are political and socio-economic 
conditions that leave many, mostly young male adults, alienated. There 
is a demographic explosion or youth bubble in many Muslim countries. 
The portion of the population under age 15 is 40 percent in Iraq, 49 
percent in the Gaza Strip and 38 percent in Saudi Arabia. Unemployment 
rates in these countries are as high as 30 percent in Saudi Arabia and 
about 50 percent in the Gaza Strip.
    Educational systems in many nations contribute to the appeal of 
Islamic extremism. Some schools, particularly the private ``madrasas,'' 
actively promote Islamic extremism. School textbooks in several Middle 
East states reflect a narrow interpretation of the Koran and contain 
anti-Western and anti-Israeli views. Many schools concentrate on 
Islamic studies focused on memorization and recitation of the Koran and 
fail to prepare students for jobs in the global economy.
    Groups like al Qaeda capitalize on the economic and political 
disenfranchisement to attract new recruits. Even historically local 
conflicts involving Muslim minorities or fundamentalist groups such as 
those in Indonesia, the Philippines and Thailand are generating new 
support for al Qaeda and present new al Qaeda-like threats.
Saudi Arabia
    Al Saud rule is under significant pressure. In 2004, 15 significant 
attacks occurred against the regime, U.S. and other Western targets in 
the Kingdom, an increase from 7 in 2003. Attacks in 2004 included the 6 
December 2004 attack on the U.S. Consulate in Jeddah.
    Attacks since May 2003 against housing compounds, an Interior 
Ministry facility, a petroleum facility and individual assassinations 
caused Riyadh to attempt to aggressively counter the threat. We expect 
continued assassinations, infrastructure attacks and operations 
directed at Westerners in the Kingdom to discredit the regime and 
discourage individuals and businesses, especially those affiliated with 
the Saudi military, from remaining in the Kingdom.
    Last year Saudi security forces killed or captured many of their 26 
most wanted militant extremists and discovered numerous arms caches. 
However, we believe there may be hundreds, if not thousands of 
extremists and extremist sympathizers in the Kingdom.
Pakistan
    President Musharraf continues to be a key ally in the war on 
terrorism and provides critical support against al Qaeda and Taliban 
operating in Pakistan. The economy has displayed strong growth over the 
past 2 years. Indigenous and international terrorist groups have 
pledged to assassinate Musharraf and other senior Pakistan government 
officials and remain a significant threat. Unless Musharraf is 
assassinated, Pakistan will remain stable through the year; however, 
further political and economic reform is needed to continue positive 
trends beyond that time.
    Pakistan significantly increased its military operations and 
pacification efforts in tribal areas along the Afghanistan border in 
2004. These operations affected al Qaeda, Taliban, and other threat 
groups by disrupting safe-havens and, in some cases, forcing them back 
into Afghanistan where they are vulnerable to coalition operations. 
Pakistan also secured agreements with several tribes by successfully 
balancing military action with negotiations and rewards to encourage 
cooperation and limit domestic backlash. Pakistan must maintain and 
expand these operations in order to permanently disrupt insurgent and 
terrorist activity.
    We believe international and indigenous terrorist groups continue 
to pose a high threat to senior Pakistani government officials, 
military officers and U.S. interests. The Prime Minister and a corps 
commander have been the targets of assassination attempts since last 
summer. President Musharraf remains at high risk of assassination, 
although no known attempts on his life have occurred since December 
2003. Investigations into the two December 2003 attempts revealed 
complicity among junior officers and enlisted personnel in the 
Pakistani Army and Air Force.
    Our assessment remains unchanged from last year. If Musharraf were 
assassinated or otherwise replaced, Pakistan's new leader would be less 
pro-U.S. We are concerned that extremist Islamic politicians would gain 
greater influence.

                            CONFLICT IN IRAQ

    The insurgency in Iraq has grown in size and complexity over the 
past year. Attacks numbered approximately 25 per day 1 year ago. 
Insurgents have demonstrated their ability to increase attacks around 
key events such as the Iraq Interim Government (IIG) transfer of power, 
Ramadan, and the recent election. Attacks on Iraq's election day 
reached approximately 300, almost double the previous 1 day high of 
about 160 during last year's Ramadan. Since the January 30 election, 
attacks have averaged around 60 per day and in the last 2 weeks dropped 
to approximately 50 per day.
    The pattern of attacks remains the same as last year. Approximately 
80 percent of all attacks occur in Sunni-dominated central Iraq. The 
Kurdish north and Shia south remain relatively calm. Coalition Forces 
continue to be the primary targets. Iraqi security forces and IIG 
officials are attacked to intimidate the Iraqi people and undermine 
control and legitimacy. Attacks against foreign nationals are intended 
to intimidate non-government organizations and contractors and inhibit 
reconstruction and economic recovery. Attacks against the country's 
infrastructure, especially electricity and the oil industry, are 
intended to stall economic recovery, increase popular discontent and 
further undermine support for the IIG and coalition.
    Recent polls show confidence in the IIG remains high in Shia and 
Kurdish communities and low in Sunni areas. Large majorities across all 
groups opposed attacks on Iraqi security forces and Iraqi and foreign 
civilians. Majorities of all groups placed great importance in the 
election. Sunni concern over election security likely explains the 
relatively poor showing by the Sunni electorate in comparison with the 
Shia and Kurdish groups. Confidence in Coalition Forces is low. Most 
Iraqis see them as occupiers and a major cause of the insurgency.
    We believe Sunni Arabs, dominated by Baathist and Former Regime 
Elements (FRE), comprise the core of the insurgency. Baathist/FRE and 
Sunni Arab networks are likely collaborating, providing funds and 
guidance across family, tribal, religious and peer group lines. Some 
coordination between Sunni and Shia groups is also likely.
    Militant Shia elements, including those associated with Muqtada al 
Sadr, have periodically fought the coalition. Following the latest 
round of fighting last August and September, we judge Sadr's forces are 
re-arming, re-organizing, and training. Sadr is keeping his options 
open to either participate in the political process or employ his 
forces. Shia militants will remain a significant threat to the 
political process and fractures within the Shia community are a 
concern.
    Jihadists, such as al Qaeda operative Abu Musab al Zarqawi, are 
responsible for many high-profile attacks. While Jihadist activity 
accounts for only a fraction of the overall violence, the strategic and 
symbolic nature of their attacks, combined with effective Information 
Operations, has a disproportionate impact.
    Foreign fighters are a small component of the insurgency and 
comprise a very small percentage of all detainees. Syrian, Saudi, 
Egyptian, Jordanian, and Iranian nationals make up the majority of 
foreign fighters. Fighters, arms and other supplies continue to enter 
Iraq from virtually all of its neighbors despite increased border 
security.
    Insurgent groups will continue to use violence to attempt to 
protect Sunni Arab interests and regain dominance. Subversion and 
infiltration of emerging government institutions, security and 
intelligence services will be a major problem for the new government. 
Jihadists will continue to attack in Iraq in pursuit of their long-term 
goals. Challenges to reconstruction, economic development and 
employment will continue. Keys to success remain improving security 
with an Iraqi lead, rebuilding the civil infrastructure and economy and 
creating a political process that all major ethnic and sectarian groups 
see as legitimate.

                        CONFLICT IN AFGHANISTAN

    The people of Afghanistan achieved a major milestone by electing 
Hamid Karzai president in October 2004 election. Approximately 70 
percent or just over 8 million registered Afghans disregarded scattered 
attacks by the Taliban and al Qaeda and voted. Karzai garnered 55 
percent of the vote in a field of 18 candidates. The election dealt a 
blow to insurgents and provides new momentum for reform, such as the 
demobilization of private militias and increased government 
accountability.
    President Karzai has since assembled a cabinet of reform minded and 
competent ministers who are ethnically and politically diverse. Most 
significantly, he removed Afghanistan's most powerful warlord, Marshal 
Fahim Khan, as Defense Minister.
    Despite the overwhelming voter turn-out, the election's results 
highlighted ethnic divisions. Karzai received a majority of the Pashtun 
vote, but failed to do so within any of the other ethnic groups. 
Continued ethnic divisions remain a challenge to political stability. 
National Assembly elections, scheduled for later this year, will 
provide the opportunity for non-Pashtuns to increase their 
participation in the government.
    The security situation improved over the past year. Insurgent 
attacks precipitously dropped after Afghanistan's Presidential 
election. The primary targets remain Coalition Forces and facilities in 
the southern and eastern provinces. Voter registration teams and 
polling sites were attacked in these areas, reflecting the Taliban's 
concern over legitimate elections. Similar attacks in the same 
geographic areas are expected for elections later this year, but are 
unlikely to have a significant impact.
    We believe many Taliban leaders and fighters were demoralized by 
their inability to derail the election and have seen their base of 
support among Pashtun tribes decrease. Loss of support, plus continued 
Coalition and Pakistani military operations, have prompted some to 
express an interest in abandoning the insurgency and pursuing political 
alternatives. Nevertheless some factions will likely remain committed 
to the insurgency and seek funding to continue operations.

         WEAPONS OF MASS DESTRUCTION AND MISSILE PROLIFERATION

Nuclear Weapons
    Immediately behind terrorism, nuclear proliferation remains the 
most significant threats to our Nation and international stability. We 
anticipate increases in the nuclear weapons inventories of a variety of 
countries to include China, India, Pakistan, and North Korea.
    Iran is likely continuing nuclear weapon-related endeavors in an 
effort to become the dominant regional power and deter what it 
perceives as the potential for U.S. or Israeli attacks. We judge Iran 
is devoting significant resources to its weapons of mass destruction 
(WMD) and ballistic missile programs. Unless constrained by a nuclear 
non-proliferation agreement, Tehran probably will have the ability to 
produce nuclear weapons early in the next decade.
    With declining or stagnant conventional military capabilities, we 
believe North Korea considers nuclear weapons critical to deterring the 
U.S. and the Republic of Korea (ROK). After expelling International 
Atomic Energy Agency (IAEA) personnel in 2002, North Korea reactivated 
facilities at Yongbyon and claims it extracted and weaponized plutonium 
from the 8,000 spent fuel rods. Earlier this year, Pyongyang publicly 
claimed it had manufactured nuclear weapons. Kim Jong Il may eventually 
agree to negotiate away parts of his nuclear weapon stockpile and 
program and agree to some type of inspection regime, but we judge Kim 
is not likely to surrender all of his nuclear weapon capabilities. We 
do not know under what conditions North Korea would sell nuclear 
weapons or technology.
    India and Pakistan continue to expand and modernize their nuclear 
weapon stockpiles. We remain concerned over the potential for 
extremists to gain control of Pakistani nuclear weapons. Both nations 
may develop boosted nuclear weapons, with increased yield.

Chemical and Biological Weapons
    Chemical and biological weapons pose a significant threat to our 
deployed forces, international interests and homeland. Numerous states 
have chemical and biological warfare programs. Some have produced and 
weaponized agents. While we have no intelligence suggesting these 
states are planning to transfer weapons to terrorist groups, we remain 
concerned and alert to the possibility.
    We anticipate the threat posed by biological and chemical agents 
will become more diverse and sophisticated over the next 10 years. 
Major advances in the biological sciences and information technology 
will enable biological weapon (BW) agent--both anti-human and anti-
agricultural-development. The proliferation of dual use technology 
compounds the problem. Many states will remain focused on 
``traditional'' BW or chemical weapon (CW) agent programs. Others are 
likely to develop nontraditional chemical agents or use advanced 
biotechnology to create agents that are more difficult to detect, 
easier to produce, and resistant to medical countermeasures.

Ballistic Missiles
    Moscow likely views its strategic forces, especially its nuclear 
armed missiles, as a symbol of great power status and a key deterrent. 
Nevertheless, Russia's ballistic missile force will continue to decline 
in numbers. Russia is fielding the silo-variant of the SS-27 
Intercontinental Ballistic Missile (ICBM) and is developing a road-
mobile variant and may be developing another new ICBM and new Submarine 
Launched Ballistic Missile (SLBM). It recently developed and is 
marketing a new Short Range Ballistic Missile (SRBM). Russia also is 
trying to preserve and extend the lives of Soviet-era missile systems.
    China is modernizing and expanding its ballistic missile forces to 
improve their survivability and warfighting capabilities, enhance their 
coercion and deterrence value and overcome ballistic missile defense 
systems. This effort is commensurate with its growing power and more 
assertive policies, especially with respect to Taiwan. It continues to 
develop three new solid-propellant strategic missile systems--the DF-31 
and DF-31A road-mobile ICBMs and the JL-2 SLBM. By 2015, the number of 
warheads capable of targeting the continental United States will 
increase several fold.
    China also is developing new SRBMs, Medium Range Ballistic Missile 
(MRBMs), and Intermediate Range Ballistic Missile (IRBMs). They are a 
key component of Beijing's military modernization program. Many of 
these systems will be fielded in military regions near Taiwan. In 2004, 
it added numerous SRBMs to those already existing in brigades near 
Taiwan. In addition to key Taiwanese military and civilian facilities, 
Chinese missiles will be capable of targeting U.S. and allied military 
installations in the region to either deter outside intervention in a 
Taiwan crisis or attack those installations if deterrent efforts fail.
    We judge Iran will have the technical capability to develop an ICBM 
by 2015. It is not clear whether Iran has decided to field such a 
missile. Iran continues to field 1300-km range Shahab III MRBMs capable 
of reaching Tel Aviv. Iranian officials have publicly claimed they are 
developing a new 2000-km-range variant of the Shahab III. Iranian 
engineers are also likely working to improve the accuracy of the 
country's SRBMs.
    North Korea continues to invest in ballistic missiles to defend 
itself against attack, achieve diplomatic advantage and provide hard 
currency through foreign sales. Its Taepo Dong 2 intercontinental 
ballistic missile may be ready for testing. This missile could deliver 
a nuclear warhead to parts of the United States in a two stage variant 
and target all of North America with a three stage variant. North 
Korean also is developing new SRBM and IRBM missiles that will put U.S. 
and allied forces in the region at further risk.
    Pakistan and India continue to develop new ballistic missiles, 
reflecting tension between those two countries and New Delhi's desire 
to become a greater regional power. Pakistan flight-tested its new 
solid-propellant MRBM for the first time in 2004. The Indian military 
is preparing to field several new or updated SRBMs and an MRBM. India 
is developing a new IRBM, the Agni III.
    Syria continues to improve its missile capabilities, which it 
likely considers essential compensation for conventional military 
weakness. Syria is fielding updated SRBMs to replace older and shorter-
range variants.
    Several nations are developing technologies to penetrate ballistic 
missile defenses.

Cruise Missiles
    Land-Attack Cruise Missiles (LACMs) and Lethal Unmanned Aerodynamic 
Vehicles (LUAVs) are expected to pose an increased threat to deployed 
U.S. and allied forces in various regions. These capabilities are 
already emerging in Asia.
    The numbers and capabilities of cruise missiles will increase, 
fueled by maturation of land-attack and Anti-Ship Cruise Missile (ASCM) 
programs in Europe, Russia, and China, sales of complete systems, and 
the spread of advanced dual-use technologies and materials. Countering 
today's ASCMs is a challenging problem and the difficulty in countering 
these systems will increase with the introduction of more advanced 
guidance and propulsion technologies. Several ASCMs will have a 
secondary land-attack role.
    China continues developing LACMs. We judge by 2015, it will have 
hundreds of highly accurate air- and ground-launched LACMs. China is 
developing and purchasing ASCMs capable of being launched from 
aircraft, surface ships, submarines, and land that will be more capable 
of penetrating shipboard defenses. These systems will present 
significant challenges in the event of a U.S. naval force response to a 
Taiwan crisis.
    In the next 10 years, we expect other countries to join Russia, 
China, and France as major exporters of cruise missiles. Iran and 
Pakistan, for instance, are expected to develop or import LACMs. India, 
in partnership with Russia, will begin production of the PJ-10, an 
advanced anti-ship and land attack cruise missile, this year.

Major Exporters
    Russia, China, and North Korea continue to sell WMD and missile 
technologies for revenue and diplomatic influence. The Russian 
government, or entities within Russia, continues to support missile 
programs and civil nuclear projects in China, Iran, India, and Syria. 
Some of the civil nuclear projects can have weapons applications. 
Chinese entities continue to supply key technologies to countries with 
WMD and missile programs, especially Pakistan, North Korea, and Iran, 
although China appears to be living up to its 1997 pledge to limit 
nuclear cooperation with Iran. North Korea remains the leading supplier 
of missiles and technologies. In recent years, some of the states 
developing WMD or ballistic missile capabilities have become producers 
and potential suppliers. Iran has supplied liquid-propellant missile 
technology to Syria, and has marketed its new solid-propellant SRBM.
    We also are watching non-government entities and individual 
entrepreneurs. The revelations regarding the A.Q. Khan nuclear 
proliferation network show how a complex international network of 
suppliers with the requisite expertise and access to the needed 
technology, middlemen and front companies can successfully circumvent 
international controls and support multiple nuclear weapons programs.

                          NATIONS OF INTEREST

Iran
    Iran is important to the U.S. because of its size, location, energy 
resources, military strength and antipathy to U.S. interests. It will 
continue support for terrorism, aid insurgents in Iraq, and work to 
remove the U.S. from the Middle East. It will also continue its WMD and 
ballistic missile programs. Iran's drive to acquire nuclear weapons is 
a key test of international resolve and the nuclear nonproliferation 
treaty (NPT).
    Iran's long-term goal is to see the U.S. leave Iraq and the region. 
Another Iranian goal is a weakened, decentralized, and Shia-dominated 
Iraq that is incapable of posing a threat to Iran. These goals and 
policies most likely are endorsed by senior regime figures.
    Tehran has the only military in the region that can threaten its 
neighbors and Gulf stability. Its expanding ballistic missile inventory 
presents a potential threat to states in the region. As new longer 
range MRBMs are fielded Iran will have missiles with ranges to reach 
many of our European allies. Although Iran maintains a sizable 
conventional force, it has made limited progress in modernizing its 
conventional capabilities. Air and air defense forces rely on out-of-
date U.S., Russian, and Chinese equipment. Ground forces suffer from 
personnel and equipment shortages. Ground forces equipment is also 
poorly maintained.
    We judge Iran can briefly close the Strait of Hormuz, relying on a 
layered strategy using predominately naval, air, and some ground 
forces. Last year it purchased North Korean torpedo and missile-armed 
fast attack craft and midget submarines, making marginal improvements 
to this capability.
    The Iranian Government is stable, exercising control through its 
security services. Few anti-government demonstrations occurred in 2004. 
President Khatami will leave office in June 2005 and his successor will 
almost certainly be more conservative. The political reform movement 
has lost its momentum. Pro-reform media outlets are being closed and 
leading reformists arrested.

Syria
    Longstanding Syrian policies of supporting terrorism, relying on 
WMD for strategic deterrence, and occupying Lebanon remain largely 
unchanged. Damascus is providing intelligence on al Qaeda for the war 
on terrorism. Its response to U.S. concerns on Iraq has been mixed. 
Men, material and money continue to cross the Syrian-Iraqi border 
likely with help from corrupt or sympathetic local officials.
    Damascus likely sees opportunities and risks with an unstable Iraq. 
Syria sees the problems we face in Iraq as beneficial because our 
commitments in Iraq reduce the prospects for action against Syria. 
However, Damascus is probably concerned about potential spill-over of 
Iraqi problems, especially Sunni extremism, into Syria. We see little 
evidence of active regime support for the insurgency, but Syria offers 
safe-haven to Iraqi Baathists, some of whom have ties to insurgents.
    Syria continues to support Lebanese Hizballah and several 
rejectionist Palestinian groups, which Damascus argues are legitimate 
resistance groups.
    Syria is making minor improvements to its conventional forces. It 
is buying modern anti-tank guided missiles and overhauling some 
aircraft, but cannot afford major weapon systems acquisitions.
    President Bashar al-Asad is Syria's primary decisionmaker. Since 
becoming President in 2000 upon the death of his father, Asad has 
gradually replaced long-serving officials. Potential domestic 
opposition to his rule--such as the Muslim Brotherhood--is weak and 
disorganized. We judge the Syrian regime is currently stable, but 
internal or external crises could rapidly threaten it.

China
    We do not expect Communist Party Secretary and President Hu 
Jintao's succession to chairman of the Central Military Command (CMC) 
to significantly alter Beijing's strategic priorities or its approach 
to military modernization. The commanders of the People's Liberation 
Army (PLA) Air Force, Navy, and Second Artillery (Strategic Rocket 
Forces) joined the CMC in September, demonstrating an institutional 
change to make China's military more ``joint.'' The CMC traditionally 
was dominated by generals from PLA ground forces.
    China remains keenly interested in coalition military operations in 
Afghanistan and Iraq and is using lessons from those operations to 
guide PLA modernization and strategy. We believe several years will be 
needed before these lessons are incorporated into the Armed Forces. We 
judge Beijing remains concerned over U.S. presence in Iraq, 
Afghanistan, and Central Asia. Beijing may also think it has an 
opportunity to improve diplomatic and economic relations, to include 
access to energy resources, with other countries distrustful or 
resentful of U.S. policy.
    China continues to develop or import modern weapons. Their 
acquisition priorities appear unchanged from my testimony last year. 
Priorities include submarines, surface combatants, air defense, 
ballistic and anti-ship cruise missiles and modern fighters. China 
recently launched a new conventional submarine and acquired its first 
squadron of modern Su-30/Flanker aircraft for the naval air forces from 
Russia. The PLA must overcome significant integration challenges to 
turn these new, advanced and disparate weapon systems into improved 
capabilities. Beijing also faces technical and operational difficulties 
in numerous areas. The PLA continues with its plan to cut approximately 
200,000 soldiers from the Army to free resources for further 
modernization, an initiative it began in 2004.
    Beijing was likely heartened by President Chen Shui-bian 
coalition's failure to achieve a majority in the recent Legislative 
Yuan elections. We believe China has adopted a more activist strategy 
to deter Taiwan moves toward independence that will stress diplomatic 
and economic instruments over military pressure. We believe China's 
leaders prefer to avoid military coercion, at least through the 2008 
Olympics, but would initiate military action if it felt that course of 
action was necessary to prevent Taiwan independence.
    Beijing remains committed to improving its forces across from 
Taiwan. In 2004, it added numerous SRBMs to those already existing in 
brigades near Taiwan. It is improving its air, naval, and ground 
capabilities necessary to coerce Taiwan unification with the mainland 
and deter U.S. intervention. Last fall, for instance, a Chinese nuclear 
submarine conducted a deployment that took it far into the western 
Pacific Ocean, including an incursion into Japanese waters.

North Korea
    After more than a decade of declining or stagnant economic growth, 
Pyongyang's military capability has significantly degraded. The North's 
declining capabilities are even more pronounced when viewed in light of 
the significant improvements over the same period of the ROK military 
and the U.S.-ROK Combined Forces Command (CFC). Nevertheless, the North 
maintains a large conventional force of over 1 million soldiers, the 
majority of which we believe are deployed south of Pyongyang.
    North Korea continues to prioritize the military at the expense of 
its economy. We judge this ``Military First Policy'' has several 
purposes. It serves to deter U.S.-ROK aggression. Nationwide 
conscription is a critical tool for the regime to socialize its 
citizens to maintain the Kim family in power. The large military allows 
Pyongyang to use threats and bravado in order to limit U.S.-ROK policy 
options. Suggestions of sanctions, or military pressure by the U.S. or 
ROK are countered by the North with threats that such actions are ``an 
act of war'' or that it could ``turn Seoul into a sea of fire.'' 
Inertia, leadership perceptions that military power equals national 
power and the inability for the regime to change without threatening 
its leadership also explains the continuing large military commitment.
    The North Korean People's Army remains capable of attacking South 
Korea with artillery and missile forces with limited warning. Such a 
provocative act, absent an immediate threat, is highly unlikely, 
counter to Pyongyang's political and economic objectives and would 
prompt a South Korean-CFC response it could not effectively oppose.
    Internally, the regime in Pyongyang appears stable. Tight control 
over the population is maintained by a uniquely thorough 
indoctrination, pervasive security services and party organizations, 
and a loyal military.

Russia
    Despite an improving economy, Russia continues to face endemic 
challenges related to its post-Soviet military decline. Seeking to 
portray itself as a great power, Moscow has made some improvements to 
its Armed Forces, but has not addressed difficult domestic problems 
that will limit the scale and scope of military recovery.
    Russian conventional forces have improved from their mid-1990s low 
point. Moscow nonetheless faces challenges if it is to move beyond 
these limited improvements. Significant procurement has been postponed 
until after 2010 and the Kremlin is not spending enough to modernize 
Russia's defense industrial base. Russia also faces increasingly 
negative demographic trends and military quality-of-life issues that 
will create military manning problems.
    Moscow has been able to boost its defense spending in line with its 
recovering economy. Russia's Gross National Product averaged 6.7 
percent growth over the past 5 years, predominately from increased 
energy prices and consumer demand. Defense should continue to receive 
modest real increases in funding, unless Russia suffers an economic 
setback.
    Russia continues vigorous efforts to increase its sales of weapons 
and military technology. Russia's annual arms exports average several 
billion dollars. China and India account for the majority of Russia's 
sales, with both countries buying advanced conventional weapons, 
production licenses, weapon components and technical assistance to 
enhance their research and development programs. Efforts to increase 
its customer base last year resulted in increased sales to Southeast 
Asia. Russian sales are expected to remain several billion dollars 
annually for the next few years.
    Russia's struggle with the Chechen insurgency continues with no end 
in sight. Chechen terrorists seized a North Ossetian primary school 
where over 330 people were killed and two Russian civilian airliners 
were bombed in flight last summer. Rebels continue targeting Russians 
in Chechnya and Chechen officials cooperating with Moscow. While Moscow 
is employing more pro-Russian Chechen security forces against the 
insurgents, the war taxes Russian ground forces. Although the Chechnya 
situation remains a minor issue to the average Russian, concerns over 
spreading violence prompted new government security initiatives and 
offered cover for imposition of authoritarian political measures.
    Russian leaders continue to characterize Operation Iraqi Freedom 
and the North Atlantic Treaty Organization (NATO) enlargement as 
mistakes. They express concerns that U.S. operations in Iraq are 
creating instability and facilitating terrorism. Russian leaders want 
others to view the Chechen conflict as a struggle with international 
terrorism and accuse those who maintain contact with exiled Chechen 
leaders or criticize Moscow's policies toward Chechnya as pursuing a 
double standard. Russian officials are wary of potential U.S. and NATO 
force deployments near Russia or in the former Soviet states. Concern 
that Ukraine under a President Yushchenko would draw closer to NATO and 
the European Union (EU) was a factor motivating Russia's involvement in 
Ukraine's presidential election.

                            CLOSING THOUGHTS

    This year my testimony focuses on what I believe to be the most 
immediate threats to our Nation and challenges to our interests. The 
threat from terrorism has not abated. While our strategic intelligence 
on terrorist groups is generally good, information on specific plots is 
vague, dated or sporadic. We can and must do better. Improved 
collection and analysis capabilities can make a significant difference. 
We are increasing our ability to provide that timely, relevant 
intelligence.
    The Intelligence Community as a whole needs to improve its 
collection and focus more analytic resources on pressures in the 
Islamic world so that we can better understand the drivers for 
extremism. We also need greater collection and more analytic resources 
devoted to certain key Islamic countries. We have taken steps to 
improve our collection and analysis, hiring more individuals with 
Arabic and Farsi language skills. Nevertheless, more needs to be done 
across the Intelligence Community, particularly in the area of 
meaningful, penetrating collection and making the content of that 
collection available to all who need it.
    Proliferation of WMD and missiles is my second priority. Collection 
must be improved. Additionally, improving our analytic techniques, 
adoption of true ``all-source'' analysis approaches and greater 
information sharing will help us avoid problems similar to those in our 
pre-war analysis of Iraq's WMD program.
    We also must not let our focus on numerous nations of interest 
wane. Traditional military intelligence disciplines must remain robust 
if we are to provide our national security policymakers, defense 
planners, and warfighters the information they need to successfully 
execute their missions. We need improved collection so that we are 
stealing our true secrets. There are significant gaps in our 
understanding of several nations' leaderships' plans and intentions. 
Additionally, more collection and analysis is needed to provide 
adequate warning of attack and a more complete understanding of the 
military capability, doctrine and war plans of numerous countries. We 
are working to better target collection against these hard targets.
    As I mentioned, the threats and challenges I briefed today are the 
most significant and immediate. They are certainly not the only ones. 
In previous years, I have spoken about the security situation in 
Africa, Latin America, and South and Southeast Asia. I also addressed 
my concerns on information operations, international crime, problems 
associated with globalization, uneven economic development, and 
ungoverned states. Those issues remain significant concerns and the 
focus of collection and analytic resources for defense intelligence. We 
will be requesting additional funding and billets to ensure we retain 
coverage and reporting on global coverage. We are reallocating our 
analytic capabilities, implementing the ``master, measure, and 
monitor'' concept in the Defense Intelligence Analysis Program to 
better address many of these threats and disturbing trends.
    Let me conclude by making two points. First, the Defense 
Intelligence Agency is focused on transforming its capabilities in all 
of its mission areas to operate in a true ``all-source'' environment. 
We are committed to incorporating all relevant information into our 
analyses, integrating analysts with collectors and precisely targeting 
our analytic and collection capabilities against complex threats and 
tough issues. More opportunity for ``discovery,'' greater penetration 
of hard targets and higher confidence in our judgments are our goals. 
Second, we are aggressively reengineering our information management 
approach and architecture. We are focused on harvesting non-traditional 
sources of data and positioning ourselves to exploit information from 
new and future sources. We are convinced commercial sector ``content 
management practices'' and data standards hold the key to upgrading our 
information management capability and providing the ``smart network'' 
we need. Much more work is required in the area if we are to realize 
our potential and fundamentally improve our capabilities. These efforts 
follow the Director of Central Intelligence and the Secretary of 
Defense guidance and reflect the letter and spirit of the intelligence 
reform act. Thank you--I look forward to your questions.

    Chairman Warner. Thank you very much, Admiral, for a very 
fine statement.
    We will now go to a 6-minute round of questions, and I will 
lead off with Director Goss. Admiral Jacoby summarized briefly 
what he perceives as some diminution in the number of insurgent 
attacks in Iraq on our Coalition Forces and coincides with two 
events, the historic elections followed by yesterday's 
convening of the 275-member legislative body. Can you expand on 
your views with regard to the pace at which this new government 
is coming into being, and whether or not this new government 
does reflect a change of thinking throughout the Iraqi 
population which could result in increased enlistments in the 
army and other security forces such that we can continue a 
buildup of their security system with the expectation when it 
reaches a certain crossover point the Coalition Forces can look 
at the possibility of reducing their own structure?
    I had hoped that this government would move along at a bit 
faster pace. That is just my own personal opinion. 
Nevertheless, the events of yesterday may portend a pickup in 
their pace of putting this government together, because you 
must remember it is an interim government. The permanent 
government does not come into being until December. I think all 
Americans are concerned about the continuing loss of life and 
limb of our forces and other Coalition Forces as this somewhat 
gradual process of evolution of a new government takes place.
    So I would be quite interested, as the committee would be, 
in your views regarding this new government.
    Mr. Goss. Mr. Chairman, thank you very much.
    First of all, I think that I agree with everything Admiral 
Jacoby said and would be very happy to try and expand on it a 
little bit, understanding that my mandate is not to make 
policy. I have been reminded of that occasionally. But I do 
think it is fair to go forward and talk about how we are doing 
there because there are intelligence aspects to that that are 
very important relative to the National security.
    Of course I am optimistic, because I am looking back at 
what we started with and where we are now, and I think that we 
all should be extremely proud of what has been accomplished. I 
do believe that we are going to have to be a little patient in 
the process of letting the Iraqis figure out their own future, 
and I think that, even though I may have hopes for a pace that 
is a little quicker or a little different, it is up to the 
Iraqis now. We have given them the opportunity and they seem to 
be seizing it very well.
    Very clearly, there are reasons, historical, cultural, 
political, and evolutionary, in Iraq why they had not achieved 
an opportunity that they have today sooner in their history. It 
is a very complicated society, and I think all of the aspects 
of the society need to be provided for and accommodated in some 
way or another to have a full government with proper 
representation. I think that is going to take some time.
    I do believe, however, that the process is working well as 
we go into this next transitional phase. Very clearly they 
should be able to set up the government under the formula that 
they have to follow. They have an excellent map of what they 
are going to do. They have a time line on that map.
    My view is there is a change of thinking in the country. 
There is a huge wellspring of good feeling that this is the way 
to go and that they are happy to have that opportunity. That is 
manifest on the streets there. It is clear in the courage that 
the people displayed when they went out and voted, and I would 
say that there was as much pride there as there was in our 
country that voting day that we helped give them that 
opportunity. I know darn well they risked a lot to go out.
    Nevertheless, having said all of that, there is no 
misjudging the fact that there is still willful intimidation, 
primarily not aimed at our forces as much as innocent people, 
and the new Iraqi security and police forces. This is of course 
intentional by the terrorists. The longer they can create 
instability, the more they think they can defeat the people's 
expressions of democracy.
    Of course they are mistaken. We are doing very well in 
assisting the standup of the troops and helping with the 
appropriate kinds of organizations necessary to provide for the 
security in that country. But in the end, that will be an Iraqi 
decision.
    I am as optimistic and patient and watching closely. We 
will continue to help where we can and where our help is no 
longer needed, we will speed them on their way.
    Chairman Warner. That is very encouraging.
    The measure of success that we can anticipate as each month 
goes along is largely dependent on the level of cooperation of 
the Iraqi people and their enthusiasm to move towards the goals 
of achieving freedom and establishing a security force which 
will enable them to pursue those goals. Collection of 
intelligence is essential during this process.
    Mr. Goss. Yes, sir.
    Chairman Warner. Your agency has had a very distinguished 
record of achievements in that region. You have a considerable 
number of individuals working. Can you, in open session, to the 
extent you can, express your views as to the level of 
cooperation that may be forthcoming now from the Iraqi people 
to enhance intelligence-gathering?
    Mr. Goss. Yes, sir. I can tell you that we have had a very 
important role and I am very proud of the men and women of the 
Intelligence Community and what they have done to help enable 
the situation in Iraq today. Obviously, the missions of force 
protection are very much on our mind. The missions of our 
traditional business of understanding what is going on out and 
about in the community is part of it, and then that extra 
special area of expertise that we have been asked to help in in 
terms of helping the Iraqi people stand up an appropriate, 
properly safeguarded, properly overseen, intelligence service 
that can serve the country and serve the people rather than 
work against the people, which is so often the case in the type 
of regimes that used to be there.
    I think that we have done well. I think that once the 
political situation settles down, we will be continuing to take 
advantage of the opportunities and the good will we have built 
up there. Frankly I am very optimistic about our capabilities 
to help them get on their way and that we have what we need to 
protect our own interests as well.
    Chairman Warner. There have been some extraordinary 
developments, as we all know, with regard to Syria. We have 
seen a measure of courage by the people of Syria, and that is 
in, viewing these steps by the people of Lebanon as a manifest 
of courage to take over their own government. Now, Syria has 
been a haven for many of the troublemakers flowing across the 
border from Iraq into Syria and from Syria into Iraq. To what 
extent have the recent events in Lebanon and Syria's 
recognition, I hope, that they will withdraw affected that 
cross-border troublemaking.
    Mr. Goss. It is difficult for me to make a firm prediction, 
Mr. Chairman. There are some aspects of that I would prefer to 
answer in closed session. I will tell you this, that, despite a 
lot of very well-intentioned and persistent efforts to try and 
get more cooperation from the Syrian regime, we have not had 
the success I wish I could report.
    How events will affect those efforts to achieve further 
cooperation, remains to be seen in the future. Obviously we are 
well aware of the problems that you are suggesting, what it has 
meant in Iraq, what that has meant for the people of Syria, and 
what it has meant in Lebanon. There are things afoot, and 
changes happening as we speak. It is hard to know where they 
will come down. In the end I cannot believe that we are not 
going to be better off than where we have been.
    Chairman Warner. Quickly turning to Iran, to what extent 
are they trying to influence events in Iraq, be it in the 
elections, the formation of the government, and the like? 
Overall, what continuing threat does Iran pose to that region, 
particularly in the complexity of its weapons programs?
    Mr. Goss. Mr. Chairman, again in open session I want to be 
a little reserved. But I think it is fair to say that just 
about everybody who has been watching understands that Iran has 
been meddling in the affairs of Iraq and in the interests of 
Iran. I would also say that how that is going to work out in 
the future is a matter of some concern and will be attended to.
    I would also say that Iran in my view is one of the few 
very obvious sponsors of state terrorism. I would say Hezbollah 
is a funded terrorist organization by the sovereign state of 
Iran and they ought to stop it.
    I also would say that their lack of candor and their lack 
of transparency on the subject of their nuclear program causes 
people to have reasonable doubt about what is their actual 
intent and what actual capabilities they have. That is 
extremely worrisome from the view point of proliferation. I 
believe there are good efforts going forward, proper diplomatic 
efforts, to achieve more transparency and more verifiability. 
On the other hand, I am not prepared to accept that we have 
gotten anywhere near the level we need to be in terms of 
assurance about what is going on and where it is going.
    Chairman Warner. I thank you very much.
    Senator Levin.
    Senator Levin. Thank you, Mr. Chairman.
    Relative to that issue first, is there an assessment by the 
Intelligence Community as to whether or not there are 
circumstances under which Iran would give up its ability to 
produce nuclear weapons?
    Mr. Goss. Senator, I believe that any such assessments the 
Intelligence Community would have would be classified. But I 
would say that the negotiations that are ongoing now clearly 
point the way to what the problems are. If you read in the 
newspapers, what is going on with the European 3 and the 
negotiations, I think you get a pretty good idea that the 
Iranians do not seem to want to be very open and candid. They 
want to say what they are doing, but they do not want to prove 
what they are doing.
    Senator Levin. Putting aside what might be in the 
assessment, is there an assessment as to whether or not there 
are circumstances under which Iran would give up its ambitions? 
Do we have such an assessment? I am not asking what the 
contents are, but is there one?
    Mr. Goss. I would say that we have a great deal of 
assessments.
    Senator Levin. On that subject?
    Mr. Goss. On the subject of Iran and nuclear matters.
    Senator Levin. You indicated you did not want to speak in 
public session about Iranian efforts to have influence in Iraq. 
My question perhaps is a little different. You may not be able 
to answer it. Can you tell us whether or not the Iraqi Shia 
leadership has, particularly those that are seeking to attain 
powerful positions in the assembly, have strong connections and 
loyalty to Iran? Can you tell us?
    Mr. Goss. Senator, again, I am well aware that the Iraqis 
are in the middle of forming a government and that anything I 
said could possibly affect that. So I want to be very careful.
    Senator Levin. Thank you.
    Mr. Goss. I would say, however, that there are probably 
some Shia who are closer to Iran than others. But I do not 
think that you can just put a single definition down and come 
to a comprehensive conclusion. You would have to take it one by 
one.
    Senator Levin. Both Director Goss and Admiral Jacoby. Does 
the Intelligence Community have an assessment as to the size of 
the insurgency in Iraq, either a specific or a range of 
numbers? Also, do you know the approximate percentage of 
insurgents who are Iraqis and who are foreigners?
    Mr. Goss. No, sir, I do not think that we have an 
assessment that gives exact or even ranges of numbers at this 
point.
    Senator Levin. Admiral?
    Admiral Jacoby. Sir, we are obviously in a situation where 
we are supporting General Abizaid and General Casey as part of 
their effort, and so the range of numbers that they have 
cited--I believe General Abizaid less than 20,000--is the range 
that we are working with.
    Senator Levin. Less than 20,000, does that mean from 15 to 
20, 10 to 20, 5 to 20, or 1 to 20? Less than 20 is not a range.
    Admiral Jacoby. I understand. It is in the 12 to 20, 15 to 
20 range.
    Senator Levin. Are most of those folks Iraqis or from 
outside of Iraq?
    Admiral Jacoby. Sir, our insights there are basically in 
terms of the people who have been detained, and a very small 
percentage, in the single digit percentage, are non-Iraqis.
    Senator Levin. Thank you.
    Director Goss, is it your assessment that Mr. Abbas will 
take on the Palestinian groups that engage in terrorism? Is 
that his intention?
    Mr. Goss. I think, Senator, based on the open evidence that 
we have seen, that he is making very strong efforts to get the 
problems in the Authority under control.
    Senator Levin. All right. Switching quickly to North Korea. 
Back in 2002 there was an assessment that said, ``We assess 
that North Korea has produced enough plutonium for at least one 
and possibly two nuclear weapons.'' That was the open January 
2002 assessment. It is now 3 years later. We are told they have 
a greater amount of plutonium.
    Do you have an unclassified estimate as to how much 
plutonium is in their hands? It was 1 and possibly 2-3 years 
ago. Can you give us the current assessment?
    Mr. Goss. Senator, that is a subject for closed session. I 
can certainly give you a range on the estimate, the various 
views on nuclear weapons that we think, as to plutonium versus 
uranium and those kinds of details----
    Senator Levin. In open session?
    Admiral Jacoby. I am sorry, no.
    Senator Levin. You cannot, okay.
    Do you have an assessment as to whether or not North Korea 
would be willing under certain circumstances, including a 
guarantee by the United States not to forcibly attempt to 
change North Korea's government, to give up its nuclear 
programs? Do you have an assessment as to whether they would be 
willing, under certain circumstances, to give up its nuclear 
program?
    Mr. Goss. Sir, I could not discuss any assessments we have 
on something like that, for two reasons. One, it would be 
classified; and two, I would not even want to begin to 
characterize the work we do when we are talking about the very 
delicate diplomatic efforts that are being made now.
    Senator Levin. Do you believe that North Korea has the 
ability to arm a missile with a nuclear device?
    Mr. Goss. I would like to leave that for closed session as 
well.
    Senator Levin. All right.
    Is it possible in your judgment that North Korea actually 
fears the possibility of a U.S. military attack and is trying 
to maximize a deterrent effect to prevent such an attack by 
convincing us that they have nuclear weapons?
    Mr. Goss. If you are asking my opinion, do I think they 
fear?
    Senator Levin. No. Is it possible that they fear an attack?
    Mr. Goss. Yes, I think that is certainly possible, in my 
view.
    Senator Levin. Thank you.
    There has been a lot of public press coverage over the 
issues of detainee abuses and rendition. I am wondering whether 
or not you have a policy relative to rendition and if so you 
could tell us what that policy is.
    Mr. Goss. The issue, which is widely reported, of so-called 
renditions in the press gets into areas of sources and methods, 
which I would prefer to answer in closed session as well.
    Senator Levin. When you receive complaints from, evidence 
of torture by people against whom rendition has been used, do 
you follow up? Since it is not our policy--the President has 
said publicly it is not our policy--to engage in rendition of 
people for purposes of torture, do we follow up with the 
countries that have represented to us that they would not 
torture individuals we sent to those countries? Do you know 
whether we have ever followed up with those countries with that 
evidence?
    Mr. Goss. If you are asking about the Intelligence 
Community, again this is a kind of question that is complicated 
and would need to be answered in closed session. But I can 
assure you that I know of no instances where the Intelligence 
Community is outside the law on this, where they have complied. 
As I have said publicly before and I know for a fact, that 
torture is not productive. That is not professional 
interrogation. We do not do torture.
    I can also tell you that it is my understanding and my 
experience that any serious allegations--and I am not just 
talking about some press speculation or something--that have 
ever been brought to the attention of the proper authorities 
have been referred properly for investigation.
    Senator Levin. My last question has to do with the 
Inspector General's (IG) report. You have an IG who is 
reviewing detainee abuses and allegations thereof by members of 
the Intelligence Community. How much longer are we going to 
have to wait for the IG's report on potential detainee abuse by 
members of the Intelligence Community?
    Mr. Goss. Senator, as I understand the IG is the proper 
place to refer any allegations that come along, and I do know 
that he has such allegations and is proceeding on them. I do 
also know that he has recently briefed the appropriate 
oversight committee, which I think you are also a member of, 
and I am told that there was a fulsome briefing, on aspects 
that you are referring to in your questions, and that he is in 
a better position than I am to tell you the status of those 
investigations.
    But I know of no matters that have not been referred to 
him.
    Senator Levin. But you do not have an estimate as to when 
he will finish his investigation?
    Mr. Goss. No, sir. He is an independent person, in our 
organization.
    Senator Levin. Thanks.
    Chairman Warner. I would have to observe here that in the 
course of this tragic chapter of the prisoner abuse the 
Department of Defense (DOD) and specifically the Department of 
the Army has completed about six different investigations. I 
join my colleague in urging that you make assessment of the 
time within which this report could be completed. Perhaps we 
could do that in closed session. It is certainly in the domain 
of the Intelligence Committee.
    Senator McCain.
    Senator McCain. Thank you, Mr. Chairman, and I thank the 
witnesses.
    Director Goss, just to follow up on Senator Levin's 
questions, the thing that bothers a lot of us is that we do not 
seem to have a clear policy on treatment of prisoners which 
could then be translated into specific instructions for those 
who are in charge of interrogations, recognizing that it is 
complicated by the fact that we now have two different kinds of 
prisoners. One is those who are eligible for the Geneva 
Conventions for the Treatment of Prisoners of War and others 
are outright terrorists, who have none of those protections but 
still have protections by international treaty such as the 
torture treaty and others.
    I wonder how you feel about that view, because when I look 
at these cases of abuse I think that perhaps there was not 
sufficient training, but maybe more importantly or as 
importantly, there was not specific policy guidelines issued 
for those people who are the ones who are interfacing with the 
prisoners. Do you have a view on that?
    Mr. Goss. Yes, sir, I do. I would like to make a 
distinction if I could. We started talking about transfers of 
people, alleged renditions and so forth, and then we switched 
to prisoner treatment. I want to make a distinction between the 
two and answer both questions, more candidly obviously in 
closed session.
    I believe that there is policy and I believe that it is 
very well understood at this point. I am not speaking for the 
military side and I am not going to go to all those 
investigations and reviews and so forth. I am going to go to 
what I understand are the Intelligence Community's orders on 
how we use the tools that have been given to us lawfully and 
how we stay within bounds.
    As I say, I believe that if you go back and you take a look 
at transfers helping other countries deal with terrorists, you 
will find this is a process that has been going on for more 
than 20 years. We actually got in the terrorist business back 
in the early 1980s, starting with Beirut.
    I think there have always been procedures, processes, and 
policies in place to deal with these and they have been 
understood.
    Senator McCain. Well, some of those policies at one time 
were to have the prisoner feel that they were drowning.
    Mr. Goss. You are getting into again an area of what I will 
call professional interrogation techniques and I would like 
to----
    Senator McCain. That is the area that I am concerned about, 
because I am not sure that the interrogators are fully aware of 
specific policies as to what they can and cannot do when 
interrogating a prisoner. That is my point.
    Mr. Goss. Thank you, sir. That is a clarification. If you 
are going to talk about the techniques as well and add that 
dimension to it and not just how people are held, then I would 
take the statement even further, to say that there has been in 
that case some uncertainty. There has been an attempt to 
determine what those policies are. I think that uncertainty is 
largely resolved, and in the mean time I can assure you that 
pending any uncertainties that anything that would be happening 
would be erring on the side of caution.
    Senator McCain. Thank you.
    Switching gears, again the greatest threat we still face is 
a terrorist attack within the United States of America, right?
    Mr. Goss. Yes, sir.
    Senator McCain. We also know that the only way we are going 
to eliminate the terrorist threat is to go where it is bred, 
right?
    Mr. Goss. I believe it is the best way.
    Senator McCain. We have some reason for hope, given some of 
the recent events in the Middle East towards democracy. I am 
worried about our border. We now have hundreds of thousands, if 
not millions, of people who are crossing illegally every year. 
We are now seeing a larger number of people crossing our 
southern border who are from countries of interest, as opposed 
to just Latin American.
    I am also told they found some papers that are written in 
Arabic, and it is a matter of conjecture as to if anyone has 
crossed our border. But is it not likely that someone who 
wanted to do something bad inside the United States would come 
across our border? How serious do you think this problem is 
from a national security standpoint?
    Mr. Goss. I think that is a very serious problem and I 
think it is not just our southern border. It is any border.
    Senator McCain. Right.
    Mr. Goss. It is part of the debate we have to have in our 
country about how a free, democratic, open society goes about 
the business of protecting itself from people who want to do us 
damage, and who are not willing to play by any rules of 
society. It is a very difficult question.
    Senator McCain. Do you think we should increase our efforts 
for overall immigration reform as a way of trying to address 
this issue?
    Mr. Goss. Sir, I would have to leave that to you. I took 
that hat off when I took this job. I believe my job is to get 
as much information as possible to inform you to make the right 
decisions on the question you have just asked me.
    Senator McCain. To assess threats.
    Mr. Goss. Yes, sir, of course.
    Senator McCain. I am asking for your assessment of how 
serious a threat it is.
    Mr. Goss. Serious.
    Senator McCain. Then I would like to just talk a little bit 
more about our own hemisphere. As we worry understandably about 
the Middle East and other parts of the world, we see Mr. Chavez 
in Venezuela getting closer and closer to Castro. We see 
governments in a state of instability in places like Bolivia, 
Ecuador, and Peru. Central America has regressed in some ways 
as far as corruption and other problems are concerned. We now 
see that Mr. Noriega is back as a viable candidate for 
president of Nicaragua.
    Would you talk a little bit about our own hemisphere and 
the problems that failed states would pose and how serious you 
think in particular President Chavez' behavior is?
    Mr. Goss. Yes, sir. If you heard my opening remarks, I did 
refer, somewhat atypically, in my warning spots to Latin 
America. Usually we do not do that. I did that specifically for 
a reason, because I agree with everything you have just said. I 
think we need to be much more focused on a global basis to what 
is going on, and I think we ought to start in our back yard.
    Certainly that is not where most of the terrorists are 
being bred and doing their plotting, that is true. But a 
destabilization or a backslide away from the democratic 
principles and ideals, the progress that has been made in the 
last 50 or 60 years south of the border, would not be helpful 
to our interests and would probably be threatening to our 
security in the long run.
    There are certain players that are very clearly causing 
mischief for us. You have pointed out that President Chavez has 
said some things that are very hard to reconcile with friendly 
interests toward the United States, and has associated in ways 
with Fidel Castro that would again indicate that he is not 
taking actions that are friendly to the United States or its 
interests.
    I am aware that there are some concerns about the matters 
in Central America. You have read about potential weapons left 
over from other days in Nicaragua coming back to bear, and some 
of the same players coming back. I have pointed out that we 
have some presidential elections coming where we could see some 
trouble for the stabilized democratic process in Latin America.
    I think it behooves us to pay attention to that and to try 
and provide you the best possible information we can on what is 
going on, so that the policymakers can form the policies and 
the programs to deal with those issues. We are aware of that 
and that is why I mentioned it. We are trying to cover that 
area for you.
    Senator McCain. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Warner. Thank you, Senator McCain.
    Senator Dayton.
    Senator Dayton. Thank you, Mr. Chairman. Mr. Chairman, I 
just would note, in following to the hearing that you had last 
week on the Church report, that the New York Times yesterday 
reported that ``at least 26 prisoners have died in American 
custody in Iraq and Afghanistan since 2002, in what Army and 
Navy investigators have concluded or suspect were acts of 
criminal homicide, according to military officials. The Church 
report, sent to Congress last week, cited only six prisoner 
deaths caused by abuse.''
    I note, because I read that report, that the qualifications 
that were put on that report were in terms of time parameters 
and the like. But it is still--and I commend you, Mr. Chairman, 
for your persistent effort to try to get to the full facts 
involved in these unfortunate incidents. I believe what was 
supposed to be the definitive report provided by the Pentagon 
last week cited only six deaths and a week later a news report 
cites Army and Navy officials pegging the figure at 26. I find 
this distressing and it underscores again the difficulty in 
getting a full disclosure of these incidents.
    Another report 2 months ago in the Washington Post cited 
Pentagon officials regarding intelligence, notification of 
Congress on intelligence activities, and ``asserted that 
Defense Intelligence missions are subject to fewer legal 
constraints than Secretary Rumsfeld's predecessors believed. 
That assertion involves new interpretations of title 10 of the 
U.S. Code, which governs the armed services, and title 50, 
which governs, among other things, foreign intelligence.''
    I wonder if I could ask each of you in turn, if you are 
aware of any reinterpretations of existing law that have 
resulted in fewer constraints or notification of Congress for 
intelligence activities?
    Mr. Goss. Senator, I take very seriously our 
responsibilities to report to our oversight committees and I am 
not aware that we have not been anything except fully 
forthright and spent hours in numbers of briefings trying to 
inform the members of the committee and respond to any 
questions they have.
    I know of no impedance to that process whatsoever. I think 
it is working well.
    Senator Dayton. It probably seems like more hours when you 
are on that side of the dais than this one.
    Mr. Goss. Well, it is part of the job and it is a necessary 
part of the job, and it is one we want to honor faithfully and 
fully. Our problem, of course, in dealing with some subjects in 
the intelligence world is that we have to do it in closed 
session and we have to follow those rules. I have a statutory 
obligation to protect sources and methods. I take it seriously.
    Senator Dayton. Admiral?
    Admiral Jacoby. Senator, there has been no 
reinterpretations that affected the Defense Intelligence Agency 
(DIA), either in our notification responsibilities or our 
guidance and coordination mechanisms between us and the CIA.
    Senator Dayton. Thank you.
    The 9/11 Commission quotes Secretary Rumsfeld. In October 
2003, reflecting on progress after 2 years of waging the global 
war on terrorism, Defense Secretary Rumsfeld asked his 
advisers: ``Are we capturing, killing, or deterring and 
dissuading more terrorists every day than the madrasas and the 
radical clerics are recruiting, training, and deploying against 
us? Does the U.S. need to fashion a broad, integrated plan to 
stop the next generation of terrorists? The U.S. is putting 
relatively little effort into a long-range plan, but we are 
putting a great deal of effort into trying to stop terrorists. 
The cost-benefit ratio is against us. Our cost is billions 
against the terrorists' costs of millions.''
    The commission goes on to say: ``Those are the right 
questions.''
    I wonder if either of you have answers regarding that need 
for a long-range plan, whether we have one in place, and 
whether you think we are starting to make progress in that 
equation of winning the hearts and minds and bodies?
    Mr. Goss. Yes, sir, I will answer that question. Positively 
I think we are, and I think you are seeing the results in 
places like Afghanistan and Iraq, where they are having 
elections, and in Palestine, where things are happening. I feel 
that there is a new wave going through Islam and they are at a 
junction point. The people who are espousing the radical way 
are having a harder go of it today because we have stepped up 
and tried to go to the question of what actually is being 
taught in those madrasas. Is Wihabism really what should be in 
the textbooks in Saudi Arabia?
    I believe those efforts are out there. Of course, they are 
more than just intelligence and they are more than just 
military. They get into the diplomatic and the whole cultural 
and society energies, and we have many agencies in this 
government that I think are committed to that proposition. I 
think we well understand it now. I am not sure we did some 
years ago, but I think we are way ahead on that, and we are 
doing good things.
    As for terrorism, I think that you need to always take into 
the equation there will be a need for law enforcement, if I can 
use the term. Just like we tolerate a certain amount of crime, 
we have law enforcement to deal with that in society. Even 
though we wish we had none, we tolerate some. I am afraid it is 
going to be that way with terrorism. But we have to get it to 
the tolerable level first and we are a long way from that.
    So I think we are engaged globally on all the fronts we 
need to be, but not yet to the degree we need to be.
    Senator Dayton. Thank you.
    Admiral.
    Admiral Jacoby. Senator Dayton, we spent quite a bit of 
time in my testimony talking about those underlying factors. I 
believe your question properly characterizes them. It also 
points to the fact that this is going to have to be a 
multifaceted set of solutions and is going to involve a lot of 
players. It is not an issue only for the United States.
    Senator Dayton. Thank you.
    Director Goss, I was intrigued by your suggestion about a 
university.
    Mr. Goss. Thank you.
    Senator Dayton. As the parent of two sons who just went 
through the teenage years, I think the teenage years are a 
natural training ground for covert activity in my experience.
    I wonder if you could fill that in a little bit more. Would 
you see this as something like one of the service academies or 
something that would be more dispersed? Where in Minnesota 
would you like to locate such an entity? [Laughter.]
    Mr. Goss. Thank you, sir. I appreciate your taking up my 
idea and I would be happy to come out to Minnesota and look for 
appropriate places.
    I was thinking more along the lines of the National Defense 
University when I started this, a place where people can come 
together. We started looking at what our needs were across the 
board in the community and we have a need to share some common 
things in the Intelligence Community. We have wonderful esprit 
in our individual agencies and real purpose and focus of 
mission, which is a great thing. But it is not as good a thing 
as it could be if you have stovepipes and you do not share with 
anybody else.
    So I started looking at what my needs are. I need people 
who are internationalists. I need language capability, which I 
do not have. I need cultural experience and background, which I 
do not have. I need more diversification. I started thinking 
about mixing experience with new energies and new thinking when 
we got into analysis and I said they have already invented 
this, it is called the university; why do we not apply the 
idea?
    So that is really where it is coming from, and I hope to 
share it with the DNI.
    Senator Dayton. I hope you will.
    Mr. Goss. Thank you.
    Senator Dayton. Thank you, Mr. Chairman.
    Chairman Warner. Thank you very much. I am glad you asked 
that question. I helped the Secretary of Defense with some 
encouragement over 3 years to start a scholarship program to 
train young people in cyber security. We are up to about 10 now 
getting those scholarships. But I really believe, Mr. Director 
and Admiral Jacoby, that our country has to begin to redirect 
more of its assets toward training our young people to fill the 
gaps that we desperately need, not only in the area of security 
but just math and sciences and other occupations.
    Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman.
    First of all, Admiral Jacoby and Director Goss, we have the 
utmost respect for you and I have enjoyed our long friendship 
serving together, Director Goss. There are a few statements 
that you made or some references you made in your opening 
statement about China and our Chairman Warner made a couple of 
comments. We have not really talked very much about it.
    I would like to come in the back door, Admiral Jacoby, on 
something that you said in your statement and kind of work 
around it here. First of all, recently Chavez said, ``Iran has 
every right to develop atomic energy. All over the world there 
is a clamor for equality and profound rejection of imperialist 
desires of the United States Government. Faced with the threat 
of the U.S. Government against our brother people in Iran, 
count on us for all our support.''
    Then, bringing this into later on, he made the statement, 
``We have invaded the United States, not with weapons, but with 
our oil.'' He intends to use oil to fight American influence. 
He visited China in December and signed trade pacts for oil and 
gas.
    Now, in the U.S.-China Commission's 2004 report, it states 
``One of Beijing's stated goals is to reduce what it considers 
U.S. superpower dominance in favor of a multipolar global power 
structure in which China attains superpower status on a par 
with the United States.''
    Admiral Jacoby, you said in your opening statement: 
``Beijing may also think it has an opportunity to improve 
diplomatic and economic relations, to include access to energy 
sources, with other countries distrustful or resentful to the 
United States policy.''
    I agree with you and I would like to have you expand a 
little bit on how you think this--what kind of a threat you 
think this poses and maybe bring some proliferation into it.
    Admiral Jacoby. Thank you, Senator. I could go into details 
in closed session, but in this session I'll say Iran and China 
have a relationship for the sale of military equipment and 
technologies. There is an underlying basis there for a 
partnership because China's rapidly expanding economy right now 
is still very heavily a coal-fueled economy. Obviously demand 
for petroleum access is great. Iran, isolated in some ways in 
the commercial arms market and an antiquated military, in need 
of technology--you can end up with those kinds of 
relationships.
    You end up with relationships, as you pointed out, like 
with Venezuela and China. I think those two countries 
categorize places where there may be mutual interests in the 
kinds of things that we should be expecting to see in the 
upcoming years.
    Senator Inhofe. Their demand for petroleum products is 
growing so rapidly right now. In the case of Venezuela, we are 
purchasing right now 60 percent of their production, which only 
constitutes around 12 to 13 of what we are importing. But 
nonetheless, when they state that they would cut us off in 
favor of China, it is something that is concerning.
    Admiral Jacoby. Yes, sir.
    Senator Inhofe. Director Goss, I am trying to find some 
time today to get on the floor to give my third China speech in 
the last 3 years. In that I mention that China is not looking 
only to build a blue water navy to control the sea lanes, but 
also to develop undersea mines and missile capabilities, and to 
deter the potential disruption of its energy supplies from 
potential threats, including the U.S. Navy, especially in the 
case of a conflict with Taiwan.
    The weapons China is investing in include cruise missiles; 
submarines; long-range target acquisition systems; specifically 
cutting edge satellites; and unmanned aerial vehicles, the 
advanced Su-30s and Su-35s. I have always applauded General 
John Jumper, who very courageously exposed back in 1998 that 
the Russians' Su-30s and Su-35s are better than our best strike 
vehicles in many ways.
    At that time we knew that China had bought some 240 of 
those. Now I am looking at reports saying that they have bought 
400 more. This would be the Su-35s, with delivery in 2006, 
along with everything else that they are doing.
    So it is a huge military buildup. I am sure that you know 
much more, but I am not sure whether or not it is something you 
can share in an open session. But with their stated official 
military budget growing by 12.6 percent this year to $30 
billion, that leaves out a lot of things such as new weapons 
purchases and others doubling this $30 billion.
    So it is a huge buildup, and I would just like to have you, 
Director Goss, talk a little bit about, number one, how 
accurate our information is on what China is doing in terms of 
its military budget and its buildup, and number two, then how 
you see that as a threat?
    Mr. Goss. Senator, thank you. I am not sure what you are 
using as sourcing for your speech this afternoon, but I assure 
you I will be very interested in your speech and I will read it 
very closely.
    I think you have definitely put your finger on an area 
where this committee needs to be working. It is of concern. I 
mentioned China. Again, I am not in the policy business. That 
is an area in which I am not supposed to be. But I think it is 
my job to point out that the modernization and the expenditures 
that are going on in the military as we understand it are 
something that seemingly threaten our forces and our interests, 
and that is something that policymakers should definitely be 
attuned to.
    I am very pleased for your interest in this.
    Senator Inhofe. We talk a lot about various countries that 
may not have much of a conventional buildup, but pose a threat, 
such as WMD and all that. But in the case of China, you have 
both, and it is something that has been very concerning to me.
    Thank you very much.
    Chairman Warner. Thank you very much, Senator Inhofe. As 
chairman I am considering the role of this committee in terms 
of further bringing to the attention of the public the dramatic 
changes in China's policy towards its weapons program, 
particularly in light of the very disturbing developments with 
regard to the European Union (EU) and their desire to lift this 
embargo. I and I think yourself and many others are very much 
opposed to that action in its present proposal of the EU.
    We will now turn to Senator Lieberman.
    Senator Lieberman. Thank you, Mr. Chairman.
    Director Goss, Admiral Jacoby, thank you for your 
testimony, and for your service. Director Goss, you described 
the employees of the CIA as an organization of dedicated, 
patriotic people. I agree. That is true of those who work with 
you and Admiral Jacoby and I thank and salute them.
    I want to talk to both of you first about Iraq. We have a 
lot to feel good about in Iraq. Saddam Hussein is gone. The 
Iraqis, in the face of terrorist threats, came out 8 million 
plus to vote. A government was stood up yesterday. But there 
remains this terrorist insurgent enemy there, killers who are 
willing to strike at vulnerable undefended targets. They are 
going to go on. Hopefully, they will diminish as the Iraqi 
Government stands up and takes charge of its destiny.
    But they are a committed, vicious enemy. Here is my 
concern, and I must say that I found the exchange you had with 
Senator Levin in this regard disappointing this morning. I 
worry that we do not know as much as we should today about this 
enemy. We are not even sure, from the testimony today, about 
how many there are. I understand it is not like counting troops 
on an open battlefield. This is at the heart of the evil of the 
enemy that we are facing today.
    I worry also, because adequate intelligence is so critical 
when you are facing an enemy like this. Clearly if somebody is 
willing to drive into a bunch of Iraqi citizens who are signing 
up to become security officers and he blows himself up as well 
as them, the best way to stop it is to know he is coming, 
through intelligence.
    So I present that challenge to you, if you will. Over 
time--and Senator Levin has focused on this--we have heard 
varying estimates of the numbers in the insurgency. We compare 
that to the number arrested and you would think that the number 
of insurgents would go down, but it keeps going up. What are we 
doing, and what can we do to help you, to know more about the 
enemy we and the Iraqis face today and we will face in years to 
come? I do not have to tell you, this enemy has the blood of 
Americans on its hands and we ought to do everything we can to 
know where they are and stop them before they strike again.
    Please give me your response to that.
    Mr. Goss. Senator, thank you. That is a very perceptive 
analysis of the conundrum we face there.
    One of the things we have to do--and this is not 
necessarily intelligence--is we have to give the young guy who 
gets up in the morning in Iraq a better choice than he has now 
of going out and picking up his AK-47 and going and shooting 
us. That is one of the things that has to happen.
    Senator Lieberman. Right.
    Mr. Goss. That may be mental, it may be ideological, it may 
be economic. All of those factors come in.
    Senator Lieberman. My hope is that as the Iraqi Government 
stands up it will give more of those young people that path to 
a better future than becoming killers.
    Mr. Goss. Well, as Admiral Jacoby said, you have to have 
the economic opportunity, you have to have a judiciary system, 
and you have to have a stabilizing force. All of those things 
are part of the fabric of society. I think that our 
intelligence mission will get easier as that part of the 
infrastructure and those institutions of society come into 
play.
    But right now, if you ask me how many insurgents, I do not 
like to answer that question because a person may make a 
decision between going to a job if one is available or going 
out and being involved in some kind of mischief.
    Senator Lieberman. You mean on a given day?
    Mr. Goss. On a given day. We are not talking about what I 
would call a nice organized network that we can go penetrate. 
This is a lot of individual inspiration or two or three guys 
getting together. Now, some of it is obviously stroked. This 
guy Zarquawi is pretty good at that. But we are not talking 
about anything that is conventional in our way of thinking.
    Senator Lieberman. Do we not also believe or have reason to 
believe that elements of the former Saddam Hussein regime fell 
back and are coordinating these attacks against us?
    Mr. Goss. Some, yes, sir.
    Senator Lieberman. Perhaps with funding from outside, 
places like Syria?
    Mr. Goss. Yes, that is a factor. That is definitely a 
factor. It is not the only factor. It may not be the major 
factor. There are many, many factors. This is complicated, as 
you have pointed out.
    You asked me if our information is adequate. No, it will 
never be fully adequate. But the more we have the better we do. 
We seem to have success in a number of ways. There are two or 
three threads that have worked out spectacularly for us in 
dealing with terrorists in the act of terrorism or who are 
about to be in the act of terrorism. We are getting good at 
that, and I will speak to that in closed session for you.
    But I will tell you, generally speaking, it is the question 
of all the ways you can think a terrorist can disrupt a free 
democratic open society. In some cases they are being incited 
there more than in other places. In some ways it is good 
because we are concentrating our target in a way. It is true 
that there are others who are coming from foreign countries. 
There are known intelligence routes of where they are coming 
from, and people who are supplying them, supporting them, and 
getting the logistics to make this happen. We understand a 
great deal about that.
    But if those people were not going to Iraq, would they 
still be back in country X plotting and planning against the 
embassy or so forth? The answer is apparently yes.
    Senator Lieberman. Thank you.
    Let me ask Admiral Jacoby to answer the general question 
and, if you can, let us know to what extent we are now being 
able to bring to bear our considerable technological 
intelligence capacity and human intelligence? In some ways, 
these terrorists seem like, gangs on the street, who are 
willing to kill anybody.
    I know from the cities of America that the best tool the 
police have to stop that kind of activity is infiltrating the 
gang and, frankly, buying intelligence from people who are on 
the street, or information to go after the killers. Are we 
improving our capacity to do that against the terrorist enemy?
    Admiral Jacoby. Senator Lieberman, first let me join the 
DCI in the fact that your question reflects the complexity of 
the situation. The key to working the problem is really about 
tactical level HUMINT. It is about being able to work with the 
population and having the population get to a tipping point 
where they willingly come forward to either a coalition 
authority or, more likely, to an Iraqi authority. As Iraqi 
authorities stand up and security forces and police are in 
neighborhoods, Iraqis will be more willing to come forward and 
say, I am choosing to turn this person in and take the 
potential risk to my family that could transpire, rather than 
allowing this to happen in my neighborhood and standing by.
    There has been a lot of intimidation and standing by type 
of circumstances. When what we call tactical HUMINT sources, in 
which a person walks in and willingly shares information or may 
share it for a small payment, if that is the motivation, when 
we get to that situation that is the way to take on an 
insurgency more successfully than we have been able to do 
today.
    So the situation does have all of the characteristics that 
you are talking about. It has former regime elements who are 
organized to some level and are potentially orchestrating 
efforts to some level. It has the characteristics of 
disgruntled individuals. It has foreign fighters who have come 
in who are probably not going to be dissuaded by anything other 
than either a change in circumstance or having the population 
turn against them. Then there are criminal elements and people 
who sell their time on a daily or hourly wage to put various 
devices in place.
    The complexity is there and the local Iraqis who will not 
put up with this any longer become the key element in changing 
the face of the insurgency.
    Senator Lieberman. I thank you. My time is up. I just want 
to conclude by saying that I personally cannot think of 
anything more important to our long-term success in Iraq and, 
more important than that, the long-term success of a self-
governing Iraq, than our intelligence about the enemy. Right 
now this is a relatively small group of people that is 
attempting to disrupt the clear will of a majority of 26 
million people in order to have a better future.
    I thank you.
    Chairman Warner. Thank you, Senator Lieberman.
    Admiral, I am glad you touched on that. Citizen 
participation is so important to the intelligence collection. 
In my opening comments with Director Goss I mentioned that and 
asked, if there is any perceptible level of increase in that 
cooperation and if that is not a challenge for this new 
government to meet.
    Admiral Jacoby. I cannot pin down perceptible change in 
participation. But very clearly, in polling and the sense of 
our people on the ground, the Iraqi population is much more 
hopeful about their future, and much more concerned about the 
stability element than they were prior to the elections. So, 
Senator Lieberman, I am hopefully optimistic that the kinds of 
trends that you and I are talking about are beginning to show 
and hopefully these polling kinds of flavors will turn into 
action on the part of the Iraqis.
    Then obviously, Mr. Chairman, the goal of many of these 
efforts is very specifically to defeat stability and progress, 
and so it is a very focused effort. Stability and progress is 
also the way to defeat the insurgency.
    Chairman Warner. Do you wish to add something, Director 
Goss?
    Mr. Goss. Yes, sir. It is so critically important, and I do 
believe it is the reason that the terrorists understand this 
well. They understand this tipping point that you and Senator 
Lieberman have brought up, which we are talking about here, of 
capturing the hearts and minds, if you will.
    That is why the focus of the terrorist attacks is not as 
strenuous against the U.S. forces as it is against the innocent 
and the people trying to stand up the intelligence and security 
organizations in Iraq today. They understand that and they are 
using the tool of intimidation. We are trying to get stability 
and use that as our card against intimidation. It is going to 
be a horse race.
    Chairman Warner. Thank you. I hope that new government 
enters into this horse race and shows some strong leadership.
    The distinguished chairman of the Senate Intelligence 
Committee, the Senator from Kansas.
    Senator Roberts. I thank the chairman. I apologize to the 
chair and to the committee. I have a cold that would even 
challenge the worries of Howard Hughes. I will do the best that 
I can.
    Let me say that, in response to Senator Dayton's and the 
chairman's question that we do have a program called the Pat 
Roberts Intelligence Scholars Program (PRISP). We have funded 
150 people within the Agency to continue their education along 
the lines of the criteria that the Director has indicated. It 
is authorized and, a miracle, it has also been appropriated and 
is in the budget. I hope we can expand that.
    Mr. Chairman, I would like to quote under the banner of 
terrorist interrogation somebody by the name of Bob Steele, who 
wrote a book, ``On Intelligence.'' He said: ``Terrorism may be 
defined as a nongovernmental, nonconventional, dynamic, random, 
nonlinear, with no constraints or predictable doctrine, almost 
impossible to predict in advance.'' Yet we are trying very hard 
and are succeeding in regards to terrorist interrogation to 
save lives and to stop attacks on the homeland.
    Ralph Peters in his book ``Fighting for the Future: Will 
America Triumph?,'' said: ``A terrorist is not the trained, 
disciplined soldier we have most frequently encountered. He is 
a morally savage, unruly killer.''
    This is not, in our efforts to try to protect our troops 
and the lives of Iraqis to protect against an attack on our 
homeland. This is not your normal breed of military adversary. 
Nevertheless, in hearing after hearing in the Intelligence 
Committee we learn and it is clear our most potent intelligence 
tools to fight terrorism is the interrogation of captured 
terrorists. I always ask when we have hearings, what is your 
most important tool in terms of intelligence, and that is what 
comes back.
    So, Director Goss and Admiral Jacoby, your agencies and 
your officers play a most difficult yet very critical role in 
those interrogations. I want to thank you and I want you to 
thank them for us.
    Congress, in answer to some of the questions raised by 
members, some of whom are here and serve on the Intelligence 
Committee, has been fully informed of what the CIA is doing in 
terms of interrogating captured terrorists. We continue our 
ongoing briefings with staff and members as the classification 
permits and more with the chairman and the vice chairman. That 
is with our Conference of American Armies (CAA) officers and 
the Inspector General. Also, Director Goss will appear before 
the committee April 7.
    The Senate Intelligence Committee has and will insist that 
the CIA, the DOD, and the Department of Justice will continue 
to thoroughly investigate all allegations of abuse. We are now 
and will continue to review the results of those 
investigations. Any findings of criminal misconduct have been 
and will be referred to the Justice Department for prosecution. 
I have several examples. I will not go into those right now.
    I have met with the IG. The reason that he has not reported 
back as soon as many members would like, including this one, is 
that his investigations are ongoing. I met with him for over 
2\1/2\ hours and went into every abuse that has been reported 
in the press and asked him for a response, and he was most 
forthcoming. That is an ongoing effort by the IG, and we set it 
up that way in Congress. We passed the legislation in order to 
get this done.
    Mr. Chairman, I am a little worried about something called 
risk aversion. How many of us on this dais have talked about 
how Congress's actions prior to September 11 actually 
contributed to risk aversion that still burdens the 
Intelligence Community? It seems to me we have badgered our 
intelligence officers to get serious and tough--I have done 
that--and then we sacrifice them on the altar of a different 
criteria when it gets a little hot in the kitchen.
    I hope we do not really forget these lessons. Now, I am not 
for 1 minute suggesting that allegations of abuse should be 
ignored or that we should shy away from important oversight 
duties. There are many important aspects of detention and also 
interrogation that must continually be overseen, checked, and 
aggressively examined.
    But what I am saying is we should continue to examine and 
oversee these issues in the same discrete, judicious, and when 
necessary, aggressive manner that we have used up to this 
point. I do not think we should be in the business of 
prosecuting our troops and intelligence officers in the media 
in the midst of their work to save lives and to prevent another 
attack on the homeland.
    I think we have to work every day to ensure that our 
interrogators do not violate our laws and our regulations. But 
I have to tell you, I am losing a little patience with what 
appears to me to be an almost pathological obsession with 
calling into question the actions of the men and women who are 
on the front lines of the war on terrorism. They travel to the 
other side of the world in the service of their country with 
the reasonable expectation that their country supports them. At 
times they make mistakes, sometimes very serious mistakes, for 
which they must be held accountable, and also rightfully so.
    But Mr. Chairman, as we sit here in relative safety and 
comfort, I cannot help but think that some of us have lost our 
perspective. Our first and foremost duty is to support our 
troops and our intelligence officers at home and abroad. Again, 
as Ralph Peters so aptly stated, ``A terrorist is not the 
trained, disciplined soldier we have most frequently 
encountered. He is a morally savage, unruly killer.''
    I do not think we should do any harm to our ability to keep 
the most potent source of intelligence, the most important 
source of intelligence that we have to save lives and to 
protect our homeland. In doing this, it should not be a choice 
between our commitment to follow our laws and what our country 
stands for and our obligation to better protect our military 
and the Iraqi people and our national security. We can and 
should do both. I think we can.
    But in the end, I want you to know, Admiral, and also to 
the Director: I am with our troops, doing a most difficult and 
necessary job.
    I am already over time, but I am worried about risk 
aversion with all of the attention now being paid to the 
numerous investigations and prosecutions, etcetera, etcetera, 
and yet another call for an independent investigation. I do not 
know who would want to do this job over there with all of that, 
without having the fear of being dragged back into an 
investigation or something of this nature.
    Can you tell me very quickly, since I am over time, where 
are we with risk aversion in regards to the people who are 
doing a very difficult job with some very savage killers?
    Mr. Goss. Mr. Chairman, thank you. Your words are very 
welcome to me and I am sure also to the men and women of the 
Intelligence Community.
    I will assure you that every effort is made to make sure 
that whatever actions we take are proper and within bounds in 
the Intelligence Community, in any aspect of the use of any of 
the tools in our toolbox. That is very certain and we demand 
that in management, you demand it in oversight. I think we have 
good transparency and good mutual trust and confidence between 
the doers and the overseers.
    I do not think that it causes us in the short term to have 
any less enthusiasm in applying our skills in our jobs. But 
when there is perpetual uncertainty and perpetual doubt about 
whether or not there is going to be full support for the 
mission, it would be hard to argue that it is not going to 
impact morale and it is not going to impact performance 
eventually.
    I sincerely hope that that is not the case. I know we have 
too many good men and women out there, and I think they 
understand that we try and run interference as best we can--all 
of us, the legislative, judicial, and executive branches--to 
help them get the very dangerous work done that they have to 
get done, and so that we may from time to time have to in a 
free, democratic, and open society, check if we are doing this 
the right way. I think we are doing that.
    But I do think you are right. We run a risk, if we persist 
in allegations that are unfounded because it is becoming a 
feeding frenzy on talk shows that need a subject to fill the 
air time. I think we run the risk of doing ourselves damage.
    Senator Roberts. I thank you for your statement.
    Chairman Warner. Thank you very much.
    Senator Roberts. Mr. Chairman, I have a much longer 
statement which I spared the committee. I would ask that it be 
inserted at this point.
    Chairman Warner. Without objection, it will be inserted in 
the record.
    [The prepared statement of Senator Roberts follows:]

               Prepared Statement by Senator Pat Roberts

    Thank you Mr. Chairman. As we discuss the threats to U.S. national 
security, I think we should all agree that the most clear and present 
threat is terrorism.
    In Bob Steele's recent book, ``On Intelligence,'' the chapter on 
Recasting National Security in a Changing World defines `emerging 
threats', such as terrorism as, ``nongovernmental, nonconventional, 
dynamic or random, nonlinear, with no constraints or predictable 
doctrine, almost impossible to detect in advance.''
    In Ralph Peters' book, ``Fighting for the Future,'' the chapter on 
Winning Against Warriors notes the resurgence of terrorists defined as, 
``morally savage, unruly killer, not the trained, disciplined soldier, 
will be the type of enemy most frequently encountered.''
    These quotes underline the reality that we are not fighting your 
normal breed of military adversary. Nevertheless, in hearing after 
hearing in the Intelligence Committee, it is clear that our most potent 
intelligence tool to fight terrorism is the interrogation of captured 
terrorists. Director Goss and Admiral Jacoby, your agencies and 
officers play a most difficult and critical role in those 
interrogations. Thank you and thank them for us.
    It is important to remember that information gathered from 
interrogating terrorists is saving lives and preventing attacks on the 
homeland. We must preserve this irreplaceable source of information. If 
we ignore this intelligence, many more lives will be lost and we will 
suffer more attacks, many aimed at our homeland.
    Against this sobering and harsh back-drop, some of my colleagues on 
the Intelligence Committee, some of whom also serve on this committee, 
have been calling for yet another investigation. One in which the 
Intelligence Committee explores our detention and interrogation 
operations. This would, of course, be in addition to the countless 
other reviews, inquiries, and investigations that have or are currently 
being conducted by the Department of Defense (DOD), the Central 
Intelligence Agency (CIA), and the Department of Justice (DOJ).
    How many investigations will be enough? While current 
investigations are ongoing, and where problems have been identified and 
individuals are being held accountable and prosecuted, what will yet 
another investigation accomplish?
    Congress has been fully informed of the CIA's actions concerning 
the interrogation of captured terrorists. We continue to have ongoing 
briefings with staff and members, as classification permits, with CIA 
officers. Additionally, the Inspector General (IG) and Director Goss 
are scheduled to appear before the committee on April 7.
    The vast majority of our military and intelligence personnel have 
acted honorably and appropriately. This is not to say, however, that 
there have not been serious problems. There are allegations that 
individuals have acted on their own in violation of the rules set in 
place to prevent abuses. These are serious allegations that cannot be 
ignored. But, the fact is, they are not being ignored. I am not aware 
of any such allegation of improper activity in the military or the 
Intelligence Community that is not being fully addressed and 
investigated.
    The Senate Intelligence Committee has and will continue to insist 
the CIA, the DOD, and the DOJ continue to thoroughly investigate all 
allegations of abuse. We will continue to review the results of those 
investigations. Any findings of criminal misconduct have and will be 
referred for prosecution.
    Last summer, for example, a Federal grand jury in North Carolina 
indicted a CIA contractor for assaulting an Afghan detainee in 
Afghanistan. The case was formally referred to the DOJ by the CIA. In 
fact, congress created institutions like the CIA's Office of Inspector 
General, the DOJ, and the various investigative arms of the DOD to 
conduct these very types of investigations. I think we need to allow 
them to continue to do their work.
    Congress will carefully examine and monitor the results of these 
ongoing investigations. If we find any shortcomings as a result of 
these investigations, there will, of course, be cause for us to conduct 
our own inquiry. That does not mean that Congress has been ignoring or 
will ignore these issues. As it stands right now, the system that 
Congress designed seems to be working.
    Detention and interrogation are very difficult for Congress to 
monitor, and command a large portion of our time and effort. The 
Intelligence Committee's 511 page weapons of mass destruction (WMD) 
report on the 2002 National Intelligence Estimate clearly shows that we 
do not neglect our responsibilities. It was, in fact, a seminal inquiry 
that led to intelligence reform.
    So, what would a new formal investigation really accomplish, beyond 
what we already do on a daily basis in the course of our ongoing 
oversight efforts? I believe that those in the field will join me in 
saying that another formal investigation will create risk aversion, the 
very thing we are trying to avoid.
    Do we believe that our CIA and military interrogators are bad 
people? Are they irresponsible? You could certainly be left with that 
impression if you only read the newspaper accounts of unending calls 
for new investigations.
    How many of us on this dias have attested to the fact that 
Congress' actions prior to September 11 contributed to the risk 
aversion that still burdens our Intelligence Community? We badger our 
intelligence officers to get serious and get tough, and then we 
sacrifice them on the alter of expediency when it gets a little hot in 
the kitchen. Have we forgotten those lessons?
    Let me be clear, I am not suggesting that allegations of abuse be 
ignored or that we should shy away from our important oversight duties. 
There are many important aspects of detention and interrogation that 
must be continually overseen, checked, and examined. What I am saying 
is that we should continue to examine and oversee these issues in the 
same discrete, judicious, and when necessary, aggressive manner that we 
have used up to this point. But let's not prosecute our troops and 
intelligence officers in the media in the midst of their work to save 
lives and prevent another attack on the homeland. Make no mistake, 
another formal investigation by Congress will be a very public ``vote 
of no confidence'' in our people in the field and the critical work 
they do every day. Judging from the daily reports we receive, I, for 
one, have not lost confidence in them or their work.
    Mr. Chairman, we must work every day to ensure that interrogators 
do not violate our laws and regulations. An unnecessary and redundant 
formal investigation, whose terms of reference are literally boundless, 
will only serve to further undermine the morale of the hardworking 
intelligence officers that we rely on to interrogate captured 
terrorists, and will induce risk aversion.
    Mr. Chairman, I am fast losing patience with what appears to me to 
be an almost pathological obsession with calling into question the 
actions of the men and women who are on the front lines of the war on 
terrorism. Some of these brave souls wear uniforms, but many do not. 
They say goodbye to their wives, their husbands and children and assure 
them that everything will be alright, with the quiet and courageous 
understanding that it may not be alright. They travel to the other side 
of the world in the service of their country with the reasonable 
expectation that their country supports them. At times they make 
mistakes, sometimes serious mistakes for which they must account, and 
rightfully so. But, Mr. Chairman, as we sit here in relative safety and 
comfort, I can't help but think that some of us have lost our 
perspective. We will and must do our duty as elected officials. Our 
first and foremost duty, however, is to support our troops and 
intelligence officers at home and abroad.
    I, for one, Mr. Chairman, will not use the constitutional 
authorities vested in this great institution as a blunt instrument at 
the expense of the very people we depend upon to keep us safe every 
day. As Ralph Peters so aptly stated; ``A terrorist is not the trained 
disciplined soldier we have most frequently encountered, he is a 
morally savage unruly killer.''
    In this regard, we must not do harm to our ability to keep the most 
potent source of intelligence that we have to save lives and protect 
our homeland. It should not be a choice between our commitment to 
follow our laws and what we stand for, and the primary ability we have 
to better protect our military, the Iraqi people, and our national 
security. We can and should do both. But, in the end result, I'm with 
our troops doing a most difficult but necessary job.
    I thank the chair.

    Chairman Warner. I must say, I think this committee pursues 
its responsibility with full recognition of trying to defend 
the men and women in uniform and to the extent our men and 
women work with your fine team at the Agency, in giving them 
every support we can.
    I interpreted your remarks this morning, Mr. Director, as 
conveying to the committee and the public at large in that you 
are able to perform the duties of the mission of the CIA and 
collect that intelligence and do so consistent with what this 
Nation stands for, the rule of law. Am I not correct in that?
    Mr. Goss. You are correct, sir.
    Chairman Warner. I thank you, sir.
    Senator Ben Nelson.
    Senator Ben Nelson. Thank you, Mr. Chairman.
    I might note that Senator Roberts always seems to be hoarse 
after Kansas State does not have such a spectacular basketball 
season. So I do not know if there is any correlation or not.
    Senator Roberts. Hell, that has been 15 years. [Laughter.]
    Senator Ben Nelson. Thank you very much, Director Goss and 
Admiral Jacoby. I appreciate you being here today. I want to 
associate myself with Senator Roberts' remarks about supporting 
and pushing for the high morale of our men and women in uniform 
and those who are involved in intelligence. It is critical that 
we continue to do that.
    I think we all understand that when the effort is made in 
good faith toward competence, perfection is never possible, but 
certainly a good job is what we are seeking to get, and we 
support them. It is always difficult when there is some sort of 
failure of effort and it makes it very difficult for everybody, 
but I think we can discern the difference between those 
situations, which are apparently very rare compared to the 
competence.
    Going back to Senator Lieberman's area of concern about 
terrorism, one of the things that I have not heard much about 
recently is following the money trail, recognizing that 
shutting down cash flow very often degrades and interferes with 
the capacity of the terrorists to be able to continue their 
efforts. I think as we look at the whole area of terrorism, not 
just limited to what we are facing in Iraq but overall, is 
there anything within the context of this open session that you 
might be able to tell us on the progress we are making in 
following the money trail?
    Mr. Goss. Senator, I would be excited to tell you about 
progress in that in closed session.
    Senator Ben Nelson. Okay. Then also, turning to Pakistan 
for just a minute, we have obviously viewed Pakistan as an ally 
since September 11, but with a little bit of initial unease 
because of their prior association with the Taliban. Last 
November, together with some of my colleagues, I visited 
Pakistan and at that time we heard, what turned out fortunately 
to be an erroneous news report, that the Pakistani military 
would cease their search on the border for Osama bin Laden. It 
obviously caused concern.
    This week the news reports indicate that Pakistan is 
maintaining its nuclear black market channels and are 
attempting to procure nuclear components to upgrade their 
capabilities. Yet the Pakistanis deny this. Is there anything 
that you can tell us in open session here regarding that 
potential effort or reported effort to upgrade their nuclear 
program?
    Mr. Goss. There is nothing that I can tell you in open 
session about that, sir.
    Senator Ben Nelson. Well, that is strike two for me. Let us 
see if I can go to something else.
    In your testimony, Director Goss, you mention that Iran 
continues to hold in secret important members of al Qaeda. Now, 
I think we all would be concerned if that is the case. Do we 
know whether or not that is the case? Are they assisting in 
providing any kind of sanctuary to al Qaeda members?
    Mr. Goss. Sir, the answer I can give you is intelligence in 
which I have high confidence is that they in fact have several 
high-level al Qaeda people in Iran. What condition they are in 
in Iran is a matter I would rather discuss with you in private. 
But in fact those people are in Iran.
    Senator Ben Nelson. Can you tell us anything here in open 
session about the reform movement in Iran? Obviously it appears 
from reports that the conservative group seems to be the 
stronger of the reform. Is there any likelihood that the reform 
movement can survive in that environment?
    Mr. Goss. The answer to your question is that your 
observation is correct, that the conservative elements at the 
moment would appear to be rather dominant. What that means for 
the future of reform in Iran is subject to a lot of assessment 
and I would be happy to give you the Community's views in 
closed session.
    Senator Ben Nelson. Okay. Finally, let's discuss as it 
relates to the efforts that are going on in the area of Taiwan 
and the People's Republic of China (PRC). Can you give us your 
assessment of how much more likely it is that a PRC move would 
be now since they have adopted a war-authorizing act? Or is 
that something also for a closed session?
    Mr. Goss. The Taiwan Straits issue is as delicate a 
political issue or one of the top five in the world that have 
consequences. As I found out in my previous hearing in front of 
another committee not so long ago, what I thought were 
perfectly reasonable remarks were not taken as such. So I would 
rather defer that one as well until closed session.
    Senator Ben Nelson. I thought that only happened to us. I 
am not relieved that it has happened to you, but maybe it gives 
me some comfort.
    Mr. Goss. Thank you, sir.
    Senator Ben Nelson. Thank you, Mr. Chairman.
    Chairman Warner. Thank you very much.
    Senator Cornyn.
    Senator Cornyn. Thank you, Mr. Chairman.
    My questions have to do with our southern border, down in 
Mexico, Central America, and South America. I have heard our 
Nation's policy, while we have been consumed with other more 
immediate and urgent causes in the Middle East described, as a 
policy of benign neglect towards our southern neighbors. I am 
afraid that if that is an accurate description, that that 
neglect may come back and bite us badly at some point.
    One of my concerns has to do with Chinese investment and 
military, and possible military-to-military cooperation, 
certainly with Castro's involvement, in South America, and the 
increasing belligerence of South American leaders toward the 
United States. I'm also concerned with the prohibition on our 
ability to enter into military to military cooperative 
agreements unless there is a bilateral agreement that exempts 
our servicemembers from prosecution before the International 
Criminal Court.
    I would like to ask Admiral Jacoby about that in a minute. 
But first, Director Goss, the State Department's ``Pattern of 
Global Terrorism 2003'' notes that, ``Although there continue 
to be reports in 2003 of an al Qaeda presence in the triborder 
area''--that is the area of Argentina, Brazil, and Paraguay--
``these reports remain uncorroborated by intelligence and law 
enforcement officials.''
    But it is no secret, even if that specific activity is 
uncorroborated. Given our porous southern borders, given the 
difficulty that Mexico has controlling its borders, and given 
the activity of all sorts of lawless activity, whether it is 
human smuggling, trafficking in persons, money laundering, or 
illegal drug activity, are you satisfied that we are committing 
the appropriate level of resources to protect ourselves from 
threats emanating from the south?
    Mr. Goss. In terms of information collection, Senator? Is 
that the thrust of your question?
    Senator Cornyn. Yes, let us start there. But certainly if 
we had information there was a danger, we would do something 
about it. But let us start with that, please, sir.
    Mr. Goss. No, I am not satisfied that we have sufficient 
coverage of our back yard at all. We very clearly have over the 
years--and this has been going on for some time actually--been 
stripping down and perhaps enjoying a peace dividend, as some 
would maybe characterize it. But we have phased out a lot of 
activities that we wish we had not at this point.
    We are strong in some areas. We are better in some areas. 
Narcotrafficking is an area in which we actually are pretty 
attentive to. Some of the other kinds of things that are going 
on down there which we could be better informed on that would 
help us clearly are the kinds of things I was speaking of.
    Most particularly, perhaps the main threat is exactly the 
movement of people or the trafficking of weapons or materials 
that could be of value to terrorists or others who have other 
agendas. Those are areas in which you want as much information 
as you can get all the time, and areas I think that need 
building up.
    Senator Cornyn. Well, I very much appreciate your candor, 
more than I can say, because it seems self-evident to me coming 
from Texas and spending a fair amount of time along our border 
region. Just recently I flew with the Border Patrol helicopter 
down the Rio Grande River around Laredo. We do a pretty good 
job of controlling movement across our international bridges in 
places where at least people ostensibly try to comply with 
legal requirements. But between the bridges it is wide open 
and, unfortunately, I agree with you that there is a lot of 
opportunity there for people who want to hurt us to come 
through there.
    Admiral Jacoby, let me ask you about the Chinese and other 
government investment and activity in South America, 
particularly the limitations that apply, unless someone signs 
an article 98 agreement to exempt U.S. service persons from 
prosecution before the International Criminal Court. What kind 
of hindrances and problems do you see there that perhaps we 
need to pay more attention to that would limit the ability of 
other nations to get very much involved, particularly on a 
military level, in South America?
    Admiral Jacoby. Senator, you can appreciate I do not follow 
the article 98 policy implications closely as part of my 
responsibilities. From our standpoint as Defense Intelligence, 
we have not had inhibitions in terms of the kinds of 
relationships and our activities of our defense attaches and so 
forth as a result of this. But obviously, when you get into the 
training and some of the other actions and activities, article 
98 gets to be a major player.
    Your observation about Chinese investment in the hemisphere 
is very accurate. I am thinking back to my days as Director of 
Naval Intelligence, when the Chinese companies were very active 
with the Panama Canal companies as an investment opportunity. 
Sir, that continues in the hemisphere and, frankly, continues 
globally. It would not be at all a surprise, if a booming 
domestic economy and a worldwide presence opened up those kind 
of opportunities for Chinese investment. Central America is one 
key area.
    Senator Cornyn. Given the inhibitions or perhaps 
prohibition I should say, on military to military cooperation 
that we have--and I am not suggesting I know the answer to that 
yet, but just that it is a problem we need to pay attention 
to--those investments will follow on with military involvement 
and cooperation between these South American and Central 
American governments that we are precluded from interacting 
with on that same basis.
    Certainly we know that Fidel Castro is uninhibited in his 
activities with some of the countries in South America that are 
natural resource-rich, and that China and other nations want to 
have access to for their own economic survival and vitality.
    My time is up. Thank you very much, gentlemen.
    Mr. Goss. Thank you, Senator.
    Chairman Warner. Thank you very much, Senator.
    Senator Kennedy.
    Senator Kennedy. Thank you very much, and I apologize to 
the witnesses. We have the budget over on the floor and our 
amendments come up at different times, and I regret that I 
missed the earlier parts of the testimony.
    Admiral Jacoby, Director Goss, did you tell us--and I 
apologize if you have--about the number of Iraqis that are 
being trained currently? Do we have the numbers and what the 
flow line is in terms of output from them in Iraq?
    Admiral Jacoby. Senator Kennedy, it did not come up and, 
frankly, I do not have those kinds of numbers. You would have 
to work with the Department for that.
    Senator Kennedy. All right. I know you have gone through 
this, but I would like to come back to this policy on 
rendition. I have been informed by staff that there has been 
some comments about this and a desire to get into a secure 
session for it. But I would like to ask a little bit more about 
some parts of it that I think ought to be able to be answered.
    Yesterday the President said we send detainees back to 
their country of origin with the promise that they will not be 
tortured. Last month, Mr. Goss, you said that we have an 
accountability program to make sure the promises are kept. But 
since September 11 the U.S. has flown 150 suspects to countries 
like Egypt, Saudi Arabia, Syria, and Jordan, countries that we 
know engage in the torture, and they are not always the 
detainee's country of origin. We have turned over a Canadian to 
Syria, where allegedly he was tortured for nearly a year until 
the Syrians concluded he had no ties to al Qaeda and released 
him.
    We detained an Arab German and flew him to Afghanistan, 
where he was drugged, beaten, and then released 5 months later. 
We captured an Arab citizen of Australia and flew him into 
Egypt, who says he was given intense electric shocks, hung from 
metal hooks, beaten, and almost drowned. The U.S. eventually 
released him from Guantanamo.
    If we are sending them back to the countries of origin, how 
do you explain the fact that we are sending many of these 
people to other countries?
    Mr. Goss. Senator, thank you. On the subject of 
transferring dangerous terrorists and how that all comes about, 
there are obviously a number of equities involved. We have 
liaison sources. We have other government agencies. The idea of 
moving people around, transferring people for criminal or other 
reasons by government agencies, is not new. For us in the 
intelligence business, the idea of helping out dealing with 
terrorists has been around for about 20 years, and we do have 
policies and programs on how to do it.
    We also have liaison partners who make requests of us, and 
we try to respect not only the sovereign rights of other 
countries, but all of the conventions and our own laws and of 
course the Constitution. As far as I know, we do that, and in 
cases where we do not or there is a problem, there are ways to 
bring it to the attention of people like our IG. That system 
does work.
    Senator Kennedy. Well, you mentioned other times. During 
the Clinton administration they had used rendition. They used 
it, as I understand it, for limited purposes, to return 
terrorist suspects for criminal prosecution. It required an 
interagency group's review. Do you require interagency groups 
to review, and also to approve each requested transfer? Do you 
have those kinds of safeguards? Did you maintain that process?
    Mr. Goss. Sir, I can only speak for the Intelligence 
Community.
    Senator Kennedy. That is exactly what I am asking. Those 
were in place during the previous administration. I am asking 
whether those kinds of protections still exist.
    Mr. Goss. I actually believe that since September 11 and 
since we have understood the value of how to deal with the 
terrorist threat that we have more safeguards and more 
oversight in place than we did before.
    Senator Kennedy. Well, there are many that believe that if 
we abuse prisoners in ways, we do not undermine al Qaeda; we 
strengthen them and make it easier to recruit terrorists and 
create a backlash of hatred against us.
    Moving on to the Bybee memoranda, which we went into in 
very great detail in the Judiciary Committee at the time of Mr. 
Gonzalez's hearings. I am wondering whether you can confirm 
that the CIA is no longer using the legal guidance contained in 
the August 2002 Bybee memorandum? That is the earlier 
memorandum, just to refresh your recollection. That was in 
place for 2\1/2\ years. Basically, the evidence is that it was 
initially requested by the CIA to get Mr. Gonzalez to request 
the Office of Legal Counsel (OLC) to give them a memorandum 
that would permit them a lot more latitude in terms of dealing 
with prisoners. Now that has been repealed.
    I am just trying to refresh your recollection. But I want 
to know whether you can confirm that the CIA has conformed its 
conduct as redefined in the December 2004 OLC memorandum.
    Mr. Goss. Senator, I am obviously not as informed on the 
exact memorandum as you are or as your Judiciary Committee 
would be. Let me say that I know that the CIA has done 
everything it can to find out what the rules are, to get them 
as clear as possible, and to give those instructions to the men 
and women in the Intelligence Community in the field.
    I am satisfied that is happening.
    Senator Kennedy. I asked Mr. Gonzalez specifically whether 
or not he had given the new memorandum to the CIA and he said 
it had been distributed to the Defense Department and he 
presumed, that it had been given to the CIA. Those are 
guidelines on torture and I think it is important to know.
    Mr. Goss. Excuse me, sir. I thought you were talking about 
the transfer of detainees.
    Senator Kennedy. No.
    Mr. Goss. These memos you are talking about go to the 
treatment?
    Senator Kennedy. That is right.
    Mr. Goss. Sir, there has, as we talked about earlier, been 
some discussion about what are the right policy guidelines that 
are completely understood by everybody, both military and 
civilian. I think that there is clarity on that now. I will not 
say in open session, but I can tell you absolutely, as I 
testified to the Intelligence Oversight Committee, that at this 
time there are no techniques, if I could say, that are being 
employed that are in any way against the law or would be 
considered torture or anything like it.
    Senator Kennedy. My time is up, Mr. Chairman. When you go 
back to the office, if you could look at the December 20 OLC 
memorandum which overrode the initial Bybee memorandum that was 
wide open in terms of permitting, and I think that was really 
the basis of a lot of the abuses that took place. Could you 
give us the assurances that the agency, all of its instructions 
to its field organizations and to anyone that is coming under 
its kind of control that those particular provisions outlined 
in the Legal Counsel are being respected throughout the 
Intelligence Agency.
    If you could submit that to me, I would appreciate it very 
much.
    [The information referred to follows:]

    [Deleted.]

    Mr. Goss. Yes, sir. Just to make sure I understand: you 
wish to make sure that we are adhering to the December 20, 
2004, guidelines?
    Senator Kennedy. Yes.
    Mr. Goss. Yes, sir, I will get you that.
    Senator Kennedy. I do not want to take the additional time. 
There is a dramatic difference between what was permitted for 
2\1/2\ years under the Bybee memorandum and then what was 
changed. What was changed was sent up just at the time that Mr. 
Gonzalez's nomination came up here, and Mr. Gonzalez then 
testified that those were the rules. He indicated that the 
changed rules went to the Defense Department and he presumed 
that they went to the CIA, but he did not know that for 
certain, I think it is fair to say. I would like to know.
    He indicated and later the Secretary of Defense has 
indicated that that is what is now guiding the DOD. Does the 
Agency know about it and are you complying? Can you give us the 
assurance that those are the instructions that are being used 
out in the field?
    Mr. Goss. I will do that, sir.
    Senator Kennedy. I thank you.
    I thank the chair.
    Chairman Warner. Thank you, Senator.
    Senator Sessions.
    Senator Sessions. While the Bybee memorandum was recalled 
and altered somewhat, it was fundamentally an accurate 
statement of the ultimate powers of a President to defend the 
United States. The important point is that this was an OLC 
memorandum to the President and the executive branch, at their 
request, on what the powers of the President and the executive 
branch were, including the military.
    However, the military never had a policy to execute or 
carry out all those powers. In fact, their policies were much 
more restrictive and have been more restrictive than may have 
been allowed under the broadest interpretation of the law, as I 
understand. Senator Kennedy and I have been on this in the 
Judiciary Committee for some time and we have had lawyers, 
cases, and arguments.
    I want to say that that was an advice given by the OLC of 
the U.S. Department of Justice, empowered to render such 
opinions, and they rendered an opinion. The military never 
developed or carried out a policy to my knowledge, and to any 
of the hearings that we have seen, that would have gone beyond 
the law and even carried out the full powers of that 
memorandum.
    I would also note that, I know, Admiral Jacoby and Director 
Goss, how frustrating and difficult your task is. I think about 
those people that we have been called on to release them: They 
have to be released, we cannot hold these unlawful combatants 
in Guantanamo. They are not prisoners of war (POWs). They have 
less protections than prisoners of war. They are unlawful 
combatants who sneak into a country with the idea of killing 
people surreptitiously, of not wearing uniforms, of not openly 
being a part of a nation state, as POWs are.
    So we have to release them. We released a bunch of them and 
now we see that the newspapers are reporting at least 12 have 
been re-arrested in the theater attacking Coalition Forces. It 
is not an easy task. Nothing you do is going to make people 
happy. If you release them improperly to some foreign country 
and they release them and they kill somebody, they will blame 
you for letting them go. If you hold them, they will continue 
to blame you for that.
    The traditional rule of warfare is that a person that is 
captured during the course of war is held until the war is 
over. That is the way we do.
    Let me ask both of you this. From my experience as United 
States Attorney, working with a host of different Federal 
agencies, I came to realize just how hard it is to achieve 
cooperation, partnership, and unity. We passed the Intelligence 
Reform Act last December. The President has signed it. We will 
soon be having confirmation hearings for Ambassador Negroponte, 
who will be the new DNI.
    How is this expected to affect your agencies and your 
relationships with one another? Have you made changes and taken 
actions now in preparation for that that can help make this a 
success? I am not sure it was a brilliant plan, if you want to 
know my opinion. But we have done it, and it could work and 
could be successful.
    Have you any thoughts? If you need any further legislation 
to make this thing work better, I hope you will let Congress 
know. Director Goss?
    Mr. Goss. Thank you very much, Senator. I appreciate your 
observations on the Judicial Committee's proceedings.
    I am prepared, Senator Kennedy, to tell you that we have 
seen the December 4 OLC memo and fully comply with its 
guidance, I am so informed. If you have further guidance on 
that matter, we always welcome it. We want to be sure we are 
doing the right things.
    On the question of the DNI, this is legislation that we are 
doing our best to implement. That is our job and we will do our 
best to implement it. It is up to you to determine if there 
will be further changes, but if we have suggestions we will 
certainly be forthcoming.
    As the DCI, I have started the process of how I would turn 
over the responsibilities that would be community-wide to the 
DNI. That process is in effect right now. We have begun 
already. We have of course set up a National Counterterrorism 
Center (NCTC), which is also provided for. The steps are 
underway.
    I have tried to reserve for the DNI all of the decisions 
that would be appropriately the prerogatives of the DNI. So we 
are treading water a little bit in a few places, but we have 
the foundation stones in place for a DNI to come in, to make 
the decisions, and to launch rather rapidly in my view.
    Frankly, I think it is going to work out fine, because we 
are dealing with people who have worked together for a long 
time, and who are trying to do the best they can for our 
country, and for our men and women in uniform overseas who are 
clearly in harm's way, as well as our men and women in the 
Intelligence Community, who are also taking huge risks.
    I do not think there is any question about that. There will 
be some question about how we straighten out some of the 
working relationships. That is an inevitability. I think that 
is what we are expected to do in our jobs and we will do it.
    Senator Sessions. Admiral Jacoby.
    Admiral Jacoby. Senator, we are looking forward, obviously, 
to the confirmation and moving ahead. In the mean time, we are 
not treading water either. We have put considerable amount of 
time and attention through last fall and into this year in 
strengthening the defense capabilities and the integration 
within Defense Intelligence so that when we are a part of this 
national community we are bringing the best possible 
capabilities we can to the DNI for his employment.
    Obviously, we are active in the transition team planning 
that Director Goss has put in place. We also have not slowed 
down or wavered from our course to strengthen our relationships 
with other Intelligence Community partners, most specifically 
the CIA in the analysis and HUMINT area and very specifically 
our involvement and long-term engagement within the NCTC.
    So I think I can assure you that we are not sitting and 
waiting. We are preparing and ready to move out.
    Senator Sessions. I am glad to hear that. I know that as a 
direct result of President Bush's very strong leadership, every 
agency reached a new level of sharing of information and 
cooperation, and a lot of it was done on a personal basis. 
People met at the proper levels and started sharing information 
to an incredible degree.
    We need to be sure that this new reorganization does not 
upset that. It could even be a setback without everybody's 
determined effort to make sure we do not, in our formalization 
of these procedures, drift back into the bureaucratic mind set 
rather than the personal immediate sharing of relevant and 
important information.
    I know that you will work toward that. I would just want to 
say, Director Goss, that I respect your agents so much. I know 
the CIA has been blamed for this and that, and we want to see 
some changes but I salute you and support you in making changes 
that you feel are necessary to really empower that agency to 
reach its fullest potential. Having been around the world and 
visited with CIA agents in dangerous countries that they work 
in 7 days a week, 12 hours a day, nobody knows their name, I 
know that they could be targets of a terrorist at any time. 
Their families cannot join them in these countries. They are 
serving as much as any soldier in the field and we need to 
remember and value their contribution to this Republic.
    Mr. Goss. Thank you for recognizing that, Senator.
    Chairman Warner. Thank you, Senator.
    Senator Bill Nelson.
    Senator Bill Nelson. Thank you, Mr. Chairman.
    Good morning. I would like both of your comments on 
Venezuela, Bolivia, and the Venezuelan-Colombian border, as 
well as the Revolutionary Armed Forces of Colombia.
    Mr. Goss. They are emerging troublesome areas and demand 
close coverage, probably some policy formation, and perhaps 
some execution before we understand the real intent motives for 
some of the activities that are going on. We clearly are 
talking about some political activities. We are talking about 
some illegal activities with narcotraffickers. We are talking 
illegal arms smuggling and a bunch of other things.
    We are talking about meddling in sovereign affairs of 
different countries by state actors. There is quite a bit on 
the plate to cover and a lot of decisions to be made policy-
wise about what steps to take, and we should be ready to help 
take those steps when we are required to.
    Senator Bill Nelson. Chairman Lugar of the Foreign 
Relations Committee is doing an investigation right now with 
regard to the implications of the cutoff of oil from Venezuela 
were that has become the case. I think we would have some 
warning, because there are not any refineries other than ours 
right now that can refine that grade of crude. We would have 
some.
    We need to be mindful of that. We also need to be mindful 
of an opportunity, despite Chavez's rhetoric, in which we can 
start bringing them together. Now, my sense is he thinks the 
CIA was behind the coup that tried to take him out, and thus he 
does not have much dealings with the CIA at all. But there is 
government-to-government contact with regard to our FBI and 
there are still military-to-military contacts there. I think we 
ought to continue to encourage, if not with him, moderation 
within that society as much as we can.
    Admiral, do you have anything more to report to us on the 
search for Scott Speicher?
    Admiral Jacoby. Senator, let me just sort of recap. We 
have, as we have talked previously, no information to suggest 
that Captain Speicher was ever held by the former Iraqi 
Government. We continue our search for information by having it 
be a high-end requirement for any detainees. We are positioned 
and prepared to put our team back on the ground in Iraq if any 
new leads develop. But right now there are really no active 
leads.
    We are in the process of preparing a report for the 
Secretary of the Navy of the work that was done on the ground, 
so that we pull all of that together and put the source 
reporting together all in one document for his consideration.
    Senator Bill Nelson. I was under the impression that that 
report was supposed to be ready months ago. What is holding it 
up?
    Admiral Jacoby. Sir, it came to me. I did not find it to be 
as complete as I felt it needed to be, recognizing that it is 
an interim report in the sense that the search for information 
continues, and I remanded it back to the drafters and the team 
that had been on the ground in Iraq to fill in some areas that 
I thought were not definitive enough in the finding.
    Senator Bill Nelson. Well, one thing that I want to thank 
you about is that when Pat Roberts and I started agitating on 
this about a couple of years ago, you all formed that special 
Speicher unit, which was formed before we went into Iraq. We 
are grateful for that, and we are grateful for the dedication 
of the people that were on that particular unit because they 
worked very hard.
    Admiral Jacoby. They did, sir, and I will relay that to 
them.
    Senator Bill Nelson. We first thought they were going to 
find him, and then we thought we might be able to find the 
evidence so that the family could have closure.
    Admiral Jacoby. Yes, sir.
    Senator Bill Nelson. Thank you for that. But I wish you 
would speed up that report. We are kind of getting tired of 
waiting for it.
    Admiral Jacoby. It is about to be finalized, sir.
    Senator Bill Nelson. Mr. Director, in your testimony 
regarding Haiti you stated that the outlook is very cloudy for 
legitimate timely elections in November 2005, even with 
substantial intelligence support. What in the world are we 
going to do if there are no timely elections? What impact is 
that going to have on the internal security situation?
    Mr. Goss. Senator, I think it is the internal security 
situation that is actually impacting the capacity to have the 
elections at this point. I am hoping that we will, through the 
efforts that are being made there, and are now I think being 
led perhaps by the Brazilians--I may have that wrong----
    Senator Bill Nelson. They are part of it.
    Mr. Goss. Good leadership. They are trying to work their 
way through the countryside to create stability. When we see 
the opportunity for an electoral council to get up again and 
there to be what I will call a more normal process, I will be 
more encouraged and it will not be such a cloudy forecast.
    But right now we just are not at that level of stability or 
opportunity in Haiti, regrettably. I wish it were not so, but 
it is.
    Senator Bill Nelson. Does that suggest that one possibility 
is that we do not have a substantial enough international 
security force to stabilize the country?
    Mr. Goss. In my estimate, they could beef up the 
intelligence security force a little bit and it probably would 
have a benign effect, that is correct. But I still think that 
there are some matters among Haitians which are going to need 
to be settled, and I think that that has historically been a 
difficult proposition.
    One hopes to keep providing the opportunity for them to 
work it out. We have done that a number of times and so far we 
have not had the success we had hoped.
    Senator Bill Nelson. Well, thank you both for your public 
service.
    Mr. Goss. Thank you, Senator.
    Chairman Warner. Thank you, Senator Nelson.
    I would like to inform members of the committee, and many 
of them are participating in the debate on the floor, that it 
is the intention of the chair and the ranking member to 
reconvene in Hart 219 at approximately 12:10 to continue the 
closed session. So we will now have the participation and the 
question period by our colleague Senator Clinton, and then we 
may have a housekeeping or another matter you wish to bring up.
    Senator Levin. A couple questions.
    Chairman Warner. All right, thank you.
    Senator Clinton.
    Senator Clinton. Thank you, Mr. Chairman.
    Welcome, Director Goss and Admiral Jacoby. I thank you both 
for your service and for being here to respond to our 
questions. The Department of Homeland Security (DHS) has been 
trying to focus the antiterrorism spending that it has 
jurisdiction over in a more strategic, risk-based manner. 
Through their analysis, they have identified a number of 
possible attacks that it views as most plausible or 
devastating, including the detonation of a nuclear device in a 
major city, the release of sarin nerve agent in office 
buildings, and a truck bombing of a sports arena.
    I would like to ask you both, what role if any did the CIA 
and the DIA have in working with the DHS in generating this 
analysis and list?
    Mr. Goss. Senator, I do not believe that CIA had much role 
in that at all. The breakdown in DHS between domestic and 
foreign is very critical because Americans do not spy on 
Americans and we keep our foreign intelligence program 
overseas. However, we do provide information. That is the place 
where we come together. So the degree of information that might 
have gone into some estimates on that, it is very possible and 
probably likely that some CIA sources, some of our channels, 
were used in making estimates about the likelihood of a chem-
bio attack or so forth.
    But as to sitting down and assessing directly where the 
risks are in the homeland, that would be a little bit out of 
our lane.
    Senator Clinton. Admiral?
    Admiral Jacoby. Senator, the same. Clearly, discussions 
about the potential threats goes on in a community forum, but 
we would not have participated in homeland security's internal 
prioritization and ordering of the threats.
    Senator Clinton. At several hearings by this committee I 
have asked about the level of coordination between the DOD, the 
Intelligence Community, and the DHS because I am concerned that 
we may not have the appropriate level of information-sharing 
and coordination.
    For example, I was struck by the comments in the newspapers 
today about the anthrax scare in the DOD facility and the 
either failure to or inability to better coordinate with the 
public health response mechanism and the like. I appreciate 
greatly the wall between the different and appropriate roles 
that each of you have, between domestic and intelligence, but I 
am not yet persuaded that we have as sufficient a coordination 
as we need.
    Now, I know that the DNI and how that is stood up will 
perhaps play some role. But I think it would be useful to again 
think more closely. If you look at the list that DHS has put 
forth--nuclear detonation, sarin nerve agent, truck bombing--it 
is almost impossible to imagine that there is not quite a bit 
of overlap in trying to make those assessments between what we 
know, and what the information is we are gathering abroad.
    Obviously, much of this list is based on DHS's assessment 
of the intelligence that it is receiving and how it is 
evaluating it. I am hoping that we can continue to improve the 
flow of information and coordination, and I would look forward 
to hearing any ideas you might have on that.
    Second, I read this week that General Musharraf said the 
Pakistani army might have come close to capturing Osama bin 
Laden near the Afghan border in late spring or early summer of 
last year. Could each of you enlighten us on the status of the 
hunt for bin Laden?
    Mr. Goss. Senator, thank you. For the first part of the 
question, I totally agree that the level of coordination is a 
constant job. We always have to be working at that. It is not 
just cooperation; it is moving the information, it is needing 
to share it with those who need to know it. That takes some 
doing. We are dealing with horizontal integration as well as 
vertical, down to the State, local, and the municipal.
    Some of this is new for some people, and it is actually 
happening. It is perhaps not happening as fast as we would 
like, but it is happening and it will continue to happen, 
because the thrust is all that way.
    I think that I would agree with your surmise that the 
information-sharing is not sufficient yet, but the trend lines 
are good and the momentum and the push we are giving it is 
right. I think we are heading in the right direction.
    As for talking about some of the information, we do have a 
problem. Candidly, sometimes we pick things up somewhere around 
the world in the many ways we do it. We are not really sure 
whether it is real. Even if it is a wonderful source, we are 
not sure whether it is wishful thinking or coffee house chat or 
something else.
    So what is a real plot? When somebody says trucking 
industry or big building or something somewhere, is that a real 
plot or is it wishful thinking? Those kinds of fine filters are 
a new kind of analysis for us. We are doing better at it, but 
there is still room for improvement.
    In terms of the hunt for bin Laden, I would like to reserve 
some of that for the closed session. I could simply say it goes 
on. It is very informed, and I would agree that there have been 
times when we have been closer than not.
    Senator Clinton. Admiral?
    Admiral Jacoby. I join the DCI and would like to follow up 
in closed also, please.
    Senator Clinton. Director Goss, in the last 10 days or so 
former Senator Sam Nunn gave a very thorough and somewhat 
disheartening speech about the status of nonproliferation 
efforts at the National Press Club. The thrust seemed to be 
that we are losing ground with opportunities to dismantle and 
prevent the potential misuse of nuclear material and weaponry, 
particularly out of the former Soviet Union.
    Have you had a chance to read Senator Nunn's speech?
    Mr. Goss. I have not.
    Senator Clinton. Have you, Admiral Jacoby?
    Admiral Jacoby. I have not, no, ma'am.
    Senator Clinton. Well, obviously I have a very high regard 
for Senator Nunn for his experience in this area. Perhaps if I 
could, Mr. Chairman, I would appreciate getting some response 
with respect to the specific points Senator Nunn made from both 
of our witnesses at some future point.
    [The information referred to follows:]

    [Deleted.]

    Chairman Warner. Yes, I think that is very much an issue 
before this committee, and if each of you would provide for the 
record at your convenience a response to Senator Clinton's 
questions.
    Senator Clinton. Thank you.
    Chairman Warner. I thank the Senator from New York.
    Now, Senator Levin, you had one or two further items?
    Senator Levin. Just a couple questions.
    Chairman Warner. Then we will proceed to the closed 
session.
    Senator Levin. This is a housekeeping issue.
    I want to get back into the question of torture and abuse, 
because there has been some suggestions here which I think have 
to be clarified by our witnesses. First of all, I think 
everybody agrees that interrogation does, if properly held, 
produce useful intelligence at times. But we have also been 
told that torture, abusive interrogation, does not produce 
reliable intelligence. Would you agree with that, Director?
    Mr. Goss. I would agree that torture is not proper 
interrogation and it does not give you the results that 
professional interrogation would bring you.
    Senator Levin. In other words, it does not give us credible 
or reliable intelligence if it is tortured out of somebody?
    Mr. Goss. I cannot say in every circumstance. I just simply 
say that professional interrogators will tell you that torture 
is not the best way to get good interrogation properly done. I 
cannot say in every instance that somebody who is tortured 
gives you good or bad information.
    Senator Levin. But there are a lot of reasons that we do 
not engage in torture. Number one, it is opposed to our laws 
and our values, right?
    Mr. Goss. It is opposed to our laws and our values.
    Senator Levin. As a general matter it does not produce 
reliable intelligence, would that be accurate, as a general 
matter?
    Mr. Goss. I would guess so.
    Senator Levin. It also jeopardizes our men and women, does 
it not, who are wearing our uniform, who might be captured some 
day? Admiral, would you agree with that?
    Admiral Jacoby. I would, yes, sir.
    Senator Levin. I think we have to be very careful with some 
of the suggestions that are made here. We all want 
interrogation of people who are captured. We want the 
intelligence which we can get from them and we want it to be 
reliable. But we also want to protect the men and women who are 
representing this Nation and that is not advanced if we engage 
in torture or abusive practices. We have been told that over 
and over again by our military, and by the CIA, and it seems to 
me we need you to clearly reaffirm that for us here this 
morning.
    Mr. Goss. I reaffirm that.
    Senator Levin. All right.
    Mr. Goss. It is too important a tool to lose. Therefore it 
must be done professionally and we must have careful oversight.
    Senator Levin. Director, the Church report said that 
approximately 30 ghost detainees who were unregistered were 
held at DOD facilities in Iraq and that was at the request of 
the CIA. That is what the Church report tells us. Would you 
agree with that?
    Mr. Goss. If we are going to talk about the findings of the 
methods of how the Intelligence Community works, sir, could we 
do that in the next session? I would be happy to answer it.
    Senator Levin. Well, except that he told us that in an 
unclassified session, and that is in his unclassified report, 
that approximately 30 ghost detainees were held unregistered at 
DOD facilities in Iraq at the request of the CIA.
    Mr. Goss. I have no doubt that that is his report, that is 
his finding.
    Senator Levin. If he can say that publicly, why can you 
not?
    Mr. Goss. Sir, I do not know about the details of the 
report and how he came to that conclusion or not. The question 
here was registering. Your question is some numbers were 
apparently not registered. I do not know what the time lines 
for registering are. I do not know what the definition of 
``ghost detainees'' are.
    Senator Levin. You have also made reference, Director, to 
the IG of the CIA having briefed the Intelligence Committee, 
and I think the chairman clarified that, that it was not the 
Intelligence Committee. He said, accurately I believe, that it 
was the chair and vice chair of the Intelligence Committee that 
he talked to.
    However, that is not my question. My question is, have you 
checked with the IG at the CIA on the status of his 
investigation? Do you keep yourself informed on that?
    Mr. Goss. Yes.
    Senator Levin. So you know the status of the investigation?
    Mr. Goss. I know generally the status. I do not know each 
and every detail, and I do not get an update every day. I do 
ask him how he is proceeding. I ask him if he has problems. I 
know about the workload that he has on it. I know that he has 
referred some cases. He tells me when he refers a case to the 
Department of Justice. He keeps me informed actually more than 
I ask him.
    Senator Levin. Well, I would hope he would give you some 
idea as to when we are going to get a report, number one. This 
is a huge missing piece. There is a lot of missing pieces in 
terms of detainees and the handling of detainees. There has 
been no responsibility which has been in any way directed at 
the people whose policies were in conflict. There has been no 
assessment of that responsibility. We have nothing in terms of 
the Intelligence Community's role in these practices.
    We cannot get it. We get the FBI memos. These now are 
declassified. They are out there on the Web. They have been 
released as a response to a request for information under the 
Freedom of Information Act. We know that we are told that at 
this Guantanamo interrogations that there are representatives 
of unnamed agencies. We presume they are from the CIA, but we 
cannot find out, and have had no assessment in terms of the 
Intelligence Community's role in improper detainee 
interrogations. It is essential that that piece be filled in, 
Director, and that we have some idea as to when that report is 
going to be forthcoming.
    Mr. Goss. Senator, I would agree with you that it is 
essential that that piece not only be filled in, but be filled 
in regularly and timely. I think the difference of our 
understandings is that my understanding is that the oversight 
is being done by the Intelligence Committee, at least under the 
system that has been carved out by your rules, not by ours, and 
how they would like to have that done.
    Senator Levin. But my question relates to your oversight, 
your IG's report, and the importance of getting that report 
completed. I would hope that you would have some idea as the 
head of the agency as to when your IG is going to complete that 
report.
    Mr. Goss. Sir, I can assure you that in one case he has 
completed action on one and a prosecution has taken place, in 
the case in North Carolina.
    Senator Levin. I am talking about the role generally of the 
agency and the rules that were followed or not followed by the 
agency. That is what we are talking about.
    Mr. Goss. That was a report that was asked by my 
predecessor and it is a report that has a number of 
recommendations, that I have referred to in my testimony. I 
have certainly shared with the Intelligence Committee. I 
believe that certainly the chairman and ranking member, and 
some of the staff have been briefed in on the aspects of the 
transfer, the detention, the interrogation, and the techniques. 
As far as I know, there has been no question that has been 
asked that has not been answered to the committee.
    Senator Levin. Is that a report that you are willing to 
share with this committee, since the Intelligence Community and 
the defense community overlap in terms of interrogation? Will 
you share that report with this committee?
    Mr. Goss. I would be very happy to share the materials that 
come from the Community with the oversight, with the overseers 
that have been designated for those matters.
    Senator Levin. I think that means no.
    Mr. Goss. Well, sir, we are being as cooperative as we can 
to do that by the rules we are given to work with.
    Chairman Warner. Let me at some point just make a comment. 
Are you through?
    Senator Levin. No, I have another question.
    You said this morning, Mr. Director, there are no 
techniques being used by the Intelligence Community now that 
are against the law. Now, the Bybee memo and the rules that 
were provided in that memo were in effect for about 2 years. 
Are you able to tell us today that there were no techniques 
being used by the Intelligence Community that were against the 
law during that period of time up to the end of 2004?
    Mr. Goss. I am not able to tell you that. I am able to 
discuss some of the matters in closed session.
    Senator Levin. My last request is a housekeeping request. 
You very forcefully this morning assured us that you are going 
to provide information to the oversight committees, that you 
want to cooperate with Congress, and I cannot tell you how 
welcome that assurance is. There is, however, a host of 
information and questions which have been outstanding for about 
a year, information which has been due from the CIA to this 
committee for about a year.
    There are four questions for the record from a year ago 
which have not been forthcoming and have not been answered. Two 
are from Senator Dole, one from Senator Akaka, and one from me. 
There have been document requests: April 9, 2004, April 29, 
2004, and June 29, 2004.
    We have been assured that the material and the answers 
would be forthcoming over and over and over and over again. 
This is a year now. This is before you were the Director, so I 
am not going to hold you responsible obviously for those 
failures and those broken promises for documents. But I would 
ask you, sir, if you would take this list from me this morning 
that sets out all the questions which have not been answered to 
this committee and all the documents which have been promised, 
and if you would promptly address yourself to responding to 
those questions and providing those documents.
    Mr. Goss. Senator, first of all let me apologize to you for 
the lack of response to the committee and to the people 
involved in that. I do not know the circumstances. You have my 
assurance I will receive that and we will turn to it 
immediately.
    Senator Levin. Thank you.
    Chairman Warner. Thank you, Senator Levin. Excuse me for 
using the word ``housekeeping.'' When we talked earlier I 
thought it was with regard to documents.
    Senator Levin. I think I misstated that, too.
    Chairman Warner. Your question line prior thereto was very 
important.
    Let me address the issues procedurally of the work being 
done by the Senate Intelligence Committee, of which I am now an 
ex-officio member and in a previous Congress I was a member and 
ranking member. There are times when under the rules of 
procedures of that committee the agency briefs only the 
chairman and ranking member. In consultation with Senator 
Roberts, I am satisfied that that process is going forward and 
will continue to go forward in a satisfactory manner on the 
issues, many of them raised by Senator Levin, with regard to 
this prisoner issue.
    There is some overlap with the jurisdiction of this 
committee and Senator Roberts and I have no difficulty ever 
trying to resolve the sphere and scope of the activities of our 
respective committees.
    Senator Sessions. Mr. Chairman.
    Chairman Warner. Yes.
    Senator Sessions. We have been through these issues in 
Judiciary Committee. In my view the Bybee memo states the 
ultimate powers of the presidency to defend America. The parts 
of it that were most controversial were withdrawn. I am not at 
all certain that if the Bybee memo were followed by CIA they 
violated any international laws.
    Number two, the Red Cross under the Geneva Conventions has 
the ability to identify prisoners, but these prisoners do not 
qualify under the Geneva Conventions because they are unlawful 
combatants. They are terrorists. They do not wear a uniform. 
They do not represent a state. They are out to kill anybody. 
They do not qualify. But the President has said we will treat 
them humanely in any case.
    Matters have been raised that suggest that our soldiers and 
our intelligence officers have carried out torture when the 
U.S. Congress has defined torture, and torture by this Congress 
was defined. Senator Kennedy and others voted for the statute 
and it says ``substantial pain and psychological distress.''
    So the idea that somebody can be treated better who 
cooperates and somebody who is not cooperating gets less well 
treatment is not torture. I think a lot of the actions that 
have been carried out have been within the law and should not 
be defined as torture because it is not torture under the 
statute.
    Chairman Warner. I thank my colleague.
    We have to shorten our session so that we can do a closed 
session, and then the Senate has an extensive calendar of votes 
coming up. It has been a very good hearing, Director Goss.
    Mr. Goss. Thank you, sir.
    Chairman Warner. I welcome you for your first official 
appearance before this committee. Admiral Jacoby, the same. We 
will continue now in room 219, the Intelligence Committee 
spaces.
    [Questions for the record with answers supplied follow:]

             Questions Submitted by Senator James M. Inhofe

                        CHINA'S MILITARY BUDGET

    1. Senator Inhofe. Admiral Jacoby, I understand that China's 
official military budget would grow by 12.6 percent this year to $30 
billion, in line with its past budgets. However, I also understand that 
this may not be a completely accurate disclosure, that it does not 
include the cost of new weapons purchases and research that could push 
China's actual military budget upwards of $60 billion. The U.S.-China 
Commission and the Department of Defense (DOD) assessed that the 2004 
People's Liberation Army (PLA) defense budget was grossly under-
reported and that reliance on official figures excluded much of China's 
military modernization program. The U.S.-China Commission estimated 
that China's defense budget is at least two to three times higher than 
its official statements. Even if we accept China's official figures, 
its defense budget has increased by 13 percent nearly every year since 
1997. This is far above its average 8.2 percent gross domestic product 
(GDP) growth for those years.
    Can you please comment on China's questionable defense budget 
accounting and the implications of its sustained double-digit military 
growth?
    Admiral Jacoby. [Deleted.]

                     CHINA'S ONGOING PROLIFERATION

    2. Senator Inhofe. Admiral Jacoby, China has long been a known 
proliferator of prohibited weapons and technologies to countries such 
as Iran, North Korea, and Pakistan. This proliferation occurs in spite 
of repeated nonproliferation commitments in 1992, 1994, 1998, 2000 and 
2002. The U.S.-China Commission's 2004 report states, ``China's 
assistance to weapons of mass destruction-related programs in countries 
of concern continues, despite repeated promises to end such activities 
and the repeated imposition of U.S. sanctions.'' This is more than just 
a problem. For these countries to obtain weapons of mass destruction 
(WMD) technology clearly threatens our national security in an 
immediate way. Some of the companies known for proliferation have been 
repeatedly sanctioned for more than a decade. At the very least it 
appears that the Chinese government is ineffective or worse, negligent. 
But as closely as some of these cases are linked to the government, I 
don't think we can safely assume anything. How is this proliferation 
occurring and why has it been allowed to continue?
    Admiral Jacoby. [Deleted.]

                         CHINA'S ENERGY PROBLEM

    3. Senator Inhofe. Admiral Jacoby, I am alarmed at the growing gap 
between China's exploding energy needs and its topped-out production 
level. I am even more concerned at where they are looking for new 
energy sources. As you stated in your written testimony, ``Beijing may 
also think it has an opportunity to improve diplomatic and economic 
relations, to include access to energy resources, with other countries 
distrustful or resentful of U.S. policy.'' I think we have seen this 
with Iran and Venezuela. This is a very disturbing trend. I quote the 
U.S.-China Commission's 2004 report: ``One of Beijing's stated goals is 
to reduce what it considers U.S. superpower dominance in favor of a 
multi-polar global power structure in which China attains superpower 
status on par with the United States.'' Would you comment on the 
significance of this trend?
    Admiral Jacoby. [Deleted.]

    4. Senator Inhofe. Admiral Jacoby, would it be an exaggeration to 
say that we are moving toward a zero-sum game with China?
    Admiral Jacoby. [Deleted.]


                     CHINA'S MILITARY MODERNIZATION

    5. Senator Inhofe. Admiral Jacoby, you said in your written 
testimony that China's ``acquisition priorities appear unchanged from 
my testimony last year.'' In light of this, please comment on the 
implications of China's increased amphibious assault ship production, 
its recent launch of ``Type 094'' nuclear submarines (which are the 
first capable of striking the continental U.S. with nuclear missiles 
from its home waters) and the development of the strategic JL-2 
ballistic missile. Do these developments represent a continuation or 
change in China's alarming weapons acquisition program?
    Admiral Jacoby. [Deleted.]
                                 ______
                                 
              Questions Submitted by Senator Susan Collins

        INTELLIGENCE REFORM AND TERRORISM PREVENTION ACT OF 2004

    6. Senator Collins. Admiral Jacoby, the 9/11 Commission identified 
the failure to share information as a significant problem plaguing both 
the Intelligence Community's and the executive branch's capabilities to 
counter terrorism. To remedy this problem, the intelligence legislation 
mandates the creation of an Intelligence Sharing Environment (ISE) in 
order to ensure the sharing of terrorism information across the 
executive branch. The legislation authorizes $20 million for each of 
fiscal years 2005 and 2006 so that the executive branch can implement 
this section and create the ISE. What is the status of the executive 
branch's creation of the ISE, and where is the funding for the ISE 
contained in the President's fiscal year 2006 budget request?
    Admiral Jacoby. The General Defense Intelligence Program (GDIP), 
the Director of National Intelligence's defense component of the 
National Intelligence Program, did not receive any fiscal year 2005 
funds specifically designated for an ``Intelligence Sharing 
Environment'' (ISE), nor has the GDIP programmed for ISE funds in the 
fiscal year 2006 President's budget submission. Nevertheless, both DIA 
and GDIP have been tireless advocates of policies and supporters of 
programs that share information within the Intelligence Community and 
Law Enforcement Agencies. These programs have been supported by the DCI 
with funds and billets. They include expansion of the Joint World Wide 
Intelligence Communication system and fielding of IT tools to combine 
greater access to data and with the ability to more fully exploit it to 
derive knowledge. We are accelerating implementation of the Regional 
Service Centers to meet increased requirements for global sensitive 
compartmented information (SCI) connectivity, including increased 
bandwidth requirements to the SCI portion of the Global Information 
Grid-Bandwidth Expansion initiative. This effort also includes 
modernized infrastructure and enhanced services such as intrusion 
detection and network monitoring using emerging technologies and 
capabilities. We are also in the process of content tagging all of our 
collection and all-source intelligence reports using Extensible Markup 
Language (XML). We are convinced commercial sector ``content management 
practices'' and data standards hold the key to upgrading our 
information management capability and place us closer to the 
information sharing environment and smart networks envisioned by the 9/
11 Commission's report and the spirit of the intelligence reform 
legislation act.

                               RENDITION

    7. Senator Collins. Admiral Jacoby, we seem to me to be in a catch-
22 situation vis-a-vis the CIA and DOD rendition policies, and this 
concerns me greatly. The Pentagon has asked Congress for another $41 
million in supplemental funding for construction at Guantanamo Bay, 
including $36 million for a new, more modern prison and $5 million for 
a new perimeter fence. Some press reports indicate that as many as 200 
of those now at Guantanamo will most likely remain there indefinitely.
    But freeing or returning prisoners also has its problems. There are 
legal constraints on releasing prisoners to home countries in which 
they may face abuse or even death. Transferring detainees could also 
threaten American security because they might escape from foreign 
prisons or the foreign governments might free them.
    Admiral Jacoby, what are your recommendations to establish a 
workable policy and legal framework that allow us to properly hold or 
release remaining and future prisoners?
    Admiral Jacoby. The legal and policy aspects of continued detention 
or release of personnel at Guantanamo Bay are matters appropriately 
addressed by national level policy makers. As an intelligence element, 
DIA does not formulate national policy.

    8. Senator Collins. Admiral Jacoby, do you think rendition is an 
effective and legal way to prevent terrorism?
    Admiral Jacoby. An ability to render terrorists to justice is one 
of the components of a counterterrorism strategy. Questions regarding 
legality are matters that are outside of the purview of the Defense 
Intelligence Agency.

    9. Senator Collins. Admiral Jacoby, do we know precisely how many 
detainees were ``kept off the books'' or were ``ghost detainees''?
    Admiral Jacoby. DIA has no involvement in rendition policies or 
operations. I have no knowledge of how many detainees were kept off the 
books or were ghost detainees.

    10. Senator Collins. Admiral Jacoby, what was the justification for 
this practice?
    Admiral Jacoby. I do not have knowledge of the justification for 
this practice.

    11. Senator Collins. Admiral Jacoby, was there a set policy between 
the CIA and DOD regarding the process for holding unreported detainees?
    Admiral Jacoby. I do not have knowledge of such a policy or 
process.

    12. Senator Collins. Admiral Jacoby, does this practice continue 
today?
    Admiral Jacoby. I do not know if this practice continues.
                                 ______
                                 
             Questions Submitted by Senator Saxby Chambliss

            MILITARY INTELLIGENCE REORGANIZATION ACT OF 2005

    13. Senator Chambliss. Admiral Jacoby, on March 16 Senator Ben 
Nelson and I introduced S.260, the ``Military Intelligence 
Reorganization Act of 2005.'' This legislation would create a unified, 
four-star military Intelligence Command (INTCOM), which would be 
comprised of DIA and Service components as designated by the Secretary 
of Defense. The legislation also allows for the Secretary of Defense to 
give the INTCOM commander the Department's responsibility for direction 
and oversight of the three national intelligence agencies in DOD, 
namely, the National Security Agency (NSA), the National Geospatial-
Intelligence Agency (NGA), and the National Reconnaissance Office 
(NRO). Our two main purposes in creating INTCOM are, first, to provide 
the new DNI, the Secretary of Defense, and the Chairman of the Joint 
Chiefs of Staff with one primary advisor regarding military 
intelligence, and second, to help ensure our combatant commanders 
(COCOMs) and our troops on the ground have a military intelligence 
structure that is streamlined, inclusive, easy to use, and provides 
them with the most timely and accurate intelligence available.
    As for intelligence support to our warfighters, I'm aware that 
there are a series of steps under review to remodel defense 
intelligence, known as the RDI initiatives, and that central to this is 
the establishment of Joint Intelligence Operations Centers (JIOCs) for 
the COCOMs. In your view, could INTCOM serve as the one-stop-shop for a 
COCOM's intelligence needs by providing DOD intelligence assets and 
coordinating with the DNI for non-DOD support for COCOM requirements?
    Admiral Jacoby. Success at providing one stop shopping for the 
intelligence needs of the combatant commands would depend upon the 
level and extent of authority that the Secretary of Defense would 
designate for INTCOM over specific Service intelligence components and 
the Combat Support Agencies--DIA, NGA, NSA, plus NRO.

    14. Senator Chambliss. Admiral Jacoby, could INTCOM put together a 
JIOC tailored for the specific intelligence needs of the COCOM, assign 
it to the COCOM, and then provide continuous support to the JIOC?
    Admiral Jacoby. There are a number of ways to ensure a JIOC can be 
tailored for the specific needs of a COCOM. The key to any successful 
architecture is that the deciding authority must have the ability to 
move intelligence resources across programmatic boundaries. For 
instance, if the JIOC needed true all-source intelligence capabilities 
and support, resources resident in GDIP, CCP, NGP, NRP, JMIP, and TIARA 
would be needed. Any legislation would need to provide the INTCOM 
Commander with sufficient authority to align personnel resources and 
capabilities assigned to the JIOC from these different programs.

    15. Senator Chambliss. Admiral Jacoby, is INTCOM compatible with 
the RDI initiatives?
    Admiral Jacoby. Initiatives that enhance the ability to operate 
Defense intelligence as an integrated enterprise--a system-of-systems--
are likely to be compatible with RDI.

    16. Senator Chambliss. Admiral Jacoby, turning to the DNI, we 
believe that he will have an unmanageable span of control trying to 
coordinate 15 different members of the Intelligence Community, eight of 
which are in the DOD. With INTCOM, however, the DNI could deal with a 
single point of contact for the majority of his dealings with the 
military. What impact do you think INTCOM will have on the DNI's 
ability to effectively manage the Intelligence Community?
    Admiral Jacoby. I believe Ambassador Negroponte should be the judge 
of what impact an INTCOM would have on his ability to manage the 
Intelligence Community.
                                 ______
                                 
               Questions Submitted by Senator Carl Levin

                           TERRORIST THREATS

    17. Senator Levin. Admiral Jacoby, on March 15, Admiral Keating, 
the Commander of U.S. Northern Command, told this committee that, ``We 
do not have any active intelligence of a capability of a terrorist 
group to launch a missile attack against the U.S. from a ship.'' Do you 
agree with Admiral Keating?
    Admiral Jacoby. I agree with Admiral Keating.

    18. Senator Levin. Admiral Jacoby, do you agree, as your prepared 
testimony suggests, that we are more likely to face a terrorist attack 
against the United States than a ballistic missile attack against the 
Nation?
    Admiral Jacoby. As outlined in my statement for the record, I 
believe global terrorism represents the greatest and most immediate 
threat to our Nation and interests.

          CONFIDENCE IN ESTIMATES OF IRAN'S NUCLEAR INTENTIONS

    19. Senator Levin. Admiral Jacoby, as the unanimous Senate Select 
Committee on Intelligence report demonstrates, the Intelligence 
Community was seriously wrong in its assessments of Iraq's weapons of 
mass destruction (WMD) programs. We went to war against Iraq largely on 
the argument that Iraq possessed WMD and could provide them to 
terrorists. How are you guarding against making the same kind of 
mistakes with respect to analysis of Iran's nuclear activities, which I 
believe you both admit are dual-use activities (that is, they could be 
used for nuclear power or for nuclear weapons)?
    Admiral Jacoby. [Deleted.]

          NORTH KOREA--WILLINGNESS TO GIVE UP NUCLEAR PROGRAMS

    20. Senator Levin. Admiral Jacoby, according to The Washington 
Times on March 15 a North Korean Foreign Ministry spokesman said, 
``Reality proves that our possession of nuclear weapons guarantees 
balance of power in the region and acts as a strong deterrent against 
the outbreak of war and for maintaining peace,'' and added that the 
north, ``will take necessary countermeasures, included bolstering of 
its nuclear arsenal, to cope with the extremely hostile attempt of the 
U.S. to bring down [our] system.''
    Does the Intelligence Community believe that North Korea would be 
willing, under certain circumstances, including a guarantee by the 
United States not to forcibly attempt to change North Korea's 
government, to give up its nuclear programs?
    Admiral Jacoby. As I outlined in my statement, DIA judges North 
Korea may eventually agree to negotiate away parts of its nuclear 
weapon stockpile and program and agree to some type of inspection 
regime. However, we do not currently foresee conditions under which 
North Korea under Kim Jong Il would entirely surrender its nuclear 
weapons programs and capabilities, given its previous pursuit of a 
covert program, concerns over external threats to include the United 
States, and association of such capabilities with regime survival and 
legitimacy.

    21. Senator Levin. Admiral Jacoby, if so, under what circumstances?
    Admiral Jacoby. DIA does not currently foresee conditions under 
which Kim would entirely surrender his nuclear weapons programs and 
capabilities.

                         NORTH KOREA--MISSILES

    22. Senator Levin. Admiral Jacoby, do you believe that North Korea 
has the ability to arm a missile with a nuclear device?
    Admiral Jacoby. [Deleted.]

    23. Senator Levin. Admiral Jacoby, do you believe that North Korea 
has the ability to deploy a two-stage intercontinental nuclear missile 
that could successfully hit U.S. territory?
    Admiral Jacoby. [Deleted.]

    24. Senator Levin. Admiral Jacoby, if not, how long do you believe 
it will take them to acquire this capability?
    Admiral Jacoby. [Deleted.]

    25. Senator Levin. Admiral Jacoby, how long will it take them to 
then develop a three-stage missile capable of reaching all of the 
United States?
    Admiral Jacoby. [Deleted.]

                        CHINA--MILITARY BUILDUP

    26. Senator Levin. Admiral Jacoby, by all accounts, China has 
increased its defense spending by at least 12 percent, and is 
modernizing and improving the capabilities of their Armed Forces. What 
is the Intelligence Community assessment of the intent behind China's 
buildup and modernization?
    Admiral Jacoby. [Deleted.]

    27. Senator Levin. Admiral Jacoby, are there differences within the 
Intelligence Community on this?
    Admiral Jacoby. [Deleted.]

    28. Senator Levin. Admiral Jacoby, what is the DIA's assessment?
    Admiral Jacoby. [Deleted.]

            CHINA--EUROPEAN CONTRIBUTION TO MILITARY BUILDUP

    29. Senator Levin. Admiral Jacoby, how have European countries and 
corporations been assisting in China's military modernization and 
buildup?
    Admiral Jacoby. [Deleted.]

    30. Senator Levin. Admiral Jacoby, have the Europeans been selling 
items or technology to China that is more advanced, more qualitatively 
superior in terms of its contribution to Chinese capabilities, than the 
items or technology that the United States has been selling?
    Admiral Jacoby. [Deleted.]

    31. Senator Levin. Admiral Jacoby, if the Europeans lift their 
sanctions on military sales to China do you expect a change in the 
quality and quantity of items or technology that the Chinese would have 
access to?
    Admiral Jacoby. [Deleted.]

            SECURING NUCLEAR MATERIALS AND WEAPONS IN RUSSIA

    32. Senator Levin. Admiral Jacoby, there has been a policy concern 
that any security upgrades not be made if such upgrades could possibly 
improve operational capabilities at a Russian military facility. From a 
practical perspective what difference does it make if nuclear materials 
or weapons used against the U.S. or its friends or allies are stolen 
from an operational base or a storage facility?
    Admiral Jacoby. [Deleted.]

    33. Senator Levin. Admiral Jacoby, is this still the policy and if 
it is should we rethink that policy?
    Admiral Jacoby. [Deleted.]
                                 ______
                                 
             Questions Submitted by Senator Daniel K. Akaka

                           INSURGENCY IN IRAQ

    34. Senator Akaka. Admiral Jacoby, you have testified recently that 
``the insurgency in Iraq has grown in size and complexity over the past 
year. Attacks numbered approximately 25 per day 1 year ago. Today, they 
average in the 60s.'' Improvized explosive devices (IEDs) have been the 
weapon of preference for these attacks. Could you explain where the 
terrorists are getting the weapons for these attacks?
    Admiral Jacoby. [Deleted.]

    35. Senator Akaka. Admiral Jacoby, are they still looting arms 
depots left over from the Saddam Hussein regime?
    Admiral Jacoby. [Deleted.]

    36. Senator Akaka. Admiral Jacoby, in your testimony, you 
acknowledged that key to defeating the insurgents in Iraq is developing 
tactical level human intelligence capabilities and a commensurate 
willingness by Iraqi citizens to come forward to provide information. 
You indicated that when we arrive at a situation in which Iraqis are 
coming forward either to volunteer information or to do so for a small 
payment, we will be getting somewhere. Why have these people not been 
coming forward yet?
    Admiral Jacoby. [Deleted.]

    37. Senator Akaka. Admiral Jacoby, it suggests that insurgent 
intimidation of the Iraqi people is working. Is that your assessment as 
well?
    Admiral Jacoby. [Deleted.]

                     ISRAELI ARMS DEALS WITH CHINA

    38. Senator Akaka. Admiral Jacoby, there have been press reports 
that the U.S. has expressed concern over Israeli arms deals to China 
and that the U.S. has raised these concerns directly with Israel. Would 
you provide for the record details of Israeli arms deals with China 
that remain of continuing concern to the United States?
    Admiral Jacoby. [Deleted.]

        GLOBAL THREATS ON THE U.S. DURING HIGH OPERATIONAL TEMPO

    39. Senator Akaka. Admiral Jacoby, in your testimony you mentioned 
that what kept you up at night was the variety of sophisticated global 
threats that the U.S. was facing during a period of high operational 
tempo while transforming our Armed Forces structure. Do you believe 
that these threats growing faster than our ability to gather 
intelligence and manage these challenges to our security?
    Admiral Jacoby. No.

                                  iran
    40. Senator Akaka. Admiral Jacoby, press reports indicate that the 
United States has deployed unmanned aerial vehicles over Iran to 
conduct surveillance. Could you confirm or deny that these overflights 
have taken place?
    Admiral Jacoby. Based on our coordination with U.S. CENTCOM and the 
Joint Staff, DOD is not conducting UAV operations within Iranian 
airspace.

    [Whereupon, at 12:10 p.m., the committee adjourned.]

                                 
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